Mukul G. Asher

The Future of Retirement Protection in Southeast Asia

This paper analyses the formal retirement protection systems in five economically successful, rapidly industrializing, and globalized economies of Southeast Asia: Indonesia, Malaysia, the Philippines, Singapore, and Thailand. It finds that while there are major differences in the formal retirement protection systems of the five countries in terms of coverage; contribution rates; scope and nature of preretirement schemes; investment patterns, practices and performance; replacement rates; administrative and compliance efficiency; and regulatory structures, the main common feature (with the exception of the Philippines) is aversion to social insurance and predominant reliance on individual provision through publicly mandated and managed provident funds. While these systems do minimize the fiscal burden on the State and thereby help maintain international competitiveness, they provide socially inadequate levels of retirement protection and are weak in ensuring efficiency of the saving-investment process. Moreover, several design and institutional features prevent full realization of many of the advantages of the provident funds found in these countries. They may, therefore, benefit by following the worldwide pension reform debate more closely, particularly concerning design and institutional and regulatory structures for mandatory defined-contribution schemes.

Welfare capitalism in Southeast Asia : social security, health and education policies

List of Tables Acknowledgements List of Abbreviations Introduction Economic Conditions in Southeast Asia Social Security M.G.Asher Health Education The Political Economy of Social Policies Conclusion: Social Welfare Policies in Southeast Asia and the Economic Crisis References Index

Singapore's Policy Responses to Aging, Inequality and Poverty: An Assessment

Singapore represents an instructive case study in responding to rapid aging, growing inequalities, and significant relative poverty. Unlike other high-income Asian countries, it has relied on single-tier mandatory savings to finance retirement, housing, and to a lesser extent, health care. To address the low fertility rates, it has permitted the share of the non-citizen population to triple between 1990 and 2005 to nearly 30 per cent. This is subtly altering Singapores socio-political dynamics, while assisting in sustaining growth and competitiveness. The paper argues that Singapore has the fiscal, institutional, and organizational capacities for a modern multi-tier social security system. Singapore is, however, determined to continue with current inadequate and inequitable arrangements, requiring individuals and their families to bear disproportionate risks in financing retirement, health care, and short-term income support. This reflects conscious policy choices arising from a Darwinist vision of society, and the need for socio-political control.

Health Financing in Singapore: A Case for Systemic Reforms

This paper assesses Singapores healthcare financing arrangements in terms of their efficiency, fairness, and adequacy. Singapore represents an interesting case study because it is perhaps the only high-income, rapidly ageing country to rely on mandatory savings to finance healthcare, thus eschewing extensive risk-pooling arrangements, generally regarded as efficient and equitable. The paper argues that parametric reforms, i.e. relatively minor changes in the parameters of current schemes which preserve the existing philosophy and system design, will not be sufficient to meet healthcare financing objectives. Systemic reforms, which will bring Singapore into the mainstream of health financing arrangements found in the OECD countries, are urgently needed. Their design and timing should be based on good quality, timely and relevant data, and an environment conducive to vigorous debate.

India’s Rising Role in Asia

This paper strongly suggests that India has been far more intricately integrated with the rest of Asia than has commonly been perceived or acknowledged. This is particularly the case if overall value chain division is defined to include research and development, physical production, distribution, customer servicing and feedback. Over-concentration on gross merchandise trade flows in the conventional literature appears to have distorted the analysis of economic integration. This integration has been primarily market and private sector driven. The role of Indian professionals, skilled and unskilled workers in contributing to Asia’s economic growth and dynamism also appears to have been underemphasized. It is essential that the Indian establishment, including the media, contribute constructively and purposely to improving perceptions about India in the rest of Asia, and to promote India’s strategic interests.

Micro-Pensions in India: Issues and Challenges

This article aims to fill a gap in the social security literature on India by examining the role of micro-pensions. The analysis suggests that because of the heterogeneity of the target population, micro-pension products with microfinance institutions (MFIs) as the main, but not only sponsors should be voluntary and portable and permit experimentation in their design and in the delivery of services. Accordingly, decentralized micro-pension schemes that operate within an appropriate regulatory framework and according to sound governance practices are deemed more fitting for the Indian context than centralized schemes with limited flexibility. The article discusses two case studies of recently-initiated micro-pension schemes in India, which reveal the need for rigorous analytical research on the micro-pension sector, particularly concerning the structuring of pay-out options and innovative delivery mechanisms. The article concludes that micro-pensions have the potential to be one of the most useful components in Indias multi-tiered social security system, and should be encouraged.

Pension Reform in India

India initiated ‘open-society, open-economy’ paradigm in 1991. Since then, its macroeconomic performance has been fairly satisfactory. Positive developments have occurred in real GDP growth, saving and investment to GDP ratios, international trade, and foreign exchange reserves (Table 5.1).

Coordinating Healthcare and Pension Policies: An Exploratory Study

Rapid ageing of the population globally represents an unprecedented historical trend. As pension and healthcare costs are positively correlated with rising incomes, ageing, urbanization, and a shift from communicable to life-style diseases, managing these costs is a major challenge. There are many linkages between healthcare and pension arrangements—in terms of costs, exposure to risks, and as they jointly impact on crucial policy decisions. This paper discusses the rationale for coordination between various programs to better manage the cost of ageing. The current difficult macroeconomic environment, including fiscal stringency conditions, strengthens the case for such coordination.

Southeast Asia's Social Security Systems: Need for a System-wide Perspective and Professionalism

This paper provides an assessment of the social security arrangements in Southeast Asian countries, and suggests broad directions for reform. Noting the absence of functioning multitier social security systems in these countries, the analysis highlights wide variations in various characteristics of systems in Southeast Asia. The paper underscores the need to enhance professionalism in the performance of core functions of the provident and pension fund organizations in these countries; and to take a system-wide perspective. It recommends constituting a Provident and Pension Fund Authority (PPFA) in each of the Southeast Asian countries to undertake the above tasks.

Reforming governance and regulation of urban cooperative banks in India

Purpose - To argue a case for a paradigm shift in the way urban cooperative banks (UCBs) are managed, governed, and regulated in India to enable them to enhance their contributions to achieving greater degree of financial inclusion, and more broad-based growth. Design/methodology/approach - The paper first surveys the quantitative importance of the UCBs in India, and their key performance indicators. Various official reports by the countrys Central Bank, the Reserve Bank of India (RBI), and other relevant organizations are used extensively. The paper then identifies key areas of reforms, centering primarily on the current business model, governance and regulation practices, and capital adequacy. It then argues for a change in a paradigm shift by the UCBs, and how better governance and regulatory structure can assist this shift. Findings - The paper finds that if the UCBs are to remain relevant and play a significant developmental role in India, they will require same quality of governance and regulation as well as professionalism and modernization as the mainstream commercial banks. The governance and regulatory structures need to be brought in conformity with Indias current and prospective economic structure; and relevant laws modernized. This requires a paradigm shift in the role of UCBs. Research limitations/implications - The research has been based primarily on secondary sources, particularly various reports by the RBI, the countrys Central Bank. Better understanding of the reasons for differences between well-governed and financially sound UCBs on one hand, and those that are not, requires focused interviews and more searching examination of the operating environment and financial statements of a sample of the UCBs. This could be the next stage of research. Originality/value - This paper represents a part of public debate on ways of integrating the UCBs into the mainstream banking sector. This is an important public policy issue as even though the UCBs represent relatively small proportion of the total banking assets, they still represent a systemic risk to Indias financial system, and without reforming them, broad-based economic growth would be difficult to achieve.