Keynote speech at PAP Women’s Wing Conference 2014
Harnessing the Power of Seniors and Women
－Sharing Our Experiences－
Excellencies, ladies and gentlemen,
It is my great honor to speak at this prestigious political meeting today. As I was Upper House member until last July, this atmosphere is very familiar. It is also nice to be in this warm weather. I read that it snowed heavily in Tokyo.
Singapore and Japan share many things in common: we are two high-income countries, two highly industrialized countries, and above all, we share common values, such as democracy and the rule of law.
Our two countries are very close. Former Minister Mentor Lee Kuan Yew gave Japan a great deal of good advice, and I benefited from the advice of Former Foreign Minister Jayakumar, who was my Singaporean colleague when I was Foreign Minister of Japan about 10 years ago. I have high respect for Jaya—in fact, he was he was, and continues to be greatly respected by his ASEAN and other Asian colleagues.
Economically, Singapore is the first country with which Japan concluded a bilateral free trade agreement which we call an EPA, or “Economic Partnership Agreement.” So you can see the political and economic importance we place on Singapore.
We share common problems as well. One case in point is that we both face a rapidly aging society.
The Japanese people are happy that we will be hosting the Olympic Games in 2020 and one of the pet conversations among seniors these days is, “Let us live long enough to see the Olympic Games together.” When Japan hosted the Olympic Games in 1964, only one person out of 16 was above 65. Can you guess what that figure will be in 2020 when we host the Olympic Games in Tokyo? The Japanese government estimates that it will be one out of 3.5 persons, or almost 30%, of which slightly more than half will be more than 75 years old. A staggering figure!
According to World Bank data, elderly people older than 65 accounted for 7% of the total population in 1999 for Singapore, whereas it was 1970 for Japan. The doubling of that percentage to 14% will not happen in Singapore until 2019, whereas it took place in 1995 for Japan. This means that while Singapore is indeed an aging society, Japan has become a super aged society now.
At the same time, we can say that Singapore is aging much faster than Japan. It will take Singapore 20 years for the aging rate to double from 7% to 14%, whereas it took 25 years for Japan.
One point to note is that the problem of an aging society is in fact a women’s problem. Why is it a women’s problem? Simply, women live longer than men on average, and therefore, a large percentage of seniors are women. It is not someone else who would suffer, but us—women—if good policies and solutions to the aging problem are not implemented. Another aspect is, when elderly people need a helping hand, normally, women are the ones to shoulder the responsibility.
Therefore, it is right for women to pay more attention to this issue. I applaud the efforts of the PAP Women’s Wing in focusing on this issue to get the right set of policies in place.
The other side of the aging society issue is the declining birth rate. The fact that people live much longer does not matter if the birth rate is high enough for the growing number of younger people to match the growing number of seniors. However our two countries suffer from very low birth rates. There are 1.28 births per woman in Singapore and 1.41 in Japan. The causes of the declining birth rate are complex, but one reason is likely to be that women feel society is not providing good conditions for simultaneously pursuing a career and rearing children.
In terms of narrowing the gender gap so that women can participate in activities more fully, here, Singapore does much better than Japan; Singapore is ranked 58th on the WEF’s Gender Gap Index for 2013, whereas Japan ranks 105th. Japan has a lot to learn from Singapore in this respect.
Before I discuss how to deal with the aging society and declining birth rate, let me raise one very important point. We tend to look at this issue as a “problem.” But is the greying of society purely a problem? The answer is that it depends on which side of the coin you look at. We could turn it into a golden opportunity.
First, we should be proud that we have an aging society. This is the result of our strides forward and our accomplishments. This surfaced because we worked hard to generate economic wealth. Income per person in Singapore was $52,000 in 2012 and 16th in the world, while the figure for Japan was $47,000. Greater economic wealth means better nutrition and better medical care. Right now the average life expectancy of Singaporeans is 82, while in Japan it is 83. In many countries, unfortunately, people just cannot afford to have an aging society problem because people cannot live long enough.
Another bright aspect of an aging society, and for that matter, a declining birth rate, is that it creates an opportunity: an opportunity for new industries and businesses to capture markets and provide new products and services, as well as an opportunity for everyone in Japan, including seniors and women, to participate happily to the fullest extent of his or her ability. These are important components of Abenomics, which is “the policy” of Prime Minister of Japan.
One famous example in Japan is gathering leaves and twigs business for Japanese restaurants where they are used to decorate the dishes being served, giving them a sense of togetherness with nature. There is a small village called Kamikatsu in Tokushima Prefecture in Shikoku, the smallest of the major islands of Japan, where more than half of the roughly 2,000 villagers are 65 or over. They pick up leaves, buds, and twigs from their gardens and the nearby mountains to assemble what is in demand that day. Demand and market information is provided to them via an easy-to-use computer terminal early in the morning and bidding is done on the telephone. The assembled leaves and other natural items are shipped by 1:00 p.m. The computer also supplies the sales ranking of the villagers. Some of them make as much as 10 million yen a year, which is about US$100 thousand.
This story tells you that if there is someone with an innovative mind, the aging society is an opportunity for seniors to extract the joy of working and to make money.
