東南亞的人口命運｜人口紅利的過去·今天和未來｜東南亞人口問題觀察（下集）｜東南視界 EP5

Why has Southeast Asia, once the creator of the Asian Miracle, suddenly seemed to lose its momentum?

Why are factory owners on one side desperately shouting that they can't find suitable workers, while young people on the other side would rather deliver food, become influencers, or even lie flat at home, than work in a factory?

Why do those first-generation Chinese entrepreneurs who spent their lives building in Nanyang, who have clearly accumulated wealth, have to face the awkward reality that while the business remains, their children are unwilling to take over?

Is it because we have become lazy?

Or is it because we have become old?

As the demographic structures of Thailand and Singapore increasingly resemble Japan's, and as Vietnam's legs chasing wealth begin to age, will Southeast Asia's future be the next world factory, or a massive nursing home?

Today we will continue to finish the story of Southeast Asia's population issues.

Today we broaden our view, from history to the future, to complete the demographic puzzle of the entire Southeast Asia.

First, we need to correct a common misconception.

Was Southeast Asia's past economic takeoff really just because there were many people?

Turning the clock back to the end of the 20th century, that economic frenzy known as the Asian Miracle indeed had a core engine called the Demographic Dividend.

Simply put, there were more people working and fewer people just eating.

The factories were full of strong, young people.

The social burden was light, so the economy naturally took off.

What is the Demographic Dividend?

It is when a country's working population grows faster than the population that needs to be supported.

That is to say, the working-age population aged 15 to 64 is expanding rapidly, while the proportion of children and the elderly decreases.

To use an analogy, it's like a village where the number of people working suddenly increases, while those needing care decreases.

The village's harvest naturally increases.

Economists have calculated that in the 30 years from 1970 to 2000, the GDP per capita in East and Southeast Asia grew at an astounding annual rate of 4.32%.

Note this number.

Within this 4% growth, nearly half was a free gift purely from demographic structural changes.

In other words, even without technological breakthroughs or institutional innovation, just by having young people, the economy could grow.

However, the Demographic Dividend is not a gift falling from the sky.

It is more like a "limited-time voucher".

The World Bank warned long ago that the Demographic Dividend doesn't happen inevitably.

If you don't activate it, having many young people could instead become a source of social instability.

Southeast Asia back then did three things right to cash in this voucher.

First, fewer children.

To increase the ratio of the working population, countries promoted family planning.

Second education.

Building roads is not as good as building people.

Sending young people to school turned them from physical labor into human capital.

Finally, and most importantly, openness.

Opening the national doors to let foreign capital in, providing jobs for these young people.

This explains why, with similarly young populations, Latin America fell into a debt crisis while Southeast Asia created a miracle.

So the conclusion is stinging: The Demographic Dividend isn't useful just because there are many people; it's only useful when there are many useful people.

So between 1965 and 1990, the structure where the working population grew faster than the dependent population, coupled with corresponding human resource policies, contributed 0.9 to 1.8 percentage points of growth annually.

This is not a small number.

There is a saying in economics: A variable that can consistently contribute one percentage point is a national-level golden engine.

So, let's summarize three points: Fewer births, meaning favorable family planning policies; Education, meaning massive investment in human capital; Openness, corresponding to opening the market, attracting foreign investment, and raising savings and investment rates.

Southeast Asia's prosperity over the past 30 years was not just because they were young, but because they turned youth into productivity.

Let's quickly fast-forward to the present.

Entering the third decade of the 21st century, the entire Southeast Asia is facing a very critical turning point.

The voucher of Demographic Dividend that drove the economic takeoff is about to expire.

This is not a slow change, but a structural reversal.

On one hand, fertility rates continue to decline; on the other hand, life expectancy keeps rising.

The result is that the population aging speed is accelerating.

But here, we must see a very important fact: Southeast Asia is not a uniform entity.

Between Southeast Asian countries, there are so many differences.

Even a single issue in any single country could be a standalone story.

Similarly, the speed of demographic change in different countries is not on the same track at all.

The ISEAS – Yusof Ishak Institute in Singapore proposed a valuable reference framework, dividing today's Southeast Asian demographic structure into three speeds.

You can also understand it as three gears.

You can check for yourself to see which gear the country you care about is in.

First Gear: The Dividend Exhausted Zone.

The representative countries are Singapore and Thailand.

The population structures of these two countries have entered the adult stage.

The population structure has matured.

The proportion of the working-age population has peaked and started to decline.

The Demographic Dividend is basically exhausted.

Both countries have formally entered a deeply aging society.

