SHAPING THE FUTURE HOW CHANGING DEMOGRAPHICS CAN POWER HUMAN DEVELOPMENT

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Pensions are important guarantees of income security and well-being for the elderly 130 BOX 4.4: Attaining universal health-care coverage for older people in the Philippines Since 2014, all citizens aged 60 and above in the Philippines have had automatic healthcare coverage through the government-owned Philippine Health Insurance Corporation (Phil- Health). It now covers over 6 million older people. The Government established PhilHealth as part of a drive for universal health care. The corporation also administers the National Health Insurance Programme, which provides basic health coverage and quality health services for all Filipinos. In recent years, it has expanded benefits to cover specific groups such as people with disabilities. As of December 2013, PhilHealth covered 76.9 million Filipinos. Contributing to the PhilHealth fund is mandatory for all Filipino workers employed by private businesses and the Government as well as those employed overseas. People aged 60 and above who are working and earning more than the poverty threshold of income also contribute, helping make universal coverage feasible. Source: Philippines Health Corporation 2014. persons. For example, Thailand has established elderly clubs in all provinces that encourage selfcare and social participation. Very few countries have tackled disabilities or HIV among older people, although the Republic of Korea has established a community-based rehabilitation system for older people with disabilities. 53 PENSION SYSTEMS STRUGGLE TO KEEP UP Pensions are important guarantees of income security and well-being for the elderly. Amid rapid population ageing in Asia-Pacific, countries need to make sure that public pension systems are designed to meet the needs of older people, and provide them with sufficient resources to live a life of dignity. Because social pensions entail public money, they invoke issues related to budget priorities, coverage, adequacy and sustainability. These in turn are framed by human rights principles inherent to human well-being, and the need to steer the economy on a steady course by protecting against fiscal deficits. Given relatively rapid development, public pension systems in Asia-Pacific tend to be fragmented and complex, not having had time to evolve into more integrated and mature systems. In one of the region’s most advanced countries, the Republic of Korea, a pension system was only created in 1988. In China, the basic oldage insurance programme for non-public sector employees was established mainly in 1997 (Box 4.5). In Indonesia, it was only in 2004 that a law was enacted to establish a comprehensive social security programme. 54 According to the World Bank classification, pensions can be put into five pillars. Pillar 0 characterizes social pension that is typically funded from the national revenue to ensure minimum income security at old age and combat poverty. These programs are non-contributory in nature and could be targeted towards some specific groups or be universal, depending upon budget availability. Pillar 1 involves mandatory publicly managed schemes including defined benefits where the amount of pension is connected to individual earnings and defined-contribution scheme where individuals also contribute to the pension. Pillar 2 characterizes privately managed mandatory savings with various investment options, while Pillar 3 consists of privately managed voluntary savings. The final Pillar constitutes of non-financial assets including home-ownership, non-cash savings, and family support. 55 Most Asia-Pacific countries have contributory pension schemes, either a defined benefit or defined contribution scheme, or a combination of the two (Table 4.2). Contributory systems cover only a small segment of the population, however, mainly public servants and employees in the formal sector. Even for employees in the latter, programmes are often broken down by type of employment, public or private, and sometimes by social status, such as whether someone is a migrant or not. Both defined benefit and defined contribution systems are inherently inequitable, in that they are available only to some people, generally those with better employment and more means. With defined contribution systems, which require employee contributions, the poor and lower cadre staff may not be able to make adequate contributions, which could deprive them of an
BOX 4.5: China moves towards universal social security for older people In recent years, China has initiated various social protection measures aimed at universal pension coverage. Before 2009, it mainly had two mechanisms for income security among older people: one for civil servants and other employees, based on employer contributions, and another for urban workers, based on social insurance principles. Together, the two schemes covered around 250 million people in 2008, about 23 percent of the population aged 15 and above. Starting in 2009, China established the New Rural Pension Scheme, and in mid-2011, it announced a national pilot Urban Residents Pension Scheme. These measures were aimed at completing a national framework for universal pension coverage. Participation is voluntary. To encourage people to join, the pensions consist of two components: a social pension paid by the Government, and an individual savings account financed jointly by individuals, collective entities such as state-owned enterprises and the Government. A minimum level set for the social pension can be higher if local governments can fund it. By the end of 2013, between the pre- and post- 2009 schemes, 850 million people, nearly 75 percent of the population aged 15 and above, was covered by a pension. To address issues of adequacy, equality and sustainability in the schemes, in 2013, China embarked on a number of major reforms. These have included merging the two newer schemes to equalize entitlements, allowing ‘portability’ so that