THE world is experiencing a significant demographic shift characterised by a rapidly ageing population. This change is mostly the result of decreased birth rates and improvements in healthcare, which have led to an extraordinary increase in the percentage of older people in society.
The ageing population is expected to double by 2050. The proportion of the elderly has increased from 6% in 1990 to 9% in 2019, and it is predicted that this trend will continue until it reaches 16% by 2050.
Due to the rapidly ageing population, fewer people of working age engage in the economy, resulting in skills shortage and making it more challenging for businesses to fill places that are in high demand.
If these vital jobs are not filled, the economy will suffer from decreased productivity, higher labour costs, postponed corporate expansion and weakened global competitiveness. Sometimes a lack of workers can lead to wage inflation, which can start a vicious cycle of rising prices and wages.
Malaysia will be regarded as an ageing nation by 2035, with 5.6 million people, or 15% of the total population, being considered senior citizens.
According to data, the percentage of people over 65 rose from 5.6% in 2014 to 7.9% in 2022.
The demographic composition of many countries has changed as a result of the ageing population in the twenty-first century, bringing about profound social changes.
Nations going through this demographic shift face numerous problems and challenges, such as higher dependency ratios, more strain on healthcare, pension and welfare systems and a declining labour force.
Seniors in Malaysia face a variety of social and economic obstacles. Firstly, an ageing population usually means more healthcare needs, such as long-term care and age-related disease treatments, putting a strain on the infrastructure and finances of the healthcare system.
Secondly, as the population ages, fewer people are of working age, which can result in labour shortage and lower productivity.
Thirdly, the sustainability of pension schemes may be in jeopardy as a result of more retirees receiving pensions and fewer workers making contributions to pension funds. As a result, reforms to ensure financial stability may be required.
Fourthly, the economy may grow more slowly as a result of an ageing workforce and lower productivity among older workers.
Fifthly, a higher percentage of older people compared with people of working age raises dependency ratios – a situation in which fewer workers support a higher number of retirees, putting a strain on social welfare systems.
In addition, social isolation and loneliness can negatively impact older peoples’ mental health and general well-being, especially if they do not have family or social support.
Furthermore, elderly populations are more susceptible to financial exploitation, neglect and physical or psychological abuse, emphasising the need for protective measures and support services.
It is imperative to provide older adults with housing, transportation and infrastructure that is accessible to support their independence and mobility.
To maintain an equitable distribution of opportunities and resources and to avoid intergenerational conflicts, it is crucial to strike a balance between the needs of younger and older generations. All facets of society must make a thorough and ongoing effort to address these issues in Malaysia.
The implementation of various strategies, including pension system reform, private savings promotion, healthcare system strengthening, enhanced elderly care services, social inclusion promotion and development of an integrated ageing policy, can assist Malaysia in effectively managing the economic and social consequences of an ageing population while maintaining a high standard of living for its senior citizens.
The writer is a Research Fellow at the Ungku Aziz Centre for Development Studies at Universiti Malaya.
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