In other words, their dividend window has closed.

You could even say it has slammed shut.

To use an analogy, it's like a relay race.

When it's time to pass the baton, you realize there's no one behind you to take the baton and run.

You have to grit your teeth and keep running yourself.

Their keywords are struggle and transformation.

Of course, the social states of Singapore and Thailand are completely different.

We have already spent a whole video discussing Thailand.

Singapore's story, we will talk about later.

Second Gear: The Late Dividend Zone.

The class representatives here are Indonesia, Malaysia, and Vietnam.

They are also some of the countries getting a lot of attention in Southeast Asia.

Their situation can be summarized in one sentence: The people are not old yet, but they are aging faster than they are getting rich.

These three countries haven't completely lost their dividend, but they are in the second half of the race.

The working-age population is still growing, but the speed has noticeably slowed down, while the speed of aging has begun to accelerate.

The most typical example is Vietnam.

Vietnam only entered its golden population period in 2007.

Ideally, there should be plenty of time left, but because the fertility rate dropped too fiercely, experts predict its dividend window might suddenly close in 2040 or even earlier.

It's like you just sat down at a banquet, the dishes haven't all arrived, and the waiter comes to tell you, "Sir, we are closing in 15 minutes."

In other words, its golden period is being compressed.

Third Gear: The Early Dividend Zone.

The representative countries are the Philippines, Laos, and Cambodia.

They are the true youth club.

Although the Philippines' TFR is also dropping, it is still at 1.9.

The population structure is very young.

For them, the problem isn't a lack of workers, but a lack of work.

If enough jobs cannot be created, these surplus young people will become a huge social pressure.

These countries still possess a very young population structure, and relatively high fertility rates.

The dividend window is still wide open, and one could even say it's the peak season for dividends.

The working-age population is still growing rapidly.

However, how to create enough jobs to absorb the massive number of young people, especially the dual structure of the Philippines' economic growth— what challenges will it face in the future?

We will observe this together in upcoming videos, including the exchange rate special and country economic specials.

Different speeds bring completely different policy logic.

Precisely because the differences in demographic structures are so huge, the policy challenges for Southeast Asia in the coming decades will become extremely complicated.

This isn't a difficulty for just one country, but a structural challenge for the entire region.

Simply put, this leads to a very awkward situation: Southeast Asian countries can't copy each other's homework.

The Philippines needs to send people out.

Singapore needs to bring people in.

Vietnam is desperately trying to upgrade its industries.

Thailand is studying pension reform.

Everyone's joys and sorrows are not connected.

At the same time, the difficulty of regional integration makes the free flow of labor sensitive.

Theoretically, if people from young countries could freely work in aging countries, it would be a mutually beneficial mechanism.

But reality is far more complex than imagination.

Because each country's social structure, salary levels, cultural identity, and political considerations are different.

Letting young people from one country freely enter another country for employment— if there's a slight imbalance, local workers will be unhappy.

If you ask an aging country to import foreign labor, local politics also become sensitive.

This is why within Southeast Asia, the topic of free labor movement has always been treated very cautiously and is very difficult.

So the difference in population structures will make policy negotiations for the entire region in the coming decades even more complicated.

After discussing the divergence in population structures, we must face the thorniest and most easily overlooked challenge for Southeast Asia next.

It's not aging itself, but aging too fast.

There is a classic reminder in demographics: An aging population is not scary; what's scary is aging too fast while wealth accumulation can't keep up.

This is the so-called "getting old before getting rich".

Southeast Asia's problem isn't just being old, but that the speed is too fast to prepare for.

The UN has an indicator for aging speed: How many years does it take for a country to go from 7% of the population over 65 to 14%?

That is, moving from an "aging society" to an "aged society".

The speed of this ascent determines whether a country can withstand the demographic pressure.

And Southeast Asia's speed, to describe it in one sentence, is "historically accelerated".

Specifically, Thailand and Vietnam are expected to take only about 20 years, and Singapore and Malaysia only 24-25 years, to complete this transition.

France took 115 years.

The US took 69 years.

Even Japan, known for its rapid aging, took 25 years.

We can even say that Southeast Asia is completing an aging process in less than one generation that took Europe a century.

What does this mean?

As we just said, it means the country gets old before it has time to get rich.

This is a structural mismatch.

The social welfare system isn't built yet, high-value industrial chains haven't risen yet, and the Demographic Dividend is already over.

Thailand, which we mentioned in the last episode, when it crossed this threshold, its GDP per capita was only about $7,000.

How big is this problem?