entitlements can move between the merged schemes and others, and converting employers’ liability for civil servants into a social insurance pension scheme. The Chinese experience shows that if there is political will, extending pension coverage to all citizens within a very short period is feasible. It also demonstrates how combining contributory schemes and non-contributory social pensions may be an effective way to achieve universality. Source: ILO 2014a. adequate pension in old age. As a step towards universal public pension coverage, many countries have established some form of publicly funded social pension, varying in coverage, sufficiency and cost (Table 4.3). Social pensions are an important way to extend coverage to those without access to contributory pension systems and provide the elderly with protection against poverty. The growing importance of these programmes responds to rapid ageing, low coverage of contributory pension schemes, a large informal sector and the weakening of traditional family support systems. Coverage now exceeds that of contributory systems, which reach only around 20 percent of the elderly. Malaysia, the Philippines, the Republic of Korea, Thailand and Viet Nam all have social pension programmes, but most provide limited support, for which a means test, either by income or age, is required. In Viet Nam, only those aged 85 and over and without pensions are eligible, and the current payment level is about $7.50 per month. Nepal’s monthly social pension is just $5, and surveys of elderly persons have found complaints with paltry sums. 56 Globally, just over half of people above the legal retirement age receive pensions. 57 Coverage is as low as 22 percent in Africa and as high as over 90 percent in North America, Western Europe, and Central and Eastern Europe (Figure 4.10). 58 Where many people work in informal employment, are self-employed or are under temporary contracts, a smaller proportion of people will receive pensions. 59 Many more can rely only on family support or savings they have cobbled together. 60 Migration introduces another dimension. While young people who have moved away from rural areas to live in cities may become eligible for participation in public pension programmes, large numbers of older people left behind in the countryside are not entitled to benefits based on employment. 61 In Asia-Pacific, pension coverage, including by non-contributory pensions, hovers around the global average of about 47 percent, but falls sharply to just over 32 percent if China is exclud- Pension systems are still weak and fragmented in the region 131
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ASIA-PACIFIC HUMAN DEVELOPMENT REPO
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ASIA-PACIFIC HUMAN DEVELOPMENT REPO
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FOREWORD We live in times of great
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ACKNOWLEDGEMENTS The Asia-Pacific H
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Table of Contents Foreword iii Pref
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1.15 Population age-composition is
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Acronyms ADB Asian Development Bank
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Overview SHAPING THE FUTURE: HOW CH
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HUMAN DEVELOPMENT IN ASIA-PACIFIC:
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FIGURE 2: Wealthier countries tend
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a strong emphasis on protecting wor
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could provide job matching assistan
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Asia-Pacific leave the workforce at
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WHAT’S AHEAD IN THIS REPORT This
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Chapter 1 HOW CHANGING DEMOGRAPHICS
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sustainable, reaching everyone whil
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FIGURE 1.1: The Human Development I
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TABLE 1.1: Asia-Pacific still has l
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married couples to have children, a
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FIGURE 1.5: Population pyramids in
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FIGURE 1.8: The median age is high
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FIGURE 1.10: Disparities in fertili
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Improved overall human development
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TABLE 1.5: Countries in Asia-Pacifi
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“When relatively large generation
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38 Having fewer dependents on worki
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40 In developed Asia- Pacific, the
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TABLE 1.6: Demographic dividends fl
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44
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2. MORE PEOPLE AT WORK: THE FOUNDAT
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encouraged labour-intensive industr
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FIGURE 2.3: Peaks within subregions
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A DEMOGRAPHIC RETURN FOR HUMAN DEVE
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BOX 2.1: Women bear a larger burden
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FIGURE 2.8: Growth in labour produc
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WHAT’S BEEN LEARNED IN CHINA, JAP
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FIGURE 2.13: Japan is past its work
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FIGURE 2.15: Thailand still has tim
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make this a key aim of national dev
