This article is a submission courtesy of Universiti Malaya.
The number of the oldest people in the world is rising significantly due to the rapid ageing of the population. Societies are under pressure to adjust to this demographic shift. The world is currently experiencing a substantial demographic change characterised by a rapidly ageing population. This change is primarily the result of declining birth rates and improvements in healthcare, leading to a remarkable increase in the percentage of older people in society.
By 2050, the ageing population is expected to have doubled. The proportion of elderly people increased from 6% in 1990 to 9% in 2019, and it is predicted to reach 16% by 2050. According to the United Nations, an ageing population is characterised by an increasing proportion of elderly individuals, who typically have fewer children and longer lifespans. With fewer people of working age due to the rapidly ageing population, there is a skills shortage, making it more challenging for businesses to fill positions that are in high demand.
Failure to fill these essential roles can lead to decreased productivity, higher labour costs, postponed corporate expansion, and reduced global competitiveness. Sometimes, a lack of workers can cause wage inflation, starting a cycle of rising prices and wages.
Malaysia is projected to become an ageing country by 2035, with 5.6 million people, or 15% of the total population, being considered senior citizens. Data shows that the percentage of people over 65 rose from 5.6% in 2014 to 7.9% in 2022. The demographic composition of many nations has changed due to the ageing population in the twenty-first century, bringing about profound social changes. Many countries facing this demographic shift encounter numerous problems and challenges, such as higher dependency ratios, increased strain on healthcare, pension, and welfare systems, and a declining labour force.
Seniors in Malaysia face various social and economic obstacles. Firstly, an ageing population typically requires more healthcare services, such as long-term care and treatments for age-related diseases, which strain the healthcare system’s infrastructure and finances.
Secondly, as the population ages, there are fewer people of working age relative to retirees, potentially leading to labour shortages and decreased productivity.
Thirdly, the sustainability of pension schemes may be jeopardised by more retirees receiving pensions and fewer active workers contributing to pension funds. Therefore, reforms to ensure financial stability may be necessary.
Fourthly, an ageing workforce and lower productivity among older workers may slow economic growth.
Moreover, a higher percentage of older people compared to those of working age increases dependency ratios, where fewer workers support a larger number of retirees, straining social welfare systems. Additionally, social isolation and loneliness can negatively impact the mental health and well-being of older individuals, particularly those lacking family or social support.
Furthermore, elderly populations are more susceptible to financial exploitation, neglect, and physical or psychological abuse, highlighting the need for protective measures and support services. It is crucial to provide older adults with accessible housing, transportation, and infrastructure to support their independence and mobility. To maintain a fair distribution of opportunities and resources and prevent intergenerational conflicts, balancing the needs of younger and older generations is essential. All sectors of society must make sustained efforts to address these issues in Malaysia.
Implementing various strategies, including pension system reform, promoting private savings, strengthening the healthcare system, enhancing elderly care services, promoting social inclusion, and developing an integrated ageing policy, can help Malaysia effectively manage the economic and social consequences of an ageing population while maintaining a high standard of living for its senior citizens.