Another example would be a franchise business whose owners are predominantly over 65 years old. The service they sell is walking dogs. If you have a dog at home, you would have no difficulty in doing this job and it is good for your health, too. Apparently, some people make more than $3,000 a month.
Similar stories abound in regard to women. Mayor Hayashi of Yokohama decided that there should be no more waiting lists for childcare centers. She relaxed some stringent rules to allow private sector entities to enter the market under the city’s oversight, while increasing the budget for subsidies. This “Yokohama model” is now highly acclaimed in Japan, with many local governments now emulating it.
Former Secretary of State, Mrs. Clinton made a remark back in 2011 that if women’s labor participation rate becomes as high as men’s in Japan, Japan’s GDP would increase by about 16%. The participation rate becomes the lowest for women in their 30’s in Japan, although, fortunately, there has been an improvement on this point. This suggests difficulties in combining child rearing and work. It would be very good if these women who potentially want to work can actually work. One estimate by the government shows that by this alone, Japan’s GDP would increase by about 1.5%.
The aging of society will bring wide-ranging social impacts beyond the business impacts that I talked about. It could affect city planning, for example. Some cities have adopted policies for “compact cities,” where people live more closely together so that shopping and other activities can be conducted within a limited area. It will invite changes to the medical system, distribution system, and education system, to name a few.
It could affect politics as well. In Japan and elsewhere, senior citizens’ voting rate is higher than that of younger generations’. It is not known whether this makes a society more conservative. In some countries, younger generations can be equally conservative. But, I have told my children when they were young, “Go and vote by all means when you become eligible. Your generation is outnumbered by elderly people. Unless you vote, your generations’ interests will not be realized.”
Senior citizens can be more active politically than just going to vote. One famous example is the AARP (formerly, the American Association of Retired Persons) in the United States. It is a famous NPO with a membership of about 40 million, or more than 13% of Americans, which contributed to the passing of two bills: Medicare (1965) and The Age Discrimination in Employment Act of 1967 (ADEA).
If a society has good foresight, it can creatively and flexibly adapt itself to new needs. As many Asian countries face the same problems of aging societies, declining birth rates and the closing of the gender gap, we could all cooperate and compete with each other in overcoming them. I am sure this by itself would be a new source of dynamism for Asia.
Let me now turn to a set of principles on which we base our policies, particularly, social security policies related to the aging society agenda.
First, being elderly does not mean that everyone needs to be supported.
Japanese society needs the experiences and skills of its seniors to contribute to society. So, we need the ones who are healthy and able to work. The government’s role is to create an environment to make it easier for them to do so. We need to prepare for a society in which life expectancy is 90 and in order to do that, the social security system, which was originally designed at a time when life expectancy was 65, should be reformed.
Second, for the ones in need of support, Japan helps them based on the three-stage concept: first, immediate family members should extend help; second, if that does not work, neighbors and the immediate community should extend help; and finally, if that does not work, the government provides assistance.
Based on the above thinking, Japan is implementing a wide range of policies for seniors, and for that matter, women.
Let me give you some features of our social security policy, which has special bearing on the aging society.
Japan adopts a pension system which covers all nationals. A Japanese is responsible to pay upon reaching the age of 20 and will continue to pay until age 59. The payment goes to support the elderly of that time period. A major difficulty is that as Japanese society ages, the amount of money paid out to seniors gets smaller as fewer young people are supporting each senior citizen. The pension is also supported by taxes. To secure the funds for pensions, Japan will be raising its consumption tax to 8% in April from the current 5%, and ultimately to 10% in October next year. We are in the process of reforming our pension system to make it viable.
Another unique feature of the Japanese social security system is long-term care insurance. This is a system in which society as a whole supports people and their families who are faced with a situation in which someone needs long-term care. Under this system, local governments act as the insurer, and all residents 40 years old and older pay an insurance premium. When they qualify for care they can use long-term care services while paying only a fraction of the costs. Fifty percent of the cost is financed by the insurance premium and the rest by local governments. We introduced this in 2000.
There are some others features. Medical Insurance covers all Japanese. Employers are legally obliged to employ employees until 65 if employees want to continue working. In Japan, 9% of the total work force was older than 65 in 2012 and seniors will continue to be an important contributor to our economy as we will lose an estimated 10 million workers by 2030 due to the declining birth rate.
Many years ago, at a dinner I was invited to, I happened to sit next to the Swiss Ambassador. I asked him why Switzerland was able to become a rich country when they do not have much resources. “Progress comes from outside” was his answer, implying that neutral Switzerland accepted foreigners and foreign ideas.
Diversity, in my mind, is what brings progress to a society. Exposure to different ideas and different way of doing things stimulate people. People begin to think that, indeed, there are other and better ways to solutions. This is what brings progress to a society. In Japan and in many other countries, seniors and women are untapped sources for progress. To the two, I would like to add foreigners, as well.
This is why we need to work to have a correct set of policies regarding seniors, women, and foreigners.
As I said before, Asian countries will suffer from the problems of an aging society. Working together and sharing our experiences will make it possible for us to learn from each other and to find good solutions more effectively and, perhaps more importantly, it will bring us closer in the process.
There is a group in Japan my friends and I created for the betterment of women. Our motto is “We are the game-changers.” Indeed, our role is to change our society.