In July, a new Population Law came into force in Vietnam. Its aim is to halt the aging of the population - after the country last year abolished its long-standing two-child policy.
Fertility promotion measures
The law contains a whole series of measures designed to stimulate the birth rate - such as a bonus of at least 66 euros, which all women from certain target groups will receive upon childbirth. Working women who have given birth to a second child will now be able to take maternity leave for seven months, instead of just six, as before. At the same time, paternity leave for men whose wives have given birth to a second child is being doubled to ten days. From the beginning of 2027, there will be supplements for prenatal check-ups and newborn screening. In addition, access to social housing will be facilitated for families with two children.
However, reversing the demographic trend in Vietnam will not be easy. In 2024, the birth rate there fell to a record low of 1.9 children per woman, i.e. below the quota of 2.1 children needed to maintain the population. The UN forecasts that by 2050, the share of the working-age population between the ages of 15 and 64 will fall from 68.6 to 63 percent. At the same time, the share of people over 65 will increase from 8.4 to 21.2 percent.
The main concerns are that Vietnam is aging before it has had a chance to become prosperous. Last year, GDP reached $5,000 per capita, well below the levels achieved by Japan, South Korea and Singapore when their societies began to age at the same rate.
“When countries age before they have achieved prosperity, economic growth can slow. At the same time, income inequality increases, as does the pressure on health and social systems“, said Busaran Terawitchitchainan, a professor of sociology in Singapore. “This can have serious consequences for living standards, especially for older people with limited financial resources.“
Southeast Asia is aging at different rates
Across Southeast Asia, birth rates are falling and life expectancy is rising. In Singapore, the number of people over 60 exceeded the number under 15 as early as 2010. The same happened in Thailand in the mid-2010s. Vietnam is expected to follow suit by 2035.
The growing share of the elderly population is putting additional strain on the health system and the state, as pensions and other forms of social assistance must be financed somehow. This is particularly worrying for Vietnam, as the pension and social security systems are still not sufficiently stable, especially for the large number of people employed in the “informal sector”, i.e. people whose economic activity is not covered, regulated or controlled by the state.
However, the experience of Thailand shows that even high income levels do not eliminate these challenges. Thailand’s social system, healthcare and labour market are already adapting to a shrinking working-age population and a rapidly ageing population. The country has long relied on migrant workers from neighbouring Cambodia, Laos and Myanmar, whose working-age populations are growing or at least stable.
Singapore has also long relied on migration, but Vietnam has a very small share of foreign workers and has shown little willingness to respond to an ageing population with large-scale migration.
Can the birth rate be raised?
In Thailand and Vietnam, political debates continue to focus on the number of children born on average. Population development expert Weeraporn Pothisiri from Thailand is skeptical: "Despite efforts, the birth rate continues to decline, which means that the low birth rate is due to major structural, economic and social changes that cannot be reversed by measures to encourage birth rates," she told DW.
A number of analysts believe that governments should rethink their approach. And instead of viewing aging as just an economic problem that needs to be solved by increasing birth rates, they should focus on creating opportunities for people to live longer, healthier and more productive lives.
Potisiri believes this can be achieved by boosting birth rates while simultaneously strengthening the health, productivity and resilience of the working population. “Unlike higher birth rates, the economic impact of which will be felt in two decades at the earliest, reducing mortality will immediately strengthen demographic resilience."
However, this will require investment not only in childcare and family support, but also in preventive medicine, more flexible retirement rules and technologies that will allow older people to lead independent lives. Singapore can be a positive example in this regard. “The country combines measures to increase the birth rate with strategies for active aging, retraining of the workforce, extension of the work opportunity, health measures, as well as differentiated ways to attract specialists from abroad.“
Author: David Hut