When Japan reached the same level of aging, its GDP per capita was five times that of Thailand.

That is to say, Japan got rich and then got old, while Thailand started getting old just as it started up.

The pressures of these two paths are completely different.

The IMF also issued a very clear warning.

They compared Asian countries with Western countries regarding income levels when entering aging.

The conclusion is simple and direct: Asian incomes are generally lower, and they age faster.

Thailand and Vietnam are both on this list.

What does this mean?

It means they must bear heavy pension and medical system pressures before they are fully wealthy.

When the population accelerates aging, what happens to finances?

Taking Thailand as an example again, when the World Bank assessed its pension system, it found coverage was high, but the payout was low— too low to avoid poverty.

In other words, the pension system covered everyone, but didn't support anyone enough.

What will this lead to?

A large number of elderly people have to continue working, or rely on family support, rely on children for support.

And as family structures are also shrinking, this reliance becomes even more dangerous.

Another reality is that fertility rates are collapsing simultaneously.

In Southeast Asia, post-dividend countries and late-dividend countries have almost all fallen off the fertility cliff.

And it's a cliff-like drop in a short time, the kind that is irreversible.

The latest 2024 data clearly shows that the Total Fertility Rate (TFR) in many countries is already far below the replacement level of 2.1.

Specifically, Singapore's TFR dropped to 1.0.

More critically, officials announced that the resident TFR fell below 1.0 for the first time, dropping to a historic low of 0.97.

Thailand also dropped to around 1.0, which we discussed in detail in the last episode.

Vietnam and the Philippines fall at 2.0 and 1.9 respectively.

These two countries seem okay, but the trend is rapidly declining.

In other words, the entire Southeast Asia is moving simultaneously towards being a region with fewer children.

Not only fewer, but fewer and fewer.

Why is this happening?

One conclusion says this is a side effect of modernization.

The decline in fertility is not accidental, nor is it a problem of any single country.

It is actually a structural inevitability brought about by economic and social progress.

If we break it down, we will find that female education and employment have become the critical, most decisive factors.

A long-term data study by Lund University, spanning from 1990 to 2019, covering Southeast Asia and East Asia, gives a very clear conclusion: Female employment is the most influential factor leading to the decline in fertility rates.

Why? Because the higher the education and the better the job, the higher the opportunity cost of having children.

You can understand it as a calculation: When a woman's salary, career path, and social status are all rising, pregnancy and childbirth mean pausing her career, and the cost of this pause can be extremely high.

The logic of past family division of labor is being completely broken.

Women becoming the main economic force naturally means family sizes become smaller.

The latest report from the United Nations Population Fund also points out that economic insecurity is the core variable for the global decline in fertility rates.

This includes job instability, housing prices, and soaring costs of education and childcare.

Among the 14 countries surveyed, the anxiety level of young Thai families is one of the highest.

This is not hard to understand at all.

In a society where wages rise slowly, prices rise fast, and childcare is expensive, having children has become a luxury behavior.

They face very contradictory social expectations.

On one hand, society hopes they have a career; on the other hand, it requires them to be perfect mothers.

Such successful female images often appear on TV: managing large companies during the week, and being a good mother on the weekend.

Combining these two roles is like running a marathon while participating in a weightlifting competition.

It is simply impossible to do both easily.

Most Southeast Asian countries lack affordable, high-quality childcare services, especially for infants and toddlers under 3 years old.

Care resources are extremely scarce.

The result is that many families are forced to delay childbearing, and more women are forced to choose not to have children.

The low fertility crisis in Southeast Asia is not a result of failure.

On the contrary, to a large extent, it is the consequence of the second stage of past successful policies.

We discussed this in depth in the Thailand section of the last episode.

Think about it: promoting universal education back then, increasing female labor force participation, promoting industrialization, and increasing urbanization rates— these policies were originally meant to activate the demographic dividend.

But now, these successful policies have conversely lowered the fertility rate.

This is not a failure of policy, but a logical byproduct of modernization.

When discussing Singapore's fertility issue, the IMF made a very sharp remark: The decline in fertility, rather than being a failure of pro-natalist policies, is more the result of a social system that rewards professional achievement and penalizes lack of ambition— a result of being too successful.

In other words, the more successful you are, the lower the fertility rate might be.

And policymakers are facing a very awkward situation: They must solve a new problem created by their own past successes.

So, when fertility rates fall off a cliff and aging approaches rapidly, how exactly should post-dividend countries respond?

We already talked about Thailand in the last episode.

In this episode, let's look at Singapore.

