unlicensed population ageing opportunities and challenges of population ageing for sustainable evelopment in vietnam

Population Ageing: Opportunities and Challenges
of Population Ageing for Sustainable Development
in Vietnam
NGUYEN THI THU HA
The University of Danang, University of Economics -

Abstract
Population ageing is a global issue, which is observed everywhere and affecting all nations and countries
worldwide. In Vietnam, ageing has become a typical sign in the 21st century with a rapid increasing number
and proportion of elderly people in the overall population, and is one kind of inevitable trend with both
opportunities and challenges. The key is how to seize the opportunities, meet the challenges, respond to ageing
of population, and promote sustainable development. In other words, major task of countries is not to obstruct
or put off this historical progress, but to face up to the reality of ageing of population, to actively explore
strategies and countermeasures of ageing of population that adapt to requirements of sustainable development,
to maximize the benefits of ageing of population and to minimize the influences. The main aims of this paper
is to describe the characteristics of population ageing in Vietnam, to provide a review of opportunities and
challenges of population ageing that pose to sustainable development, and then to bring forward
countermeasures from four important aspects: population policy, retirement pension system, developing
human resources of the old, and accelerating society economy development in order to respond to ageing of
population as well as to realize sustainable development in Vietnam.

Keywords: challenge; opportunity; population ageing; suggestion; sustainable development; Vietnam


1. Introduction
In recent years, population ageing has been recognized as an emerging social challenge in many
parts of the world. Some clear evidences of population ageing are observed, for example, the share
of the aged 60+ population in the world increased from 8% in 1950 to 12% in 2014, and it is predicted
to be 21% by 2050 (United Nations, 2009). The world life expectancy also increased from 47 years
in 1950 to 70 years in 2014, and a further increase to 75 years is expected by 2050 (United Nations,
2014a). However, only a few decades ago, the major concern regarding world demography was its

rapid growth and in one hand, increasing pressure on sustainable economic growth due to the
possible shrinkage of the labor force and social security systems to support the elderly, such as
pension plans, healthcare schemes and long-term care insurance (MacKellar, 2000). On the other
hand, population ageing also brings opportunities, for instance, a positive economic outlook of the
emerging “silver market”, a deep knowledge of the elder (Kohlbacher & Cornelius, 2008).
With the increase of life expectancy and the actual size of the older population defining an era of
ageing society, in which the increasing proportion of older population will continue in the coming
decades, the key emerging questions are what kinds of challenges and opportunities should we
expect? Given the expected impacts of population ageing in the coming decades, this paper aims to
describe characteristics of population ageing in Vietnam, to provide a review of opportunities and
challenges of population ageing that pose to sustainable development, and then bring forward
countermeasures from four important aspects: population policy, retirement pension system,
developing human resources of the old and accelerating social and economic development to
respond to ageing of population as well as to realize sustainable development in Vietnam.
2. The characteristics of population ageing in Vietnam
Compared with the process of ageing of population in developed countries, ageing of population
in Vietnam has its obvious characteristics as follows.
2.1. Conversion of ageing is fast and the scale of population of the elderly is huge.
The annual population survey by General Statistics Office (2011) showed that Vietnam has entered
the so-called “ageing phase” since 2011. The increasing rate of ageing population in Vietnam is very
fast and will potentially be higher than that in developed countries. More specifically, Western
countries took a hundred years to complete the demographic transition, Thailand and Japan - the
two countries having been considered as the fastest ageing in the region took 22 years and 26 years
respectively to transit from an “ageing” to an “aged” phase, while Vietnam only spent 20 years to
finish (Thanakwang & Soonthorndhada, 2007; UNFPA, 2011). In addition, according to Vietnam
General Statistics Office (2011), the proportion of the elderly at the age of 60-plus in Vietnam was
8.69 % in 2009, increases rapidly to 11.78 % in 2019 and is estimated to 26.10% in 2049 that is
much higher than the world ageing figure (21% in 2050) [10].

