Wednesday, October 04, 2006

Taiwan Lures Japanese Seniors

Old Taiwan hand Lawrence Eyton pens on the plan to get Japanese retirees to come to Taiwan.
Japanese baby boomers are facing a cash crunch, but Taiwan is here to help.

Just do the math. The end of World War II saw a baby boom in Japan. With the nation's standard retirement age set at 60, the boomers are about to stop working. Indeed between 2007 and 2009 it is estimated that 7 million Japanese will retire. But to some, their new-found leisure poses a financial nightmare, for the simple reason that their pensions simply will not cover Japan's high cost of living. In 2004, research by the Japanese Life Insurance Cultural Center found that the average pension for a Japanese retiree couple would be ?10,000 (US$1,850) a month, while the average cost of living for such a couple in Tokyo is ?70,000 (US$3,250). Given that Japanese men have a life expectancy of 79 and women 85, the ?60,000 a month shortfall needs to be backed by substantial savings--a government report suggests ?0 million--so substantial in fact as to be more than three times the average held by most retirees. Many baby boomers are, therefore, facing a life of financial insecurity, even impoverishment.

Here Taiwan hopes to be of service. ?10,000 converts to almost NT$60,000 and in a country with an average salary of NT$36,000 a month, this can provide a comfortable lifestyle. Many other countries in the region, especially Malaysia and Thailand, have long marketed themselves as low-expense retirement destinations. Now with those 7 million Japanese retirees reaping pension payouts of ?0 trillion in the next three years, Taiwan is seeking a slice of a potentially lucrative market.

Of course, having thousands of Japanese retirees may also increase the chance of Japan intervening on Taiwan's behalf in conflicts with China...

3 comments:

Jason said...

You mean... use 'em as human shields? :)
Tora! Tora! Tora!

Ckai Doong said...

In the event of that possible war with China, those folks who do decide to retire in Taiwan - already old and weak - can serve a strategic part of the war....Jason already insinuated that idea.

Anonymous said...

Hi. Just alittle aside...
Ian Bremmer, president of Eurasia Group, a political risk consulting firm, was on the Daily Show on Wednesday, Oct. 4. In the beginning of his interview, he says, "[The United States] had an election in the year 2000 considered to be fallacious by a majority of the population...[there] wasn't social discontent, didn't change the credit rating, didn't have problems with foreign direct investment...same thing happens in Ukraine, same thing happens in Taiwan, country's gonna fall apart..." I don't think it's fair to compare Taiwan to Ukraine. I think Taiwan's economy, although not the same as it was during the heydays of the 80-90s, has stood up quite well since 2001. I believe that the fragility of Taiwan's political situation primarily lies in its relations with China, not in its domestic politics, and that foreign investor confidence (or lack thereof) reflect this. Just by looking up Taiwan's and Ukraine's political histories and economic data, one can see that Taiwan and Ukraine are on a totally different playing field. Maybe I like Taiwan too much. What do you guys think of Bremmer's comparison?