Malaysia can expect a positive growth of the second demographic dividend beyond 2060 if the government incentivise employers to re-employ retirees aged 60 and above, said Prof Naohiro Ogawa.
Ogawa, who is Universiti Malaya (UM) Social Security Research Centre (SSRC) Old Age Financial Protection chairholder, said the re-employment initiative could possibly generate about one percent of the gross domestic product (GDP) growth for the country where the ageing population in Malaysia is expected to account for about 15 percent of the total population in 2030.
“In Japan, for example, analysis showed that the inclusion of the elderly into the workforce would boost Japan’s real GDP by approximately five percent, which is quite substantial.
“We call such an effect ‘the silver dividend’,” he told reporters on the sidelines of the recently concluded 3rd International Conference on Social Protection 2017 in Petaling Jaya.
Ogawa explained that the second demographic dividend arose when individuals at all age groups increased the demand for wealth in some form to support their consumption in old age, particularly when the lifespan is prolonged.
Meanwhile, SSRC director Prof Norma Mansor said basic universal pension should be introduced to retirees in the country to ensure adequate social protection during their retirement life.
“Asian countries, such Thailand, Japan and South Korea, had been providing basic pensions for their retirees. Thais, for instance, receive 500 Thai baht (RM63.82) every month when they reach the age of 60,” she said.
Norma said the government should emulate the move to make the social protection policy for Malaysians more inclusive.
“The challenge now is changing the mindset of people, that is, to embrace social protection not as charitable support for the poor, but rather as a form of solidarity.
“By having adequate social protection in place, a society can ensure accessibility for all, and address the issues of marginalisation, lack of opportunities, as well as income inequality because there is enough evidence that inequality affects growth,” she said.
On another note, both Norma and Ogawa stressed the importance of financial literacy, and particularly for young adults to diversify their investment plans.
Themed “Migration, Development and Social Welfare: Implications and New Insights”, the two-day conference held from Oct 10, was aimed at developing an understanding of migration and social protection both at national and international levels.