How Saudi Arabia can adapt as its population ages

How Saudi Arabia can adapt as its population ages

How Saudi Arabia can adapt as its population ages
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A report published last year raised alarm bells about the demographic transition in Saudi Arabia being in the early stages of shifting to an older population and considered the implications of that both socially and economically.

Currently, Saudi Arabia boasts that 63 percent of its population is under the age of 30. However, in a decade’s time, the shift will be noticeable and the percentage of those aged above 40, 50 and 60 (retirement age) will be high. The young population is an asset to Saudi Arabia, representing its engine for productivity and economic growth. That, however, does not mean that those who are in the older age categories are not important parts of the labor force, offering expertise and knowledge. Thus, while we need to take advantage of the young, vibrant population, we also need to make use of the middle-aged, sage population and the older, including retired, population to have a diverse, inclusive labor force and community working together and catering to the needs of all for the development of the country.

The report by Strategic Gears management consultancy explored the changing demographic dynamics in Saudi Arabia and the experiences of other G20 countries. It highlighted the potential long-term impact that an aging population can have on countries and on policy issues in Saudi Arabia’s context, particularly on the economy, labor market, health and social care, housing and infrastructure, and the society.

Globally, we are seeing increases in both the total population and the percentage of elderly people, in some countries more than others. Saudi Arabia has so far been aging far slower than many other nations, but the Kingdom is among the G20 countries with the highest fertility rate declines, which means a shrinking young population. Furthermore, life expectancy in Saudi Arabia has almost doubled since the 1960s, from 46 years to 75 years, and it is expected to reach 83 years by 2050.

Over recent decades, Saudi Arabia’s social and economic developments, as well as its advancements in public health and medicine, have contributed to this increase in life expectancy. As for the decline in the fertility rate, factors such as higher levels of education, especially among women, the increase in women’s participation in the labor force and higher living expenses have all contributed to changes in priorities and social norms, such as later marriage and childbearing and smaller families.

For Saudi Arabia, the report recommended that policymakers start taking the necessary measures now to both cater for an older population and mitigate the potential social and economic impact. While today those aged 65 and above in Saudi Arabia constitute the lowest ratio of the population (3.6 percent) compared to other G20 countries, it is estimated they will make up about 20 percent of the population by 2050. This is clear when looking at the largest age group, according to the 2022 census, which is those aged 25 to 54, who make up 52.75 percent of the population.

The growing number of older people will have a direct impact on human capital because there will be fewer workers and slower labor force growth

Maha Akeel

Vision 2030 has made it an objective to extend life expectancy to 80 years by 2030 and has outlined the strategies and activities that will steer the Kingdom toward realizing this objective, focusing on quality of life, including healthier lives and lifestyles. Addressing the fertility rate, Saudi Arabia has launched programs to help the increasing number of working mothers manage their work-life balance through childcare assistance, daycare centers and paid maternity leave.

The important thing is to realize the potential long-term impact of an aging population. The report emphasized that the growing number of older people will have a direct impact on human capital because there will be fewer workers and slower labor force growth. This is an issue that European countries are already struggling with and are trying to compensate for with migration.

A decline in the working-age population will put pressure on the potential growth of gross domestic product per capita. Meanwhile, if the retirement age remains constant and life expectancy rises, more people will be applying for pension benefits, which will mean increases in public spending on pensions and healthcare.

However, growth in the elderly population can also open up new markets and possibilities for entrepreneurship to meet unmet needs, particularly in the medical technology sector, as well as meeting demands for transportation, housing and entertainment. The current levels of healthcare services for the elderly, as well as accessibility to services, housing, social activities and sports, and the availability of elderly-friendly communities that are affordable to pensioners, leave much to be desired.

As for the labor market, the report highlighted initiatives being taken by some G20 countries on adjusting and adapting policies for the 60-plus population, including flexible retirements and employment with pension incentives. Unfortunately, many Saudis find their life after retirement empty, whether at home — with their grown-up offspring having moved out or relocated altogether — or socially, with nothing to do except walk in malls or socialize in cafes, even though they are still able and willing to work, volunteer and be active. There are no social clubs with nominal membership fees for family members of all ages that provide suitable activities and services. The sedentary lifestyle and unhealthy diet of many adults in Saudi Arabia also need to be addressed to avert chronic illnesses or disabilities.

The senior members of society are our parents and grandparents. They are valuable, honored citizens who have served their country and deserve dignified, respectful, safe and secure living conditions and a caring environment. In addition to welfare schemes and social protection programs to fight poverty, lessen inequality and encourage the elderly to be socially involved, more initiatives and programs should be created that aim to provide a system of informal care, such as home help facilities, home nursing, domestic support, senior citizen clubs, neighborhood support schemes and mobile clinics and nutrition advice.

* Maha Akeel is a Saudi expert in communications, social development, and international relations. She is a member of the UN's Senior Women Talent Pipeline. Twitter: @MahaAkeel1

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