Population Aging: A Serious Challenge That Needs Policy 'Awakening' for Vietnam

Population aging is becoming a serious challenge for Vietnam, not only because of its fastest aging rate in the world, but also because of inherent limitations.

Vietnam is currently in the period of “golden population structure,” when for every dependent person there are two people of working age. Of which, the proportion of the population aged 15-64 accounts for 67.4%, the proportion of the population under 15 accounts for 23.3%, and the proportion of the population aged 65 and over accounts for 9.3%.

Vietnam also officially entered the population aging stage since 2011 and the population aging process is taking place at a rapid pace.

The number of elderly people is increasing significantly.

Associate Professor Phan Le Thu Hang - Deputy Director of the Department of Planning and Finance, Director of the Project on Investment in Construction and Development of the Grassroots Health System ( Ministry of Health ) said that demographic experts all agree that Vietnam is among the countries with the highest rate of population aging in the world. Accordingly, by 2036, Vietnam's population will enter the aging population stage. The time for Vietnam to transition from an "aging" population structure to an "old" population structure will be much shorter than that of countries with higher levels of development, such as France taking up to 115 years, Sweden taking up to 85 years, while Vietnam is expected to take only 25 years, equivalent to Japan (26 years) and Thailand (22 years).

Statistics show that in Vietnam, both driving factors of population aging (increased life expectancy and fertility rate falling below replacement level) are evident. The average life expectancy of Vietnamese people has increased rapidly, from 65.5 years in 1993 to 74.7 years in 2024, higher than many countries with the same per capita income. Along with that, the number of elderly people has also increased rapidly: in 2024, the number of elderly people aged 60 and over was 14.2 million, an increase of 2.8 million people compared to 2019 and an increase of 4.7 million people compared to 2014. It is forecasted that by 2030, the number of people aged 60 and over will be approximately 18 million people, an increase of nearly 4 million people compared to 2024.

In contrast to the trend of increasing the number of elderly people, Vietnam's fertility rate is decreasing significantly. According to the results of the 2024 Mid-Term Population and Housing Census, Vietnam's total fertility rate (TFR) is 1.91 children/woman. This is the lowest fertility rate ever observed. Experience from many countries in the world such as Europe, Japan, Korea, and China shows that when the fertility rate has decreased, it is difficult to increase again.

Associate Professor Phan Le Thu Hang - Deputy Director of the Department of Planning and Finance, Director of the Project on Investment in Construction and Development of the Grassroots Health System (Ministry of Health). (Photo: PV/Vietnam+)

Ms. Hang emphasized that population aging is becoming a serious challenge for Vietnam, not only because of the fastest aging rate in the world, but also because of internal limitations. These are the aging rate of the population and the country's financial accumulation capacity.

Vietnam has set a goal of becoming a developed, high-income country by 2045. This is considered a challenging goal, in the context of the global economy with many unpredictable fluctuations, the achievements of globalization are being reversed due to geopolitical tensions and trade wars. It is worth noting that even if this development goal is achieved, Vietnam will enter the aging population stage in 2036, nearly a decade before Vietnam becomes a high-income country. This reflects the reality that the rate of population aging is ahead of the country's financial accumulation capacity, which experts often compare to the situation of "getting old before getting rich".

Policy Awakening

Associate Professor Phan Le Thu Hang analyzed that the financial burden related to health care is expected to increase significantly in the future, not only due to the increase in the number of elderly people - the group with the highest health care needs and health care costs, but also due to other factors such as the increase in input costs (especially pharmaceuticals) as well as the operation of the health system (an unbalanced health system, relying too much on hospitals will require higher costs while not bringing higher health impacts).

“Vietnam has recognized the importance of adapting to the trend of population aging and aging population at a time when the economy is benefiting from the golden population structure. Vietnam’s recent policy adjustments (reforming the social security system, health care system, etc.) show that Vietnam is quite proactive in building a strategy to adapt to the trend of population aging and aging population. However, the ability to flexibly adjust policies as well as the ability to transform policy orientations into effective actions in practice are very important issues in the coming time,” Associate Professor Phan Le Thu Hang emphasized.

Because population aging is a process that has a complex and profound impact on all aspects of socio-economic life, the population aging trend needs to be assessed from many aspects such as demography, economics, sociology, health care, etc. The strategy to adapt to the population aging trend requires comprehensive reform packages, closely connected in many areas such as economic development, labor market reform, wage regime, savings and investment, social security system, health care system, etc.

According to Ms. Hang, to reduce the burden of population aging, it is necessary to improve the rate of personal savings and investment as well as public savings and investment, especially during the golden population period when the majority of the population is at its peak in terms of value creation. The salary system needs to be adjusted to take into account the minimum cost for individuals and households of 4 (2 workers and 2 dependents) to create conditions for individuals to have the ability to accumulate finance. At the same time, it is necessary to improve the availability and quality of long-term financial investment options for the future, including old-age insurance programs as well as other financial investment channels (such as stocks, real estate, investment funds, etc.). This means that many related issues need to be addressed, such as improving market transparency, ensuring policy stability, avoiding asset bubbles and controlling inflation, etc.

For the labor market, it is necessary to improve the efficiency of labor supply. Support labor market participants with adequate skills, health and motivation to both optimize labor potential and minimize the risk of negative social phenomena that are currently emerging in many Asian countries (the lost generation in Japan, the third generation of zero in Korea and the Tang Ping option in China). In addition, it is possible to improve the labor force participation rate through policies that facilitate and encourage older workers to participate in suitable jobs.

In addition, it is necessary to change people's awareness, attitudes and behaviors about the aging process and old age, thereby helping people have a strategy to fully prepare their finances and health for old age as well as adjust their life goals to suit each age stage.

Doctors perform ultrasound on the elderly. (Photo: Nguyen Thang/VNA)

In social security work, it is necessary to expand the social insurance system in the direction of promoting the implementation of a multi-layered, multi-pillar social insurance system to increase the comprehensive coverage of the system, contributing to improving the living standards of social insurance beneficiaries and reducing the burden on the state budget. Improve the sustainability of the Social Insurance Fund through portfolio reforms, such as targeting areas with potential profits and low risks such as the health care market.

In health care, it is necessary to develop the elderly health care industry (to provide products, services and solutions... to serve health care and support the lives of the elderly), and to strengthen international labor cooperation in some areas where Vietnam has strengths (nursing, elderly care workers, social assistance workers...).

According to Associate Professor Phan Le Thu Hang, it is necessary to adjust the health system to effectively adapt to the trend of population aging, focusing on increasing public finance for health care for the elderly; researching the model of long-term health care insurance to supplement financial resources for health care for the elderly; focusing on proactive prevention and health improvement as well as increasing the application of technological advances (especially information and telecommunications technology) to reduce health care costs and improve the impact on health and quality of life of the elderly.

In particular, it is necessary to encourage the broad participation of stakeholders, including the private sector, including the non-profit and for-profit sectors, in providing healthcare and support services for the elderly, developing human resources for healthcare for the elderly, etc./.

(Vietnam+)

Source: https://www.vietnamplus.vn/gia-hoa-dan-so-thach-thuc-nghiem-trong-can-thuc-tinh-ve-chinh-sach-voi-viet-nam-post1058715.vnp