New Report Shows Poor Countries Face Extreme Challenges From Aging

By Stefano Gennarini, J.D. | October 10, 2013

NEW YORK, October 11 (C-FAM) They were promised prosperity and security in their youth. Now, in their old age, they face ruin and bankruptcy.

Poor countries are not ready to face the global aging phenomenon, according to a new index on aging from the advocacy group HelpAge International. Despite the upbeat tone of the group, their data is alarming. Countries face a veritable demographic deficit. Their shrinking work forces are not able to sustain the elderly. They lack the resources to fund pension and health care programs necessary to deal with rapidly aging populations.

Aging is a global phenomenon. But poor countries are aging faster as a result of aggressive family planning and population control policies.

For decades UN agencies, wealthy countries and philanthropists promised poor countries a “demographic dividend” from these policies. The dividend represents the extra income families have as a result of having fewer children. Poor countries kept their end of the bargain. Worldwide expenditures on population activities that have an overall effect of reducing fertility reached $60 billion last year. Many countries are below replacement fertility, with women on average having fewer than two children. A few, mostly in Asia, have seen significant economic development. But they all face the same problem now. The world is ageing and virtually no one is ready.

HelpAge predicts that by 2050 nearly one out of every four people will be over 60 years old. Currently, only 11% of the world’s population is over 60. The index ranks 91 countries according to income security, health status, education and employment for older persons.

The preparedness of poorer countries in the face of the aging phenomenon is becoming a recurrent theme among demographers and population groups.

Demographers observe that, “developing countries will grow old before they grow rich.” That is one of the conclusions of the UN Population Division in preparation for the development agenda that will replace the Millennium Development Goals in 2015.

The challenges may be even more pronounced. A recent Deutsche Bank report by noted economist Sanjeev Sanyal predicts the world’s population will peak in 2055, and not 2100 as the UN forecasts. Aging will also happen more rapidly.

Sanyal points out that global ageing combined with better health will lead to older workforces. Developing countries with less skilled workforces will find it difficult to compete in an aging world.

Sanyal also forecasts that fertility in Africa will decline much more rapidly than the UN population division says because of urbanization, aggravating the challenges of aging in the least developed region of the world and the only region where fertility is still high. The $11 billion from wealthy countries to Africa for population activities every year may also be responsible..

Aging is becoming one of the most dynamic policy areas globally as developing countries seek guidance on how to deal with the phenomenon. Some countries and activists have proposed a UN treaty on aging to tackle the problem. But few countries are willing to take on obligations that require more government spending.

Collapsing pension systems already plague wealthy countries with low fertility and slow economies. Even the United States will be unable to sustain social security spending within a few decades.