2.2. Ageing of population is ahead of economic development.
According to the Vietnam General Statistics Office’s annual report, GDP per capita in Vietnam
increased to 2.109 USD in 2015, but this country is also a develping country with a low average
income that is just equal to GDP per capita of Malaysia in 1988, of Thailand in 1993, of Indonesia in
2008, of Philippines in 2010 and Korea in 1982. Moreover, although GDP per capital in Vietnam
increased to 2109 USD in 2015, it is much lower than the average income level per person in the
world (10000 USD) (An Ngoc, 2015).
Vietnam now is attacked by the “silver tide” in the situation when its economy is under-developed
and its per capital GDP is extremely low, and meanwhile, its total population is swelling, so, without
doubt, quite a lot of perplexities are encountered in social and economic development of fostering of
ageing population, which poses huge challenges to sustainable development in the future.
2.3. Increased rate of seniors in the 70-79 age group and in the oldest group (80+) are
faster, but lower than that of elderly people in the lowest (60 - 69) age group.
According to Vietnam General Statistics Office (2011), the rate of elderly people at the age of 65
and above will increase remarkably from 6.43% in 2009 to 6.49% in 2019 and 19.06% of the total
population in 2049, in which, the proportion of the oldest people at the age above 80 will increase
most rapidly from 0.93% in 1999 to 1.47% in 2019 and 4.16% in 2049. In the early 21st century, the
rate of elderly people in the lowest age group (from 60 to 69) decreased from 4.51% to 4.07%, while
the proportion of seniors in the 70 - 79 age group and the oldest (80+) tend to rise more quickly
from 2.67% to 3.05% and from 0.93% to 1.47% respectively. In the period 2009 to 2049, there will
be a huge increase in the rate of all age groups in the population. More specifically, the rate of seniors
in the 70-79 age group, in the oldest group (80+) and in the 60 – 69 age group in the population rise
quickly approximate 3 times from 3.05% to 8.76%, from 1.47% to 4.16% and from 4.07% to 13.18%
respectively. Moreover, the average annual growth rate of the elderly aged from 60 to 69 is 1.03%
that is equal to the average annual growth rate of the elderly in the 70 - 79 age group, but is little
lower than the average annual growth rate of the oldest - old people (1.04%) in Vietnam in the period
2009 – 2049.
3. Co-existence of opportunities and challenges brought by ageing of population
Sustainable development means sustainable and healthy development of the whole human society
on the basis of mutual coordination and common development of population, society, economy,

resources and environment and under the guarantee of resources and with a benign environment.
Its purpose is not only to satisfy demands of contemporary population, but also not to pose threats
to development of later generations. Sustainable development is centered with human being and
regards the overall development of human being or the society as its target of development. Thus, a
good population environment is required in order to implement the strategy of sustainable
development. A good population environment will promote coordinated development and


sustainable development of population and economy, society, environment and resources (Li, 2015).
The rapidly increasing population of the elderly brings opportunities to the sustainable development
of social economy, but at the same time, it will put forward challenges to the national situation in
Vietnam.
3.1. Ageing of population brings opportunities for sustainable development.
3.1.1 Ageing population provides talent resources with high quality and low cost for sustainable
development.
Human resources of the elderly, especially talent resources, have high value and advantages.
Advantages of talent resources of the elderly are mainly reflected in two aspects. On the one hand,
they have incomparable experiences and skills and accumulated cultural tradition. In order to realize
sustainable development, a society has to inherit the excellent achievements of its traditional culture,
and carry forward and innovate these achievements. The group of the elderly is the bond and bridge
that serves as a link between the past and the future and as a connecting link between the preceding
and the following, and is an important support and guarantee of sustainable development of the
society. On the other hand, a group of healthy old people with knowledge and skills is precious wealth
of the entire society. The earlier a society is able to realize this, the more possible it is for them to
acquire advantages brought about by ageing of population.
3.1.2. Ageing population generates senior consumption market.
In the process of ageing of population, not only the ratio of consumption of the elderly to the total
consumption amount of the society is increasing, but also the particularity of demand of the elderly
causes the consumption structure of the whole society to change. The senior consumption market of
the elderly in Vietnam is one that contains huge potential and emerges with changes of the age

