Central Government, Policy

Grey govt - Asia's public sector learns to cope with an ageing population

By Alice Kok | 10 October 2008

Asia is ageing. We look at the impact an ageing population has on government service delivery and its efforts to retain talent and knowledge as a large percentage of workers reach retirement age.

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In a few decades time, Asia Pacific will be home to most of the world’s elderly. Frankly it is a portentous demographic shift – as much of the region’s recent good fortunes have been predicated on a seemingly limitless supply of young, eager to learn workers. Yet China and Thailand are now ageing more rapidly than Britain and the United States - and come 2050 and Asia Pacific will have close to a billion people aged 60 years and above.

In Singapore, the proportion of population over the age of 50 is set to double from 23 per cent to 50 per cent over the next 25 years; China is ageing more rapidly than other developing countries; Australia is already facing a labour shortfall of 195,000; Hong Kong will have a quarter of its population aged 65 and above by 2033.

Clearly this kind of change is set to affect people’s pockets: an ageing population means more elderly to take care of, and a smaller workforce to support them. In a research report Swiss banking giant UBS used Singapore as a benchmark for ageing in the region, estimating that the impending demographic change will slice three per cent from long-term economic growth. The same report expects Japan’s long-term GDP growth to halve to one per cent, and China’s to drop from 9.8 per cent to 8.3.

“The government will have to bear the load of social welfare services, day-care centres, social support and living conditions of the elderly, governmental support from the health systems, and senior citizens awareness campaigns on our shoulders,” says Mahmood Salim Mahmood, Pakistan’s Federal Secretary of Health. “When it comes to providing e-government services to the elderly, it will remain a major challenge because of the greater incidence of poverty, illiteracy and physical disability.”

No wonder the United Nations has identified global ageing as one of the top three socio-economic issues facing the world in the 21st century. So in the absence of making more babies, what can governments do about it?

AGEING CITIZENS. However you look at it, getting old is an expensive business. If Asian countries like South Korea and Singapore were to offer the same level of social security spending for the elderly as in Australia, this would require additional expenditure equivalent to 7.6 per cent of GDP. With citizens voting with their zimmer frames, it is a safe bet that increased social spending on the elderly will shuffle slowly but insistently up the political agenda in the region’s countries.

If that is the case, ensuring that government gets the maximum bang for its grey dollars is going to be essential in order to free up maximum resources for other priority spending areas. So how can services be rendered to the elderly most cost-effectively? One way is to tap into the power of existing social networks. Rather than reinvent the wheel, spending that leverages pre-existing distribution channels may be the way to go – particularly in those countries who have yet to establish reliable social payment channels.

“We are working with the World Health Organisation to launch public awareness campaigns and other social campaigns targeting the elderly through our mosques,” reveals Mahmood. He continues by emphasising that tapping into trusted social networks not only makes financial sense for government, but it also serves to make the recipients of information, funds and educational opportunities more receptive.

A similar approach is being taken in Hong Kong where the Elderly Commission and the Labour and Welfare Bureau earlier this year established a number of ‘Elder Academies’. These elderly-focused learning centres housed in schools. Not only does this minimise the amount of capital investment required, but by keeping these centres in the heart of the community it allows for the elderly to be educated in parallel to the young.

To date, 32 such schools have been set up, offering 5000 seats to the elderly. The scheme comes with a government grant of US$7700 to each new academy as seed money; one-sixth of it meant for training elderly members of the academy’s management committee and the rest for setting up and running the place.

“The commission suggested that the new elder academies should each set up management committee and invite elders to join the committees. This will promote active ageing by giving them a chance to take part in administrative work and the planning of study programmes and activities,” explains Leong Che-hung, Chairman of the Elderly Commission. Each committee which does so gets an additional grant of US$1200, but Leong estimates that the savings to the public purse are much greater, simply by reducing wastage in the planning of each elderly academy.

Schools that are in on the programme so far includes universities like the Chinese University of Hong Kong, Hong Kong Shue Yan University, Lingnan University, City University of Hong Kong, and the Hong Kong Institute of Education. These five tertiary schools will allocate 1000 places for elders in total.

Having elderly students attend undergraduate courses and have access to the schools’ libraries and computer services will allow the elderly to “gain new knowledge and be able to share their valuable life experiences with younger students to encourage inter-generational interaction,” says Lilian Vrijmoed Dean of Student Learning at City University.

If the existing social security system were to remained unchanged, expenditure relating to the allowances for the elderly is expected to increase from the current US$1.7 billion to US$4 billion by 2033—an increase of over 130 per cent. Hence, Hong Kong plans to “enhance productivity, control expenditure and invest today in measures that will help to mitigate future pressures on public finances.”

AGEING CIVIL SERVANTS. No matter how good you look for your age, you and your colleagues are getting older too. So what should government be doing as civil servants themselves age. Elizabeth Broderick, Commissioner for Age Discrimination with Australia’s Human Rights Commission explained to FutureGov that government organisations could do more to celebrate and preserve the expertise of ageing civil servants.

To keep the grey within the workforce, Broderick is adamant that governments “should include consideration of retraining programmes for mature-aged workers apart from making workplace practices more flexible. The health and well-being of these people should be supported by the agencies they work for, and phased retirement has to be made an option.”

Job sharing, working from home, and flexible working hours seem to be the route to retaining grey gold.

A study done in 2007 by Australia government show that 54 per cent of surveyed organisations said that work/life balance strategies have contributed to reducing staff turnover rate, and 76 per cent of them believe that there has been a positive impact on productivity.

Following on from this approach, the Singapore government offers re-employment to retiring officers on a selective basis. Bernadette Sim Director of Personnel Policy in the Prime Minister’s Office says that the government is also “getting ready to offer civil servants who retire at age 62 re-employment on a much wider scale by January 2010, so long as they meet the requisite performance and medical fitness criteria.”

Other options the Singapore government is considering are flexible work arrangements, part time work and engagement on a project basis to meet varying needs at the organisational and individual level. “We are also looking at adjustment to wages and benefits to ensure cost competitiveness and sustainability over the long run,” explains Sim.

Mahmood tells that “If Pakistan decides to accommodate elderly workforce in the Ministry of Health itself, then facilities and adequate resources need to be provided at the offices, and I think this knowledge can only be retained by a trickle-down effect - younger people should learn from the experience of the ageing workers through well-designed training programmes.”

In the aspect of knowledge retention, Singapore government has made a head start. “We have sharing of best practices among public agencies for cross learning purpose,” says Sim. “And some of the ways in which the civil service leverage on the knowledge of our retired staff include re-employing them in new roles as mentors, trainers, consultants and building of knowledge management systems.”

A SILVER DIVIDEND? As the gathering grey clouds of population loom on the horizon, it is still possible to see a silver lining. By recognising the risk of losing valuable intellectual capital within the public sector as ageing civil servants retire or pop their clogs, government is ideally placed to demonstrate how the private sector can benefit from their ageing workforces. Typically ageing workers are eased out of the workforce as they become increasingly expensive because of payscales based on seniority – 50 is a typical retirement age in South Korea, for example.

But by demonstrating the value that aged civil servants still have for the public sector, government as the largest single employer in any country, is well placed to challenge traditional approaches to ageing staff.

As 20th century philosopher Abraham Herschel puts it: “A test of people is how it behaves towards the old. It is easy to love children. Even tyrants and dictators make a point of being fond of children. But the affection and care for the old, the incurable, the helpless are the true goldmines of a culture.”

Government organisations can ill afford to flunk this test.