Unlike Thailand, Singapore is the country in Southeast Asia with the strongest policy execution and the most sufficient economic resources.

Speaking of Singapore, if you ask who in all of Asia is most willing to spend money to encourage childbirth, the answer is definitely her.

For decades, Singapore has been rolling out "pro-natalist" policies, including baby bonuses, cash incentives, extra-long paid parental leave, high childcare subsidies, tax breaks, and housing priority.

The promotion of corporate "pro-family" policies— you could say whatever should be given has been given, whatever should be subsidized has been subsidized.

But what about the effect?

IMF research summarized the reality with a very calm sentence: The harder Singapore tries, the faster the fertility rate drops.

The TFR fell all the way from 1.41 in 2001 to 1.16 in 2018, and finally dropped below 1.0 in 2024, reaching a historic low of 0.97.

Yes, this is one of the lowest levels in the world.

Why are there fewer children despite more policies?

Because money alone cannot solve the real pressures of modern families.

Analysis by AWARE (Association of Women for Action and Research) Singapore shows that traditional "pro-natalist" policies have shifted to a more comprehensive "pro-family" strategy.

That is to say, the focus is no longer just encouraging you to give birth, but making you dare to give birth, able to give birth, without your life being completely disrupted.

Specific measures include extending government-paid paternity leave to 4 weeks starting from 2024, and launching the "Tripartite Guidelines on Flexible Work Arrangements".

That is, encouraging companies to let parents work flexibly.

The core of these measures is to create a family-friendly society, rather than simply letting mothers bear all the parenting pressure.

More importantly, and more critically and realistically, Singapore has a Plan B.

The report by AWARE Singapore puts it very bluntly: If TFR continues to decline, increasing immigration is a necessary measure.

The Singaporean government is actually already executing this Plan B, systematically introducing high-skilled immigrants, relaxing work visas in specific fields, supplementing the young workforce through immigration to maintain economic vitality and slow down the aging rate.

In other words, Singapore has accepted a fact: Children won't suddenly increase in number; fill the gap through immigration.

This is not a helpless move, but a prudent and pragmatic choice.

In my opinion, once the social state crosses a certain threshold, unless extreme circumstances occur, the decline in fertility is often irreversible.

Therefore, systematically and gradually introducing foreign population is Singapore's most realistic option.

Compared to Thailand, Singapore's advantages in economy and social resources give her more room to use Plan B to alleviate and balance the pressures brought by demographic issues.

The next part is what I spent the most time on, and also what I think is the reality we need to pay most attention to right now.

When the quantity dividend disappears, everyone counts on the "quality dividend".

That is, although there are fewer people, people have become stronger, so the economy can still do well.

But reality has given us a hard slap.

Whether it is an active or passive choice, we must see that whether we can grow in the future no longer depends on how much labor there is, but on the quality of labor.

Health skills willingness inheritance— these will become the new quality dividend.

But in this regard, what challenges is Southeast Asia facing?

Let's start with the youngest group: Youth.

Although countries like the Philippines are still in the early dividend stage, and theoretically should have the most abundant power, strongest vitality, and most opportunities, reality is quite the opposite.

The huge youth population is facing unprecedented employment difficulties.

The World Bank has warned that Asia is seeing a youth employment crisis.

The unemployment rate for youth aged 15-24 has already lit up a red light.

According to official statistics, one in every seven young people cannot find a job.

Of course, there are voices from society saying that this statistical result is still too gentle.

And even young people who find jobs often enter the low-wage, low-productivity informal service sector.

These jobs are unstable, lack skills, lack prospects, and lack social security.

For a young person in the golden age of labor force, it basically means being "thrown" outside the door by the times.

So this leads to another important observation dimension: NEET.

The full name of NEET is Not in Education, Employment or Training.

It refers to a group of young people who are no longer receiving education, not employed, and not participating in training.

This term first appeared in the UK, and was later widely used to refer to young groups who cannot or are unwilling to enter education, employment, or training states.

According to 2024 data from the International Labour Organization, the NEET rate in Southeast Asia and the Pacific has reached 16.3%.

In other words, one in every six young people is in an offline state completely detached from the system.

This is a long-term marginalization, which will bring serious social consequences.

We used to attribute unemployment to insufficient skills or insufficient jobs, but there is another huge and often overlooked factor: The structural change in willingness to work.

You might notice a phenomenon: Factories can't hire workers, office buildings can't hire clerks, but food delivery riders on the street and influencer hosts on social networks are overcrowded.

Behind this is a huge change in the values of a whole generation.

