‘Indonesia must tackle declining work-age population’

THE Indonesian government needs to start formulating policies to anticipate a decline in the working-age population, as the demographic bonus – a condition where the productive population exceeds the non-productive population – is projected to peak next year and end in 2036, according to Statistics Indonesia (BPS).

The population will grow from an estimated 266.9 million last year to 318.96 million in 2045, according to the BPS’ 2015-2045 projection.

The demographic bonus, which started in 2012, is expected to close out in 2036, meaning the non-productive population will exceed the working-age population after 2036.

That would mean that the younger generation would bear a higher burden to support the older generation, Gadjah Mada University professor Tadjuddin Noer Effendi said.

He suggested that the government consider increasing the mandatory retirement age to expand the working-age population, which currently comprises people between the ages of 15 and 64.

“A policy [to be considered] by the government is to employ not only people in the productive age but also those who are above 65 years.

“If the retirement age was moved back, productivity could be maintained,” said Tadjuddin, arguing that such a move would ease the burden on the younger generation.

Formulating policies for the population entering the retirement age was important, Tadjuddin said, arguing that without support from the government that age group was prone to falling into poverty.

The BPS projections said Indonesia’s elderly population – those above 60 years – will increase from 22.99 million in 2015, or nine per cent of the population, to 63.31 million in 2045, or 19.85 per cent of the population.

Un i v e r s i t y of I ndone s i a ( UI ) Demog raph ic I nst it ute a ssociate director Dewa Gede Karma Wisana a lso echoed Tadjuddin’s v iew, saying t hat increasing t he ret irement age was one policy t hat would need to be considered by the government so t hat t he elderly cou ld rema i n act ive i n t he labour force.

“[ The policy] should take into account whether they [the elderly] are still productive, active and have adequate skills to be in the labour force,” said Dewa.

Center of Reform on Economics Indonesia executive director Mohammad Faisal said next year’s peak in the demographic bonus added to the urgency for the government to unlock economic growth potential, given that the “window of opportunity” would close in 2021.

“What we hope for is that we could utilise the demographic bonus [so that] we have the highest productivity during its peak. Once we pass [the peak], it will become harder to increase public welfare, as the effectiveness [of such programmes] will decline,” said Faisal.

The government is set to conduct a census, which is done every 10 years, starting this month to update its data on the country’s demographics.

The census, which will be carried out by the BPS, will be the first population survey in which the public can opt to complete the questionnaire online through the census website at sensus.bps.go.id. The online census will be conducted between February 15 and March 31.

Meanwhile, those who are unable to complete t he census online wil l be approached by BPS of f icia ls for phone or face-to-face inter v iews in Ju ly.

The upcoming BPS census will comprise 21 questions, including questions for basic data, such as place of residence, nationality, job status and homeownership status.

The BPS will follow up this year’s population survey with a sample census next year, which will gather more detailed demographic data, as the BPS is set to ask respondents 82 questions on a wide range of topics.

President Joko “Jokowi” Widodo has called on the public to participate in the upcoming census, emphasising the importance of accurate data for policymaking and government planning.

“The census data . . . is aimed at generating single population data, [which is] the basic data needed to make plans in various [policy] areas,” Jokowi said late last month.

BPS head Suhariyanto explained that the 2020 census would use a combination method, as the agency would refer to data from the Home Ministry’s Population and Civil Registry Directorate-General for the baseline data for the census.

In this year’s population survey, the BPS would gather data from Indonesians living at home and abroad, while foreigners residing in the country for more than a year would also be included in the census, Suhariyanto explained.

He went on to add that the survey was intended to capture detailed data on the country’s population as well as provide demographic parameters and other characteristics of the population to project future demographic trends.

“The data from the 2020 census will not only come in handy for planning at the present time but also anticipate future [trends],” said Suhariyanto.