structure of population. Although this market has already been started, it is still at an initial stage,
and many of its fields are still blank or are under-developed. In addition, during the post period of
ageing of population, namely, the stage of ageing, demand of the society on the tertiary industry will
exhibit an obvious tendency of increase and the market about medical care and life service of the
elderly will also be greatly developed.
3.1.3. Ageing population is the shock absorber of social stability.
After ageing population suffers from frustrations and vicissitudes of life; their state of mind and
feelings become more moderate, and their way to look upon an issue and deal with an issue will
become more objective and rational. Compared with young people, they are less impulsive and are
less rebellious. Furthermore, they tend to influence and educate with their own actions the young
generation who are more impulsive and are more rebellious, so as to enable the whole society to
become more harmonious, coordinated and stable, and a harmonious, coordinated and stable society
is, without doubt, the foundation of sustainable development.



3.2. Ageing of population poses challenges to sustainable development.
Ageing of population not only brings opportunities for sustainable development, but also puts
forward new challenges to sustainable development of the society. In fact, human resource of the
elderly is also neutral, which is a kind of wealth if employed in a correct way and is a kind of burden
if employed in an incorrect way. According to Bloom et al. (2011), as numerous profound impacts of
population ageing are anticipated, the author divides the expected challenges into following ways
(Bloom et al., 2011):
3.2.1. Ageing of population will finally cause insufficient labor force and ageing of working age
and will affect improvement of labor productivity.
It is believed that physical strength of elderly labor force falls gradually into a decline, and the
elderly cannot react as fast as the young, unable to adapt to production activities with a fast rhythm.
Especially in labor-intensive production, the elderly labor force is unfavorable for improvement of
labor productivity and its influences on industries with relatively low automation level and high labor
intensity are relatively obvious. The major industry in developed countries is technology intensive

industry, and its improvement of labor productivity mainly depends on science and technology, so
unfavorable influence of working-age population ageing is relatively small. However, Vietnam
belongs to a developing country, in which most industries are labor-intensive industries with physical
strength as the major subject. As a result of differences of different labor force ages in terms of
physical strength, energy and adaptability, the supply structure of labor force and changes of quantity
are unfavorable for improvement of labor productivity to a certain extent.
3.2.2. Ageing of population affects older people in terms of physical and psychological aspects.
Another challenge of population ageing is how to ensure the fulfillment of living conditions for
older individuals. Earlier studies suggest that older people have higher health risks, for instance,
chronic diseases (Adams et al., 2012). In addition, older people are also exposed to greater risks by
being trapped in a state of social exclusion or relative poverty (Killeen, 1998).
In terms of the psychological conditions of older people, loneliness and social isolation are two
important concepts that enable better understanding of the state of older people in a society.
Loneliness is a subjective notion and describes the state of individuals experiencing the loss or
absence of an intimate or needed relationship (Killeen, 1998; Walton et al., 1991). In contrast, social
isolation is an objective notion that describes the actual degree of connectedness to other individuals
or social groups. The condition of being socially isolated is explained as “the objective state of having
minimal contact with other people” (Wenger et al., 1996). People with a higher degree of loneliness
tend to be males at the low income level or those who infrequently communicate with their children
or other family members, or those who provide home care for their spouse or relatives (Drennan et
al., 2008), while poor physical health, low morale and experiencing difficulties in communication
and mobility are considered as the causes of social isolation (Findlay, 2003).


As individuals go through different stages of life, they experience various patterns of losing social
relationships that they have built. For example, retirement is a representative occasion of losing
connections that can increase one’s vulnerability not only in financial terms, but also in social
relationships. Deaths of partners, friends, and family members are also symbolic moments that may
become a trigger for a greater degree of social isolation. Furthermore, gender appears as the second
trigger for social isolation. In fact, older women tend to be subjected to discrimination in

