Publication Date

2016

Abstract

[Excerpt] While Asia remains a key driver of global economic growth, the outlook for the region anticipates slow marginal growth for 2015 before rebounding in 2016 and remaining stronger for the next 2 years. India’s growth and the increased demand from the United States of America (US) will offset slower growth in the People’s Republic of China (PRC).

Downside risks may impact the regional economic outlook. First, the anticipated rise in US interest rates, while indicative of a continued recovery in the global economy, will hit the region during a time when growth remains tempered. The Eurozone recovery is still constrained by the debt crisis, which has global implications. Ongoing fears about the stability of PRC’s financial markets may also have an impact.

Fears of instability remain in Asia’s domestic financial markets despite the capital inflows that have underpinned the rapid economic growth in the region. The recent global and domestic shocks, along with the “taper tantrum” in the spring of 2013, the continuing decline in global oil prices, and PRC’s adjustments to its monetary and financial policies, have contributed to volatility in regional financial markets.

Looking at longer-term trends, rapidly aging Asian populations and socio-cultural changes in the informal, family-based, old-age support mechanisms have created a rising demand for income and support services for the elderly and the poor. Therefore, governments and their populations are rightfully concerned about the long-term sustainability of their social security and fiscal health.

Public pension systems must find ways to cope with these pressures while many already struggle with structural challenges such as early retirement ages, diverging replacement rates under different systems, liberal withdrawal policies, and limited coverage. These factors are further exacerbated by restrictive investment mandates, which significantly curtail the ability of many developing pension systems to seek higher returns through a more diversified investment portfolio.

Comments

Suggested Citation
Asian Development Bank. (2016). Strengthening public pension systems in Asia: Proceedings of the 2015 ADB—PPI conference on public pension systems in Asia, Focus: Cambodia, Myanmar, Lao People’s Democratic Republic, Thailand, and Viet Nam. Mandaluyong City, Philippines: Author.

Required Publisher's Statement
© Asian Development Back. Available at ADB’s Open Access Repository under a Creative Commons Attribution license (CC BY 3.0 IGO).

Share

COinS