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Asia’s silver linings
Publication Date : 06-12-2013
Foreign retirees have flocked to Asian countries
They are scattered all over Asia and come from all socioeconomic backgrounds. You will find them in places like Chiang Mai and Phuket in Thailand. They can be found in the Philippines, Malaysia and Bali in Indonesia. You can even find them in Cambodia, Vietnam and China.
They are foreign retirees — mainly Australians, Europeans and North Americans fleeing cold winters and the prospect of spending their twilight years in a nursing home.
Although small in number, they are a growing minority in a region where retirement from Japan to India has become big business.
As Asia’s economic prosperity has grown, so too has its ageing population.
The Manila-based Asian Development Bank (ADB) has estimated that Asia’s elderly population will reach 922.7 million by the middle of this century.
The United Nations estimates that in India the number of people aged 60 and above will rise from the current level of around 8 per cent to more than 18 per cent by 2050. In Southeast Asia, the number will rise from 8 percent to 22 percent and in China from 12 per cent to over 33 per cent.
According to the ADB, Asia is on track to becoming the oldest region in the world within the space of just a few decades.
The multilateral lender says the “policies and systems of governments in Asia are hardly prepared for this vast demographic shift”.
Even so, some governments — Singapore, Thailand, Malaysia and the Philippines — are cashing in on retirement, or the “silver economy” as it is now being called.
According to Singapore-based Ageing Asia, a marketing consultancy that specialises in ageing in the Asia-Pacific region, by 2017 India will have more than 118 million people aged over 60, Japan 30 million, China 217 million and 24 million in Indonesia.
The business of ageing — from developers building retirement villages for foreigners or locals, to medical care and companies specialising in holidays for the elderly — is expected to be worth more than US$3 trillion in Asia by 2017, according to Ageing Asia.
John Harvey, a former partner with global accountancy firm Ernst & Young, spent more than 40 years in the region. But rather than return to his homeland of the United Kingdom he chose to retire in Malaysia.
“It was an easy decision to make,” he tells China Daily Asia Weekly.
“I wanted a place which had a pleasant climate, with a reasonable cost of living, where English is spoken and where the medical facilities were first class … Malaysia ticked all the boxes,” he says.
Harvey lives in a condominium complex on the outskirts of Kuala Lumpur.
“It is within easy access of everything I need,” he adds.
Malaysia actively encourages foreign retirees as part of a government development programme which is tied in with its growing medical tourism sector.
Under the Malaysia My Second Home (MM2H) plan, visas are valid for 10 years depending on whether or not retirees can meet set financial requirements which include having a fixed deposit of at least US$47,500 in a Malaysian deposit account or a pension of US$3,160 a month.
Thailand offers a similar deal, while Singapore actively targets the high-end retiree.
In the Philippines, some 160,000 foreigners have taken special resident retiree visas. This does not cover those who have retired on investor or tourist visas and those who opted to marry locals.
No government agency in the Philippines has comprehensive data on foreign retirees specifically. Of those with retiree visas, the top nationalities include Chinese, South Koreans and Japanese.
They can stay in the country so long as they pay a cash guarantee of US$5,000 and have at least US$1,500 in monthly pension income.
“No one knows with any degree of certainty how many retirees there are in the region,” says Rhenu Bhuller, senior vice-president for healthcare with global consultants Frost & Sullivan.
She explains that in Malaysia, Thailand and Indonesia (Bali) “we have been seeing growth of around 10 to 12 percent over the last two years”.
“Like the millions of tourists who visit the region each year, retirees are drawn by the lifestyle,” she says.
Retirees have flocked to beachfront locations like Phuket in southern Thailand. Others enjoy the relatively cool and compact city of Chiang Mai, tucked away in the hills of northern Thailand where, according to retirement and investment services group Boutique, some 30,000 foreigners have already settled.
Bhuller says many retirees are initially looking for an escape from the dreary, cold winters in the northern hemisphere.
“Many come for the winter months then go back home, but after a few years they come back for good.
“They find life more affordable, property cheaper and a lifestyle they never had back home.”
A recent report in the Bali Advertiser, a publication aimed at the expat community, said the popular Indonesian tourist destination had become a ‘hot spot’ for retirees seeking a higher quality of life at a much cheaper rate than in their home countries.
The report said: “A growing colony of retirees are now able to call Bali ‘home’ thanks to a retirement visa available to Westerners aged 55 or older, who can fully support themselves financially. The one-year visa, which costs US$1,000, can be extended every year until five years has elapsed, at which time they can apply for a permanent stay permit.”
The standard and quality of healthcare in the region are becoming more important for retirees.
Bhuller says medical services have improved “enormously” in recent years, with around 27 hospitals given accreditation by the internationally recognised Joint Commission International, an organisation that monitors the quality of medical services globally.
Strategy consultants Roland Berger in a report earlier this year said health expenditure in Southeast Asia has increased two and a half times between 1998 and 2010, reaching nearly US$68 billion. Private insurance, however, accounts for only 4 percent of this total.
“Three major factors are driving this development: Steady population growth, steep increases in medical costs, and — most importantly — increases in per capita consumption of healthcare services,” the report said.
It said the maturity of the healthcare market varies widely across Southeast Asia.
“Cambodia, Laos and Myanmar are still at an early stage of development, while Indonesia, Vietnam and the Philippines provide basic healthcare services to their populations. Malaysia and Thailand are at a more advanced stage of development and now focus on providing high-quality care,” the report added.
The most advanced market is Singapore, which promotes private contributions to the financing of healthcare.
Healthcare services tend to rate highly for retirees, with many of them living within easy reach of major hospitals.
Forbes magazine, in its annual Best Countries to Retire list, placed Malaysia in third spot globally and Thailand in ninth place in its 2013 survey.
Healthcare is a major concern for retirees, and Forbes reported that Malaysia’s strong reputation for medical tourism is an added advantage.
“You can count on excellent care that’ll run you less than half of what you’d pay in the US,” said Jessica Stevens, executive editor of International Living magazine, which has found that Malaysia is a favored retirement destination for people from North America.
While familiar enough in some respects — for example English is commonly spoken in these countries — Southeast Asia is still exotic enough for active retirees to enjoy exploring.
Some cities in China have also been pipped as retirement havens. Suzhou, Hangzhou and Zhuhai are among the popular destinations. These cities are known for their scenic landscape and laid-back pace of life.
Some older Southeast Asian people of Chinese descent have been returning to the villages and towns where they or their ancestors had come from to stay for extended periods.
Singaporean Koh Hak Kin is in his 70s and is an example of this trend. Born in Chaozhou, he came to Singapore with his father when he was a young boy. He was subsequently sent back to China for his education before World War II broke out and he was fetched back to Singapore again.
Now retired, Koh splits his time between Chaozhou and Singapore. He spends at least two to three months at a time in his home village where he still has relatives.
“It feels like home,” he said. “I know this place, I know the people, so I am very comfortable here.”