employment, access to daily needs, ownership of property and even participation in leisure activities.
In addition, in developing countries, older women tend to have lower educational levels and
economic independence; hence, they tend to be economically dependent on either their husbands or
relatives (Cornman, 1996).
One major challenge regarding loneliness and social isolation of older people exists in the social
perception towards older people. General perceptions of the elderly often have negative connotations,
and they set a strong assumption that “older people are inevitably dependent and a burden on
society” (Beard, 2011).
3.2.3. Increase of the total number of retired people and expenditure of retirement pension will
influence expanded reproduction.
At the national level, population ageing is often framed as an imminent issue for social welfare
systems, which are based on the balance between older population who receives services and younger
population who supports the system’s operation. Additionally, since public insurance for medical and
geriatric services is covered almost universally in developed countries and older-old persons have a
higher risk of suffering from chronic diseases and developing disabilities (Anderson & Peter, 2000),
there will be considerable pressure on welfare budgetary schemes.
In the context of developing countries, where social welfare schemes are not yet well established,
the main challenge is to respond adequately to the escalating medical and other needs of the elderly.
Moreover, the difficulty in constructing care facilities fast enough to catch up with the growing ageing
population and the relatively expensive medical costs for low and middle-income people in Vietnam,
it will be important to train geriatric care workers, to prepare a policy to cover uninsured and underinsured elderly and to build a strategy to cope with the expected increase of elderly with disabilities.
Besides, according to “Vietnam 2035 Report" by the World Bank and Vietnam Ministry of
Planning and Investment, Vietnamese spending in health is large in relation to GDP - about 6% that is higher than most of the developing countries in Asia. Expenditure of the country on retirement
pension grows too fast and its proportion in GDP increases, which is unfavorable for expanded reproduction and sustainable development of social economy (World Bank, & Ministry of Planning and
Investment of Vietnam, 2016).
3.2.4. Ageing of population is unfavorable for social stability.


As a result of decreased tolerance of physical activities and degenerated intelligence of the elderly
population, it is necessary that their ability of self-support will reduce and their independence upon

others will be aggravated, and they will become a weak group of the society. For the time being, the
social security system is still not perfect, and the economic self-support ability of the elderly is not
enough. Especially, rural elderly people almost totally depend on their children, which will increase
the economic burden of the family. Increase of the population of the elderly will bring about direct
or indirect influence upon the family economic income and the family consumption level and will
generate contradictions between generations. If the relationship between generations is not well
handled, it might affect the stability of the society. Harmony of the society is first of all, harmony of
people. Only if the elderly is harmonious and the family is harmonious, the society can be stable and
then such a society can be created in which generations are harmonious, there is no distinction of
ages, all people share everything, and the society can be sustainably developed.
4. Suggestions to respond to ageing of population and realize sustainable
development
Through analysis, it can be seen, ageing of population is a necessary trend, both with
opportunities and challenges. Our major task is not to obstruct or put off this historical progress, but
to face up to the reality of ageing of population, to actively explore strategies and countermeasures
of ageing of population that adapt to requirements of sustainable development, to maximize the
benefits of ageing of population and to minimize the influences.
4.1. The country should formulate a population policy that cannot only control growth of
population, but can also prevent excessive ageing population to realize coordinated
development of ageing of population and economy.
At present, the huge population in Vietnam has become a heavy burden of economic development.
Thus, Vietnam has to carefully carry out existing population policy and continue to control growth
of population. At the same time, under the circumstance when the total fertility rate reduces, in which
the urban fertility rate rapidly declines while the rural fertility rate increases, Vietnam should
appropriately increase the urban fertility rate to encourage the couples in urban area to give birth to
two children while using policies to reduce the rural fertility rate. This way cannot only control
growth of population through maintaining the replacement fertility rate (2 children per woman) but
also prevent too fast ageing speed and reduce the feeding coefficient of the elderly that is favorable
for coordinated development of ageing and economy.
4.2. The country should establish and make perfect the old-age security system in which the

progress of ageing of population fits with the level of economic development.
It is a primary issue to be resolved in the process of ageing to guarantee providing for the elderly.
In order to adapt to the progress of ageing of population and demand of social and economic
development, we ought to establish a multi-level old-age security system that takes into consideration