First is the survivor bias constructed by social media.

Modern media and social networks have constructed a glamorous illusion of success for Southeast Asian youth.

When TikTok and Instagram are full of influencer myths of getting rich overnight without suffering through seniority, the long path of apprenticeship and accumulating seniority in traditional manufacturing becomes unattractive in the eyes of young people, even appearing foolish.

Second is the psychological generational gap prioritizing comfort.

The previous generation often experienced poverty or turmoil.

Their logic was survival first.

Work is a necessary prerequisite; only with a rice bowl can you qualify to talk about preferences.

But contemporary Southeast Asian youth, especially the generation growing up in the urbanization process, have reversed logic: Psychological comfort first.

If a job's environment is depressing and boring, or the boss is too strict, some of them will not hesitate to quit without a backup.

Compared to a job with long-term accumulation but boredom, they tend to choose the gig economy which offers time freedom and seems easy.

Finally, the softening of family education.

With family sizes shrinking, meaning fewer children, this generation of children is often the center of the family.

This high-attention growth environment, while giving them confidence, also weakens their resilience to workplace pressure and setbacks.

This leads to a widespread situation of "not good enough for high posts, but too proud for low posts".

Insufficient skills for high-end jobs, but unwilling to lower themselves for low-end jobs.

This crisis of willingness is harder to solve than the crisis of skills, because it means even if there are jobs, young people are unwilling to fill them.

Speaking of insufficient skills for high-end jobs, this is another objective reality.

That is, the people trained by schools in many regions are completely different from the people companies need.

This might also be one of the reasons why some young people miss out on education— because what schools teach has no practical use.

This is a very dangerous structural mismatch.

Combined with young people's willingness to work, this explains why, on one hand, there is huge pressure from low national fertility rates, and on the other, a large number of young people can't find jobs.

Behind the torrent of the times' development is the huge gap where labor quality has not kept up with the rhythm.

The Asian Development Bank's report shows that the employment structure in all of Asia is undergoing drastic changes.

Automation, mechanization, AI, industrial software, etc., are rapidly replacing entry-level jobs in traditional manufacturing.

The number it gives is shocking: The labor required for car factories today is only 15% of what it was 25 years ago.

In other words, for the same assembly line, 10 people are enough now, whereas 60-70 were needed in the past.

At the same time, new jobs are migrating towards technology, AI, data, and digitization.

But the education system is running too slow.

Statistics show that Asian universities produce too many graduates in business, arts, and social sciences, but STEM (Science, Technology, Engineering, Mathematics), vocational skills, and ICT talents are severely insufficient.

Vietnam's research also confirms that her education system is trying hard to catch up with global demand, but students lacking English proficiency and technical skills are still very numerous.

In other words, the new economy wants software engineers, but schools are producing management graduates.

Supply and demand are completely misaligned.

What does this mean for the youth dividend?

We used to think that as long as there are many young people, the economy will grow automatically.

But now this logic has completely failed.

Today's reality is: Many youths does not equal a dividend.

If many youths have no skills, it equals a burden.

If many youths cannot enter the new economy, it equals social risk.

This is why today's Philippines and Indonesia still have large youth populations, but haven't seen a population-driven takeoff.

Because the economic structure has changed tracks, and they haven't changed their shoes yet.

Even more severe is that the traditional demographic dividend model has been eliminated by automation.

Manufacturing no longer needs thousands of ordinary skilled workers, while the digital economy needs high-skilled talents.

In the digital economy era, according to my observation, it has actually further accelerated the rhythm of talent replacement.

The layoffs from large US internet companies form a sharp contrast with the companies' performance on the Nasdaq.

So the window period for early dividend countries is not being closed by aging, but closed prematurely by skill mismatch.

This is a typical consequence of education not keeping up with the times.

When discussing macro population quality, we must focus on a special group: The large number of ethnic Chinese families living in Southeast Asia.

Ethnic Chinese occupy a pivotal position in Southeast Asia's economic map, controlling a large number of SMEs and even business giants.

But today, Chinese families are also facing a special challenge: Succession gap.

The previous generation of Chinese "first-generation entrepreneurs" relied on diligence and hardship, with the will of "enduring the hardest hardships to be the best among men", gained a foothold in local society and accumulated wealth.

To prevent their children from suffering like this again, they gave everything to send their children to the West or the best local international schools to receive top elite education.

The result?

These second and third generations who received Western elite education and have a broad international vision, after returning home, many are unwilling to take over the family hardware store, processing factory, or traditional trade wholesale business.

You have to know that the core of Western education is personal realization and professional manager thinking.

