An aerial view of the coastline at Bali island, Indonesia. WU PENGFEI/FOR CHINA DAILY
Editor's note: In this weekly feature China Daily gives voice to Asia and its people. The stories presented come mainly from the Asia News Network (ANN), of which China Daily is among its 20 leading titles.
The retirement business remains underdeveloped in Indonesia, but experts say the aging population at home and abroad means the time to invest is now.
According to the World Health Organization, the number of people aged 60 years and older was 1 billion in 2019 and it is expected to rise significantly in the next few decades.
Indonesia's senior population is projected to reach 74 million by 2050, or about 25 percent of the total population. According to government institute Statistics Indonesia's national socioeconomic survey, Indonesia currently has 29.7 million elderly, making up about 10.75 percent of the population.
Statistics Indonesia classifies a population as aged when more than 7 percent of the people are elderly, which means Indonesia falls into that category.
According to a report published by property agency Colliers Indonesia in May, the domestic senior housing sector "remains relatively undeveloped", largely due to cultural values of respect and devotion to one's parents.
Moreover, Indonesia's population is still comparatively young, making the sector "unattractive to developers and investors at this time", leading to a limited supply of senior housing.
The report also highlighted that senior housing development is unevenly distributed across the archipelago and remains concentrated in the Greater Jakarta area.
Senior tourists visit a store in Bali, Indonesia. PUTU SAYOGA VIA GETTY IMAGES
Ferry Salanto, Colliers' senior associate director, said other regions and cities in Indonesia also had growth potential in the senior housing industry, notably Bali, which could leverage its appeal as an attractive destination for foreign retirees.
He said that Bali's biggest market for senior housing is customers from overseas. He further emphasized that the senior living ecosystem could be built in any area by developing its supporting facilities to accommodate senior living.
"So, sell the property and services altogether in one package," he suggested.
Herman Kwik, chairman of the Indonesian Senior Living Association, also pointed to foreign senior citizens as a potential market for areas like Bali.
"Bali is known for its tourism… I think the potential lies in Bali," he said.
He added that while many sectors in Bali had tapped the potential by offering hotel services targeting foreign seniors, these may not meet all their needs and it could expand the industry by also investing more in retirement homes with adequate senior living facilities.
The senior housing industry in the country has existed for more than a decade, he noted, but it remains relatively small and has shown only modest growth so far.
"But we see this as a starting point. Moving forward, we will thrive faster than in the past 10 years, considering the rising consumer awareness about commercial (solutions) and shifts in family culture and lifestyle," he said.
"Demand will also increase in the next five to 10 years, but it is not yet apparent," he said, encouraging more investors to enter the industry even if it meant starting small because when the growth booms, "it will come big and fast".
He also urged the government to implement clearer regulations, streamline permit procedures and provide tax incentives to boost investments in the sector.
In addition, he suggested targeted subsidies for those most in need, encouraging the population that could afford private-sector retirement services to consider switching to commercial solutions.
I Dewa Gede Karma Wisana, head of the University of Indonesia's Demographic Institute, explained the implications of Indonesia's demographic trends of a decreasing mortality rate, increasing life expectancy and lower fertility rate.
Tourists shop for souvenirs in Bali, Indonesia. FIRDIA LISNAWATI/AP
The demographic transition will result in a demographic bonus, with a larger proportion of the population aged 15 to 64. Over time, this population will age, eventually leading to a surge in the elderly population.
Older Indonesians without health or retirement safeguards are expected to stay in the workforce but are likely to rely on informal jobs, resulting in unstable incomes and increased vulnerability to serious health issues.
"But if the senior citizens have assets and sufficient retirement protection, they can have a good quality of life and enjoy their retirement," he said.
Dewa pointed to opportunities despite the challenging impacts, including the "silver economy" and "silver opportunities", which are expected to drive demand for goods and services related to senior living.
"Geriatric clinics within hospitals will be crucial. Demand for long-term care and caregivers will emerge," he said.
Furthermore, in the finance sector, the opportunity could be maximized by offering pension funds and guarantee programs.
"The potential has to be developed from now on," he said.
Dewa emphasized the need for the government to identify senior citizens' needs and characteristics to provide effective services and protection, as well as strengthening health services for the elderly and exploring community and family-based programs to ensure their welfare.
The government recently acknowledged the growing potential of the segment, with Indonesia's Coordinating Minister for Human Development and Cultural Affairs Pratikno saying that the silver economy could stimulate growth in many sectors.
"In the silver economy, the specific needs of the elderly population, such as health equipment, rehabilitation therapy and senior-friendly public services open a great potential for investment and innovation," he said in a news release in December.
THE JAKARTA POST, INDONESIA