of both fairness and efficiency, has multiple channels of resources of funds, and has a combination
of social old-age support, family old-age support and community old-age help service with a
distinction between urban and rural areas. The country should accelerate reform of social
endowment insurance system and enlarge the coverage of endowment insurance, improve the
socialized degree of endowment insurance and realize overall social planning of endowment
insurance, expand resources of old-age insurance pension, set up a mechanism in which retired
people can share achievements of economic development, change the collection means of old-age
insurance pension and transfer from the model of pay-as-you-go to the model of partial
accumulation, accumulate more insurance pension as accumulated funds and make preparations for
the radical growth of retirement pension in the peak period of ageing population in the 21st Century.
This cannot only guarantee the economic life of the elderly in a short period, but can also alleviate
pressure in the future.
4.3. The country should develop and employ human resource of the elderly and transform
ageing of population as a pressure to a motive.
An important measure to face up to challenges of ageing is to develop and employ human resource
of the elderly and let more old people with labor capacity participate in social and economic
development. Firstly, this can make up for deficiency of labor force. Secondly, this can create more
wealth for the country. Thirdly, this can change part of consumption population to production
population and change the pressure of ageing of population to a motive that promotes economic and
social development. The specific measures are as follows. First, the country should gradually increase
age of retirement. Under the attack of an increase of ageing in many countries in the world,
retirement has become a new globally difficult problem. Suffered from deficit and the crisis of ageing,
a number of countries in the world are moving back the age of retirement to reduce the pressure of
deficit and lessen attack of ageing on economic development. Since 2010, it has become a unanimous

choice of many countries (especially developed countries) to extend age of retirement. For instance,
Germany has increased the age of retirement to 67 in order to cut down on release of retirement
pension and reduce pressure of the financial expenditure of the government. The age of retirement
that is being used at present in Vietnam was confirmed according to the productivity level and the
per capita life expectancy in the 90s in the 20th century. Over twenty years, the social productivity
level in Vietnam has been greatly improved and life expectancy has been extended to 70. Thus,
increase of the upper limit of the working age at an appropriate time can effectively develop and
employ labor resources and make the higher rate of working age population as well as the lower rate
of dependent population that are favorable for economic development. Second, the country should
encourage re-employment among younger elderly people. Re-employment of younger elderly people
means that the elderly people with good physical condition, working aspiration, and working ability
at the age of 60 to 69 come back to a working position after their retirement. Thus, we can conduct
continuous education and vocational training on younger elderly people, improve their scientific and
technical level and their ability to adapt to development of skills, select appropriate working positions


to continue to offer service for the society, alleviate economic pressure of the family and the society,
and maintain normal running of social life. Third, we support healthy ageing. Healthy ageing means
that most of the elderly are in good health and have a long life, which is not only reflected as extension
of longevity, but more importantly as improvement of the quality of life. This can not only promote
development of employment of talent resources of the elderly, but can also reduce expenditure of
medical care and reduce financial pressure of the nation.
4.4. The country ought to accelerate social and economic development and improve
endurance to ageing of population.
The issue of ageing is to satisfy both particular demand of the elderly and the social and economic
development brought about by ageing of population. Vietnam now is in the situation when the
economy was under-developed and has entered the stage of ageing. The objective fact that the ageing
of population is ahead of economic development needs acceleration of social and economic
development so as to strengthen endurance on ageing of population. Thus, before coming the peak
period of population ageing, Vietnam should make full use of the “golden period” of population age

structure, and vigorously develop economy to lay a material foundation to adapt to the rapid
development of ageing and for the forthcoming of ageing society. Especially, Vietnam should regard
ageing industry as an important point of increase in the economic development of the ageing society,
expand domestic demand, drive consumption, alleviate the employment pressure of the society, and
promote economic prosperity.
5. Conclusion
Ageing of population is the objective rule of human social development and is the necessary
outcome of social and economic development. The rapidly increasing population of the elderly in
Vietnam brings both opportunities and challenges to the sustainable development of social economy.
This country ought to take positive responsive measures to alleviate unfavorable influences of ageing
of population upon economic and social development and create more favorable population
environment for implementation of the strategy of sustainable development.
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