This has a generation gap with the patriarchal system and hard work of traditional family businesses.

In the eyes of some children, these businesses are too unsophisticated, too tiring, behind the times, or even undignified.

They also don't quite accept the management style of the older generation.

So they would rather be a senior financial analyst in an office building of a big company, than go back to manage that profitable but hard family business.

Actually, this situation is also very common in countries like Japan.

This leads to a reality that many Southeast Asian families have to face: The business is still there, but the successor is gone.

This is not just a problem of family wealth inheritance, but a loss of vitality in the micro cells of the Southeast Asian economy.

When the Chinese community, which has the most entrepreneurial spirit and tradition of accumulation, starts to face a lack of successors, the economic resilience of this region is actually being weakened.

Having discussed youth difficulties, family inheritance, and skill mismatch, let's look at the quality of the population itself.

That is the quality of the education system, students' basic abilities, health status, and the overall level of development.

These indicators determine whether Southeast Asia's future workforce can adapt to the new economy, and how to survive under global competition in AI and digitization.

And on this point, Southeast Asia's performance can be said to have prominent highlights but overall divergence.

In terms of education, besides Singapore, Vietnam definitely deserves to be singled out.

Some even say that in education, Vietnam is the "top achiever" in Southeast Asia.

Having discussed youth difficulties, family inheritance, and skills mismatch, let's look at the quality of the population itself.

That is, the quality of the education system, students' basic capabilities and health status, and the overall level of development.

These indicators determine whether Southeast Asia's future workforce can actually adapt to the new economy, and how they can survive under global competition in AI and digitization.

And on this point, Southeast Asia's performance can be said to have prominent highlights but is overall divergent.

In terms of education, apart from Singapore, Vietnam definitely deserves to be singled out for mention.

Some even say that in the field of education, Vietnam is the "ultimate overachiever" of Southeast Asia.

According to the preliminary results of the 2024 Southeast Asia Primary Learning Metrics (SEA-PLM), Vietnamese primary students in Math, Reading, and Writing—these three core abilities— are once again in the top tier of all participating countries.

Participating countries, besides Vietnam, included Cambodia, Timor-Leste, Laos, Myanmar, Malaysia, and the Philippines.

Not only did they perform excellently this time, but in 2019, Vietnamese students ranked first in all three subjects, significantly leading the regional average.

This is completely consistent with Vietnam's long-term stellar performance in PISA (Programme for International Student Assessment).

PISA tests 15-year-old students, assessing problem-solving, critical thinking, and reading comprehension— the most important capabilities in the new economic era.

Vietnam's performance ranks among the top globally almost every time.

In the 2022 PISA test, Vietnamese students ranked second among Southeast Asian countries, only behind Singapore.

So we can say this: Vietnam's education is the hidden engine of future competitiveness for the entire Southeast Asia.

But Vietnam is the exception, not the norm in Southeast Asia.

In the PISA 2022 assessment, the scores of Indonesia, the Philippines, and Thailand were generally far below the average of the 38 OECD member countries.

This illustrates a problem: The basic education systems in these countries are still severely deficient in cultivating critical thinking, digital literacy, and real-world problem-solving skills.

Students lacking these abilities will find it difficult to secure high-quality jobs in the era of automation and digitization.

Looking more macroscopically, the UNDP's Human Development Index (HDI) provides a comprehensive perspective.

Education, health, and standard of living— these three combined view the overall quality of a country's population.

The latest data shows that the HDI in the Asia-Pacific region fully recovered in 2022, exceeding pre-pandemic levels.

This means Southeast Asia is not completely stagnant; there is continued progress in population health and basic education.

But we must admit that the internal gap is huge.

Vietnam is moving up fast, while some countries are still hovering at low levels.

So, facing these combined challenges, what exactly are governments doing?

Let's look at two typical countries: Vietnam and Malaysia.

To summarize in one sentence: Vietnam is using the digital economy to force education reform.

Vietnam knows very well that whether its late-stage dividend can turn into economic growth depends on whether it can solve the skills mismatch.

So, Vietnam launched a very deep education reform.

The origin of the core policy comes from Resolution No. 29-NQ/TW issued in 2013.

This resolution requires the Vietnamese education system to shift from traditional rote teaching comprehensively to these aspects: Learner-centeredness, emphasis on practice and problem-solving, digital integration, and comprehensively promoting STEM.

This is not a slow adjustment, but a systemic engine replacement.

To this end, over the past decade or so, Vietnam's continuous investment in education accounted for 20% of its government budget.

