Investments for optimizing the nation’s demographic bonus

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demographic
(Source: iStock)

Jakarta, IO – The UN projects an increase of the world population to eight billion people by November 2022. As a country with high reproduction rate, Indonesia has the opportunity to benefit from this change in world demography, by resourcing a higher productive-age population than a country with a non-productive one. On the other hand, we are sorely lacking in human resource investment. 

“Our human capital investment return rates are markedly slower than our population aging rate. The country is literally growing old before it’s getting rich. We therefore need concerted effort from the Government. Don’t just leave the people management to our population, who have enough on their plate just trying to survive,” observed University of Indonesia Senior Lecturer in the Faculty of Economics and Business, Prof. Dr. Sri Moertiningsih Adioetomo, in the World Population Day commemoration held in Jakarta, Monday (11/07/2022). 

According to the 2020 National Census, our productive age population (defined as 15-64 years old) is 70.72%. A dependence ratio of 41 signifies that each 100 productive age citizens take care of themselves and 41 non-productive age persons as well. We need to anticipate future changes in this situation, as the proportion of elderly (60 years old and more) continues to increase, rising from 7.6% in 2010 to 9.9% in 2020. That’s an increase of 26 million. The Census also projects the number of elders in 2045 to rise to 63 million people. 

Prof. Sri points out the direness of the lifecycle deficit. A working-age population must earn much more than they themselves consume, because they are obliged to pay for needs of both their young children and their elderly parents, alongside their own. “The Government should really bolster its HR investments. This effort must even start during the first 1,000 days of life, because each USD 1.00 invested during this period will eventually generate a return of investment of USD 7.00,” she said.