The Silent Epidemic: ASEAN’s Struggle with Developed Country Diseases
The shift from labor-intensive industries to technology-driven ones can result in job losses and regional economic disparities. Managing this transition effectively is crucial to maintaining economic stability and growth.
As the ASEAN nations continue on their path of economic advancement, they face a complex and somewhat paradoxical challenge: the threat of experiencing "developed country diseases" even before reaching the status of fully developed nations. This phenomenon, brought to light by Professor Sukegawa Seiya from Kokushikan University, demands urgent attention and the implementation of strategic reforms.
Johan Chairil
Understanding "Developed Country Diseases"
The term "developed country diseases" encompasses issues that are typically seen in mature capitalist economies. These problems include prolonged periods of low economic growth due to demographic changes, rising social welfare costs, and the phenomenon of industrial hollowing. Although there is no universally agreed-upon definition of a "developed country," Japan’s Cabinet Office identifies OECD members as such, based on economic indicators, political stability, and social maturity.
The Population Bonus and Its Decline
One significant factor in economic growth is the population bonus period, during which an increasing working-age population (typically ages 15 to 65) enhances economic potential through higher domestic savings and increased capital stock. Additionally, the decline in fertility rates, which often accompanies economic development, reduces household expenses related to raising children, thus allowing for greater savings. However, it is projected that for half of ASEAN’s member countries, the population bonus period has already ended.
Imminent Challenges
Ageing Populations: As ASEAN countries progress economically, they are confronted with the challenge of ageing populations. This demographic transition places considerable pressure on healthcare systems, pension schemes, and social security programs.
Rising Social Security Costs: Increased life expectancy and evolving family structures contribute to escalating social security expenses. Governments face the difficult task of identifying sustainable methods to fund these programs.
Industrial Hollowing: The shift from labor-intensive industries to technology-driven ones can result in job losses and regional economic disparities. Managing this transition effectively is crucial to maintaining economic stability and growth.
Necessary Strategic Reforms
To avoid the severe repercussions of "developed country diseases," ASEAN countries need to undertake several key reforms:
- Investment in Education and Skills Development: A well-educated and skilled workforce is vital for sustainable economic growth. ASEAN nations should prioritize education and vocational training to ensure their citizens acquire relevant skills that meet the demands of a modern economy.
- Promotion of Innovation and Entrepreneurship: Encouraging startups, research, and development is essential to fostering innovation. A dynamic and entrepreneurial business environment will drive economic diversification and resilience.
- Strengthening Social Safety Nets: Developing robust social safety nets is crucial to support vulnerable populations. These systems need to be adaptable to the changing demographic landscape and the evolving needs of the population.
- Regional Collaboration: ASEAN member states should actively share best practices and collaborate on addressing common challenges. Regional cooperation can significantly enhance collective resilience and the ability to implement effective solutions.
ASEAN countries are at a critical juncture where they must carefully balance their economic growth with the need to preemptively address the challenges associated with "developed country diseases." By promptly implementing strategic reforms focused on education, innovation, social security, and regional collaboration, they can mitigate these risks and continue their progress towards becoming fully developed nations. This proactive approach will enable ASEAN countries to sustain their growth trajectories and achieve comprehensive development, benefiting their populations and enhancing regional stability.