This is a considerably high proportion.

And this reform does not exist in isolation; it directly serves Vietnam's national digital transformation plan.

The goal is for the digital economy to account for 30% of GDP by 2030, while cultivating 1 million digital professionals.

Vietnam is penetrating STEM education into all stages of education, pushing schools to add coding, digital skills, and problem-solving training to the core curriculum.

You could say this is the most direct policy response to the STEM talent shortage mentioned in data reports.

What is Vietnam doing?

It is paving the tracks for future industrial chains in advance.

Let's look at Malaysia again.

Malaysia is also a late-dividend country, but she is taking a different path: Heavy reliance on foreign labor.

This is another "20%" story.

Especially in agriculture, construction, manufacturing, and service industries, foreign labor accounts for about 20% of the total workforce.

However, in 2024, Malaysia showed two seemingly contradictory policy signals.

First, sudden tightening.

In March 2024, the government announced it would temporarily stop approving the entry of new foreign workers.

The reason is realistic: Domestic criticism of reliance on foreign labor is heating up, and the government must respond to political sentiment.

Then, immediate opening.

Just a few months later, starting from July 2024, the Social Security Organization (PERKESO) announced that disability and survivor pensions would cover all foreign workers.

What does this mean?

It means foreign workers are no longer seen as temporary, replaceable labor, but as necessary economic infrastructure.

The International Labour Organization supports this policy, pointing out that since Malaysia's own aging is accelerating, including foreign workers in the social security system not only maintains a stable and productive workforce, but from an actuarial perspective, it is also profitable for the social security fund.

In other words, Malaysia is likely building a dual-track labor model.

On one hand, tightening on low-skilled new foreign labor entrants; on the other hand, the policy goal for foreign workers who are already irreplaceable domestically is to retain and stabilize them.

Politically, it needs to appease public opinion; economically, it must maintain labor supply.

This is Malaysia's reality at this moment.

Having discussed the structural differences within Southeast Asia, let's pull the camera back a bit.

If we place Southeast Asia into the Asian demographic map, where is its position?

And what unique challenges does it face?

Let's look at it from two angles: East Asia and South Asia.

Southeast Asia and East Asian countries like China, Japan, and Korea, have one thing in common in demographic structure: Aging fast, birthing few.

Both sides have experienced unprecedented fertility decline and rapid aging.

However, especially between them and Japan, there is a fateful difference: Money.

Japan got old after getting rich.

Some Southeast Asian countries, except Singapore, got old before they got rich.

The reason Japan and Korea can bear deep aging is because they are already high-income countries.

Social security systems are mature, and public finances are ample.

But Thailand and Vietnam in Southeast Asia, including China in East Asia, have not yet reached this stage.

While still climbing the industrial chain, they hit the "demographic wall" prematurely.

Moreover, due to realistic issues like economic foundation and wealth distribution, it might be very difficult to replicate some of Japan's experiences in some Southeast Asian countries.

For example, the Long-Term Care (LTC) insurance system and social mechanisms like "Active Aging" that improve the quality of life for the elderly.

So Japan's policies cannot be copied blindly.

Economic foundations, health systems, and fiscal environments are completely different.

But Japan's framework at least tells Southeast Asia that deep aging is not the end, but it requires consensus from the whole society to face it.

Let's look at South Asia.

If the dividend windows for most Southeast Asian countries are closing, then South Asia, especially India, is at the peak of its dividend.

India alone had 234 million youth aged 15-24 in 2010.

The entire working-age population of South Asia is still expanding rapidly, almost contrary to the trend in other parts of the world.

However, the challenge behind this youth wave is completely different from Southeast Asia.

The similarity between the two is that both struggle with the challenge of creating enough good jobs.

Whether Southeast Asia or South Asia, everyone faces a common problem: How to create enough high-quality job opportunities to absorb the massive young labor force.

This is the commonality.

The biggest difference, and also South Asia's core problem, is not workforce skills, but the exclusion of women.

This is a very important difference.

According to the ILO 2024 report, South Asia's youth NEET rate is 26.4%, far higher than Southeast Asia's 16.3%.

More critically, South Asia's NEET crisis comes almost entirely from women.

The NEET rate for young women in South Asia is as high as 42.4%, while for men it is only 11.5%.

The gender gap is as high as 31 percentage points, the highest in the world.

What does this mean?

Southeast Asia's problem is that women don't give birth due to high opportunity costs.

This belongs to the counterforce after development.

But South Asia's problem is that they don't even have the chance to enter education and the labor market.

