Progress in Jeju Declaration
1. APEC Finance Ministers acknowledged the importance of aging issues within the APEC region in September of 2005 in Jeju, Korea, and the necessity to address this issue by sharing experiences and derive policy recommendations. As a direction of the Jeju Declaration, the Experts Group on Aging issues was launched by end of 2005, and two workshops have successfully been held in Seoul and Hanoi. Experts from twelve member economies and ABAC selected three main topics on aging issues and under these topics, fifteen specific issues were discussed.
2. The following summarizes the major findings of the activities of the experts.
i) Aging population leads to slower economic growth. As the size of the labor force contracts, the growth rate of the economy will slow and the detrimental effects of population aging on economic growth will become clear. The relevant question therefore for policymakers is what happens to the per capita economy growth.ii) Population aging threatens fiscal soundness and sustainability. Higher expenditures for health care and other elderly care, social security payments and pension payments combined with a smaller tax base create a strain on the government budget.iii) Population aging affects financial markets and financial industries. Robust financial markets create savings opportunities for individuals to prepare for retirement. Returns to capital are likely to decline as the societies age and the capital labor ratio increases. Aging is occurring so facilitating economic adjustment and strengthening financial markets are important for financial and economic stability.
3. The comprehensive final report has been submitted to the Finance Ministers' Meeting on September 7-8, and the Ministers appreciate the efforts of the Expert Group. This provides a background of general policy guidelines on the aging issues in APEC. In order to fulfill the general objective of the Expert Group, the Ministers confirm the need for further in-depth activities in this area in order to derive specific policy guidelines.
4. With the support of member economies, we hope that the efforts of the Expert Group develop into a new policy-initiative as a multi-year process. In addition, the initiative needs support through a more comprehensive group, including experts from IMF/WB/ADB and other related IFIs and ABAC, aimed towards policy guidelines on aging issues. We recommend Korea and interested economies to prepare a detailed proposal.