Manila - Asia must act swiftly to counter the huge economic impact expected from an aging population as the region is poised to become the oldest in the world within a few decades, an Asian Development Bank (ADB) report said Tuesday.

The report, "Aging in Asia," noted that Asia's share of the global elderly was projected to rise to 62 per cent by 2050, with the demographic shift more advanced in such developed economies as Japan, Hong Kong and Singapore.

"Population aging will touch every aspect of our lives and unless we start making difficult policy choices soon there is very little chance that Asia will age gracefully," said Jayant Menon, co-author of the ADB report.

Some countries - such as Japan, where nearly two of five people will be 65 years or older in 2050 - are already facing the challenges of an aging population, which include a declining labour force and spiraling pension and health care costs.

Developing countries, by contrast, are yet to face such problems, with their working populations set to continue expanding sharply over the next two decades.

"This, however, provides only a narrow opportunity to deal with aging-related issues and policymakers need to take advantage of it," the Manila-based ADB said.

The report noted that only about 60 per cent of young men and 40 per cent of young women in developing Asia are employed, many in low-paid or insecure jobs, leaving the region facing the prospect of aging with lower levels of income.

It urged developing economies in Asia to adopt policies that allow them to take advantage of their swelling workforces over the next two decades.

"That could include boosting investment in education, improving workers' skill levels, and ensuring incentives are in place to attract more capital from neighbours that have surpluses," the ADB said.

Developed economies on the other hand should aim to remove barriers to women's entry into the workforce and increase or remove the mandatory retirement age, the report added.

The ADB said Asian economies could also look into overhauling overly generous, underfunded universal pay-as-you-go pension schemes or replacing these with funded pension programmes that are financed by very long-term government bonds.

"Alternatively, policymakers could consider creating voluntary accounts or provident funds as supplements to pay-as-you-go schemes," the bank said. (dpa)