BANGKOK’S STREETS THROB with life and industry. From well-heeled businessmen to impecunious pedlars, everyone is busy with the serious business of earning a crust. The fortunate and the wise are also busy stashing away cash for the future.
Thais, like the citizens of so many other Asian countries, are already keen savers. But with the demographic shadows lengthening over a country that no longer commands the automatic right to grow its way to graceful retirement, Thailand needs to save even more and in earnest. Its key pension statistics make sobering reading.
According to JPMorgan Securities, Thailand’s age dependency ratio, the proportion of retired to working age population, is set to double in the next two decades to 34%, and the kingdom’s coverage ratio, the proportion of the workforce covered by pension schemes, is 28%, among the lowest in the region. Thais lucky enough to have a pension at all face the grim prospect of significant underfunding: replacement ratios, the level of post-retirement benefits to pre-retirement income, are the lowest in Asia at just 7%. The World Bank estimates that an adequate wage replacement ratio is at least 60%.