Combating Asia's Aging Crisis

A seismic shift in Asia's demographics is well under way. Asian countries, including China, are facing an aging crisis that could seriously dampen future economic growth.

Take, for instance South Korea, the host country of the recent G20 Economic Summit. Its ascension into the economic elite was fueled by the hard work of more than seven million baby boomers who entered the workforce in the 1980s. That important age group, representing 17% of the entire population, has just begun to retire, and most could be out of the workforce in less than a decade. The results could be a mass brain drain, wage inflation in skilled positions, and thinning of pensions.

The obvious solution to an aging labor pool is keeping and training workers to be around longer. In the Japanese and Korean private sectors, however, progress on that front has been slow — with management and labor united in pushing the status quo. Many companies still use seniority-based pay systems and fear that such a move will only lead to higher wage costs. Likewise, unions also do not want to rock the boat if it means having to go to merit-based wages for everyone.

Moreover, face-conscious Asian companies, especially in the service industry, want to present a corporate persona that is dynamic, vibrant, and global — in other words, young. It also doesn't help that youth unemployment, always a sensitive political issue, is high. Many current-day considerations work against hiring more or keeping older workers.

This myopia ignores a sobering reality that shows many Asian countries having the lowest birth rates in the world and the older population (60 and over) already outnumbering younger people (15 and under). Further, importing replacements of outgoing personnel is less of an option in Asian countries that have tight immigration policies. With fewer talent resources to draw from, the need to welcome back the "boomerangs" (returning boomers) may come sooner than we think.
While the task of addressing the graying workforce in Asia will be a vast societal undertaking carried out over a long period of time, companies can help ease the transition by adopting steps, including the following:

• Accept the "new-old" normal in Asian HR. Companies need to jump over the psychological hurdle to acknowledge that the population is aging quickly and that it has HR consequences. In addition, companies should spread the mindset that the graying population can be repositioned to help solve the related labor problems.
• Deconstruct corporate working norms. Asia takes pride in its Confucian tradition, but in companies, it just gets in the way of hiring and managing older workers. The dogma that the old are wiser and have to be respected ends up hurting this segment because it reduces their flexibility. Respect is fine but it should flow both ways between the young and old. Another norm common in countries like Japan and Korea is emphasizing long hours of onsite work. If the added workers can contribute online while offsite, the lack of in-person contact could lessen the cultural discomfort of younger bosses working with older employees.
• Promote older workers' flexibility. The biggest knock against the older workers is their low flexibility which is much worse in Asia . To overcome that stigma, these workers must show that they are able to cope with new working terms and conditions. The playbook for improving flexibility is well established in the West, but it needs to be championed more in Asia by influential companies such as POSCO or Kawasaki Heavy Industries.
• Use global companies as change agents. Global companies operating in Asia can play a positive role in shaping and framing new personnel practices. This is one area where global businesses do not have to be so politically correct in adapting to their host country's local culture. They can show that age (or gender) should not matter — that anyone, when capable, can rise to top positions, and if still capable, can stay there.

 

Russia a 'special partner' : Manmohan Singh

Pacts in space, nuclear, defense and pharmaceutical sectors signed:

The highlight of the 30 agreements was the consolidation and extension of strategic cooperation in the civil nuclear, hydrocarbons and space sectors.

Russia joined the U.S. and France in speaking of India and itself as “states possessing nuclear weapons” and promised to quarterback India's bid for full membership at the Nuclear Suppliers Group and other multilateral export control clubs. Russia reiterated its support to India for a permanent seat on the United Nations Security Council, but the formulation used was the same as at the previous two summit meetings. There was also public acknowledgement of India's imminent membership of the Russia-China-led Shanghai Cooperation Organisation.

In the civil nuclear sector, a firm agreement on setting up two more reactors at Kudankulam, beyond the four already in the pipeline, was postponed pending the ongoing talks on the liability issue. The Russian side, which wants a firm assurance from India for as many as a dozen large units, essentially wants to wait and see whether New Delhi makes any concession on the liability front to the United States. Moscow is also looking closely at the kind of pricing structure that is emerging from French and American suppliers. Russian reactors are due to come up at Haripur in West Bengal, besides Kudankulam.

Apart from these projects, India and Russia agreed to work together at the global level on nuclear energy. In the first initiative of its kind to be taken by either of them, the two countries agreed to consider cooperation in the peaceful uses of nuclear energy with third countries and said, “as supplier states, [they] support multilateral approaches to the nuclear fuel cycle at the IAEA.” Both sides also identified joint research and development in reactor technology as an area on which the two atomic energy establishments would hold detailed discussions.

In defence, India and Russia marked the beginning of their first-ever collaboration in producing a next-generation fighter aircraft, with the inking of the preliminary design contract agreement.

The intention to collaborate in the hydrocarbons sector was given a concrete shape by an inter-governmental agreement that will evolve into an extensive road map largely modelled on the Sino-Russia partnership in this sector. The Memorandum of Understanding between Sistema, a telecom-petro giant with rights over two lucrative hydrocarbon fields, and ONGC Videsh progressed to a framework agreement on cooperation. Three agreements in the space sector will give India access to the Russian satellite constellation, the Global Navigation Satellite System.

The two sides also gave a firm shape to a partnership in the pharmaceuticals sector, in which India sees a $15-16 billion opportunity, with the joining of hands by the private sectors of both countries for joint ventures in Russia.