Ageing in Bangladesh: Are we ready for more social spending?

Bangladesh has seen a spike in the number of elderly people over the years, government data shows, raising questions about whether the country will be able to reap the demographic dividend up to the expected level and the associated economic benefits.

The rising share of the population aged over 65 has economic, social and health consequences and also brings up the question about whether the low middle-income country is prepared to give them a decent life.

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Bangladesh needs to do better for its elderly

The proportion of the population aged 65 and above was 6.14 percent last year, up from 5.67 percent a year before, according to the key findings from the Sample Vital Registration System 2023 of the Bangladesh Bureau of Statistics (BBS).

The dependency ratio of the people who are over 65-plus years rose to 9.4 percent in 2023 from 8.6 percent in 2022.

The dependency ratio is a measure of the age structure of a population and also relates to the number of individuals likely to be economically "dependant" on the support of others.

"This result tells us to take preparation promptly and gives messages to the government about the types of policies and investments that have to be initiated," said Prof Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue.

To address the problem, the country should focus on quality education, enhancing technology adoption capacity, and raising productivity.

"As days go by, the demographic dividend's windows are shrinking," the economist said.

Rahman urged the government to support the elderly people. "We have to increase the assistance for them through social safety nets."

In 2015, the government unveiled the National Social Security Strategy.

"We need to start implementing the strategy now."

In a major move, the government has introduced universal pension scheme as part of the social safety net strategy.

"The pension scheme will be effective for us," Prof Rahman said.

Mohammad Mainul Islam, a professor of the population sciences department at the University of Dhaka, sees three challenges that may stem from an aging population.

One of them is whether the country would be able to make the most of the demographic dividend that a young population offers.

As the population ages, ensuring a steady healthy growth of the economy and ensuring public health services for them would face major obstacles, he said.

By 2050, people aged 60 and above in Bangladesh will number 3.6 crore and constitute 22 percent of the total population, said the United Nations Population Fund (UNFPA) in 2022.

This is consistent with global trends. According to the World Health Organization, by 2030, one in six people in the world will be aged 60 years or over.

Prof Islam says Bangladesh will become an ageing society by 2029 and will stand as an aged society by 2047 like Japan.

He explains that when a country's senior dependants account for 7 percent or more of the population, it is called an aging society. If the rate goes past 14 percent, the nation is termed as an aged society.

In the long run, the share of the population group aged more than 65 years will increase as life expectancy is on the rise.

This means the government would have to devise ways to keep this cohort involved with the labour market.

"We will have to think about the health and social welfare system and plan beforehand," Prof Islam said.

The spike in the elderly population comes as pressure on government budget persists because the country has one of the lowest tax-to-GDP ratios in the world. This has forced it to allocate a lower-than-expected amount of funds for social safety nets.

The social safety net budget for this fiscal year has been raised 11 percent from Tk 1.13 lakh crore to Tk 1.26 lakh crore. The allocation is 16.58 percent of the budget and 2.52 percent of the gross domestic product.

Currently, the monthly allowance for the elderly is Tk 600, with the number of beneficiaries standing at 58.01 lakh. This means about half of the people belonging to this group is under some form of state support.

The number of the elderly people rose 6.14 percent to more than 1.04 crore in 2023, according to the BBS.

Qazi Kholiquzzaman Ahmad, chairman of the Dhaka School of Economics, said the proportion of young population aged 15-29 will decline and the ratio of the aged population will increase in the coming years.

"So, the ratio of the working population will fall overtime. For this, preparation should be taken from now."

He said health complications rise as people grow older and they also suffer from loneliness as other family members remain busy with work and other activities.

"We have many parents whose children work abroad or live in urban areas. These elderly parents remain lonely. The number of lonely elderly is increasing in rural areas too," said Prof Ahmad.

In 2013, the government framed the national policy on older persons and enacted a law making it mandatory for children to provide upkeep for their parents.

"To the best of my knowledge, there is no progress in the implementation of none of the two," he said.

The economist said there are initiatives by the private sector and NGOs to set up homes and other facilities for older people.

"The provision of such facilities should be increased. At the same time, the oversight of the government needs to be enhanced to ensure quality service delivery."

Prof Ahmad said the present government has promised universal healthcare in its election manifesto and should pay heed to implement it.

Binayak Sen, director-general of the Bangladesh Institute of Development Studies, said the BBS figure implies that Bangladesh is in the middle of enjoying the demographic dividend.

"When the demographic dividend declines, the ratio of dependency will increase. This calls for paying attention to social protection," he said, urging the authorities to bring the elderly population under the universal old age protection scheme.

As expenditures are involved, Sen suggested the government include the elderly aged more than 70 years under the universal social protection scheme initially before including those above 60 years.