This belongs to structural obstacles before successful development.

Therefore, South Asia's demographic dividend cannot be activated, not because they aren't giving birth, but because they aren't letting women participate.

Perhaps for South Asia, the urgent task is to do what Southeast Asia did 30 years ago: Invest in education and promote women entering the labor market.

Finally, let's look at the opportunities and risks in the coming decades.

Let's push our vision forward to 2030 to 2050.

What will Southeast Asia truly encounter in the future decades?

First, the challenges.

Southeast Asia will face two structural challenges.

First is the bottleneck of moving towards high income.

For Southeast Asian countries to move from current levels to high income, they need systemic industrial upgrading, innovation ecosystems, and a high-quality workforce.

But these are precisely being squeezed by demographic changes.

Simply put: On one side, the workforce decreases and the demographic dividend is gone; on the other side, pension spending explodes, leaving no money for R&D.

It is very easy to get stuck in the middle, unable to go up or down.

Therefore, demographic speed is making industrial upgrading harder, but also more necessary.

Second is the superimposed pressure of urbanization and climate.

Southeast Asia's megacities have to face aging, and also extreme weather.

What we see is that countries are facing a superimposed risk: Including population aging, informal housing and inequality, climate crisis, and urban overload.

Especially, the elderly and low-income families living in urban poverty zones will become the most vulnerable group with nowhere to escape under this multiple crisis.

But the future is not just pressure.

From media reports, the entire Southeast Asia is welcoming a growth engine with real strategic significance: The Digital Economy.

According to predictions by Google, Temasek, and Bain, the total scale of the digital economy in Southeast Asian countries will break $300 billion by 2025.

E-commerce and digital finance are the strongest drivers.

But in my view, trying to apply one set of digital economy policies to the whole region— this logic does not hold in Southeast Asia.

For digitization, we need to break it down.

For resource-based countries, like Indonesia, Laos, and Malaysia, the core of digitization is not e-commerce or apps, but industrial internet and process control.

Digitization here serves the efficiency improvement of heavy assets.

For manufacturing-based countries, like Vietnam and Thailand, the core of digitization is Industry 4.0 and automation.

For service-based and capital-based countries, like Singapore and the Philippines, the core of digitization is the platform economy and knowledge services.

For example, Singapore in the Fintech field, and the Philippines' digital upgrade in the BPO industry.

For Southeast Asian countries, this should not be a loose trade alliance, but a tightly meshed ecosystem.

We need to redefine their roles based on each country's position in the demographic cycle and industrial endowment, and establish effective transmission mechanisms. The roles Southeast Asian countries can play can be the following four types.

First is The Brain.

That is, the capital and strategic hub.

This is Singapore.

It is no longer just a trading port, but the regional capital allocation center and offshore innovation lab.

Second is The Arms. That is, the advanced manufacturing and automation base.

Vietnam and Thailand should be the main force.

Its positioning is the core processing factory of the global supply chain.

Then there is The Backbone.

That is, the cornerstone of energy, resources, and food security.

Indonesia, Malaysia, and Laos will be the main force among them.

Its positioning is the regional life support system and raw material depot.

Finally, The Circulatory System (Blood Transfusion System).

That is, service support and flexible labor.

The Philippines and Cambodia have great potential in this area.

Its positioning is the region's soft power support and virtual labor pool.

To make this organism work, three "meridians" must be opened.

First is the energy internet.

Second is the mutual recognition of skills.

Third is the ability to offer combined quotations to the US, China, Japan, and EU countries.

We have many opportunities in the future to observe and dismantle these.

Southeast Asia's future lies not in finding a magic pill that fits everywhere, but in acknowledging differences and utilizing differences.

The single-core drive of demographic dividend in the Asian Miracle era has ended.

Replacing it is a multi-core driven complex system.

In this system, the characteristics and capabilities of different countries need to mesh precisely like gears.

We must clearly realize that the divergence in population structure is not a signal of disintegration, but an opportunity for division of labor.

Resource-based countries do not need forced digitization.

Aging countries cannot be forcibly rejuvenated.

By building the aforementioned organism transmission mechanisms, allowing energy, capital, technology, and manpower to flow within the region at optimal efficiency, Southeast Asia can form a super economy with self-repair capabilities and strong resilience in the turbulent waves of the global economy.

We spent the time of two videos observing the demographic structural conditions of major Southeast Asian countries.

Thank you for your company.

Finally, as usual, I leave you with a song.

At this moment, what I want to say most is: Demographics will change an era, but it is always people who determine the direction of the era.

See you in the next episode.