What demographic challenge does Vietnam face with its ageing population?

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Vietnam Faces Premature Ageing Before Economic Maturity

Vietnam is confronting a significant demographic challenge: its population is ageing at an exceptionally rapid pace, raising concerns that the nation may become an aged society before achieving full economic development. This trend is driven by a combination of increasing life expectancy and decreasing birth rates, positioning Vietnam among the world's fastest-ageing countries. Economists caution that these demographic shifts could precipitate labour shortages and place considerable strain on the existing social safety net.
Rapid Increase in Elderly Population

Projections indicate a substantial rise in the proportion of older citizens, with the over-60 population expected to constitute 25% of Vietnam's total populace by the mid-21st century. Concurrently, the overall population is anticipated to begin shrinking around the same period. This demographic transformation is occurring at an earlier stage of economic development compared to many other nations that have experienced similar ageing trends.
Economic Implications of Ageing

The rapid ageing of Vietnam's population is occurring while the country is still a developing economy. With a GDP per capita significantly lower than that of developed nations like Japan when they experienced comparable demographic shifts, Vietnam has a comparatively narrow timeframe to adapt to an aged society. The World Bank has highlighted this narrow window for reform, warning of potential major slowdowns in economic growth if the country is not adequately prepared.
Policy Responses and Their Limitations

In response to these demographic pressures, Vietnam has introduced new policies, including extending maternity leave to seven months for mothers having a second child and offering financial incentives such as cash bonuses and subsidised prenatal screenings. These measures aim to encourage higher birth rates and slow the ageing trend. However, the effectiveness of these incentives is being questioned, as some individuals find the benefits insufficient to offset the high costs associated with raising children, particularly in urban areas with substantial housing and childcare expenses.

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What demographic challenge does Vietnam face with its ageing population?

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