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investment climate, as well as enco
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TABLE 2.4: Shares of workers in the
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Even before leaving home, migrant w
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Promote health and safety at work:
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BOX 2.8: Malaysia transforms an ind
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of resilient infrastructure are joi
Page 93: Chapter 3 NURTURING CHILDREN, UNLOC
Page 96 and 97: Asia-Pacific is home to 1.7 billion
Page 98 and 99: Commendable progress in education m
Page 100 and 101: Quality primary education mitigates
Page 102 and 103: In most Asia-Pacific countries, sec
Page 104 and 105: Strong tertiary education is a buil
Page 106 and 107: FIGURE 3.3: Access to tertiary educ
Page 108 and 109: 94 TABLE 3.9: Youth illiteracy has
Page 110 and 111: TABLE 3.11: Child mortality rates b
Page 112 and 113: BOX 3.7: Malnutrition and disabilit
Page 114 and 115: Despite social and economic progres
Page 116 and 117: FIGURE 3.8: The share of youth who
Page 118 and 119: 104 Young migrants are highly vulne
Page 120 and 121: as an important challenge. But they
Page 122 and 123: TABLE 3.15: Some countries with lar
Page 124 and 125: Immunization saves children’s liv
Page 126 and 127: BOX 3.10: Germany’s vocational tr
Page 128 and 129: BOX 3.12: Partnering with youth in
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Page 133 and 134: 4. AGEING SOCIETIES: NEW OPPORTUNIT
Page 135 and 136: FIGURE 4.1: Asia-Pacific is one of
Page 137 and 138: TABLE 4.1: East Asia is the oldest
Page 139 and 140: BOX 4.2: Responses to poverty among
Page 141 and 142: BOX 4.3: A plan of action for older
Page 143: FIGURE 4.9: Per capita health-care
Page 147 and 148: TABLE 4.3: Social pensions are an i
Page 149 and 150: FIGURE 4.12: Pension replacement ra
Page 151 and 152: BOX 4.7: Increasing links between p
Page 153 and 154: cupy space in some public buildings
Page 155 and 156: ment bodies, encourage regular inte
Page 157 and 158: BOX 4.9: Ageing countries begin enc
Page 159 and 160: help coordinate the work of other g
Page 161 and 162: for older people. Many advanced cou
Page 163 and 164: action. Free public transport, and
Page 165: Chapter 5 TAPPING THE HUMAN DYNAMIS
Page 168 and 169: In the last 30 years, Asia-Pacific
Page 170 and 171: FIGURE 5.3: Even countries with few
Page 172 and 173: FIGURE 5.6: Most people will contin
Page 174 and 175: 160 Social, cultural and economic i
Page 176 and 177: The benefits of urbanization have n
Page 178 and 179: BOX 5.2: Pioneering urban poverty r
Page 180 and 181: vehicles on the road. Beijing issue
Page 182 and 183: Municipal governments in Asia-Pacif
Page 184 and 185: TABLE 5.4: Revenue mobilization opt
Page 186 and 187: 172 City governments need to have t
Page 188 and 189: Investing in essential infrastructu
Page 190 and 191: 176 in East Asian cities, and occur
Page 192 and 193: BOX 5.9: The Republic of Korea emba
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180
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6. AN AGENDA FOR ACTION: SHAPING TH
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Development Report argues, decent w
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with ministries overseeing youth, e
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This is an urgent priority in a reg
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SUSTAINING HUMAN DEVELOPMENT ACROSS
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plan automatically enrols people in
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BOX 6.3: Developing Delhi’s metro
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End Notes CHAPTER 1 1. UNFPA 2014b.
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63. WHO 2014b. 64. UNFPA 2012. 65.
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produces 40 percent of total econom
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206 The Asia Foundation. 2013. “T
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208 CODI (Community Organizations D
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210 Global Migration Group. 2014.
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212 Janwani. 2010. “Annual Report
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214 ———. 2012a. OECD Employme
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216 ———. 2011. “Follow-up t
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218 York. [www.unfpa.org/sites/defa
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———. 2012c. Malaysia Economic
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tables include the Caribbean countr
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224
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TABLE 2: Trends in the Human Develo
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TABLE 4: Gender Inequality Index 22
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TABLE 6: Trends in income poverty,
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TABLE 8: Fertility rate and crude d
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TABLE 10: Trends and share of child
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TABLE 12: Trends and share of young
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TABLE 14: Trends and share of older
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TABLE 16: Education indicators and
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TABLE 17: Health indicators 242
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TABLE 18: Employment and unemployme
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TABLE 19: International trade, fina
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ABOUT ASIA-PACIFIC HUMAN DEVELOPMEN
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SHAPING THE FUTURE HOW CHANGING DEMOGRAPHICS CAN POWER HUMAN DEVELOPMENT

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