Ageing populations will hit Asia hard, but younger, poorer countries like Cambodia will buck the trend for several decades, the World Bank found in a massive demographic study released yesterday.

While working-age populations will shrink 10 per cent in countries like China, Thailand and Japan by 2040, Cambodia will see a 2-3 per cent boost in its prime working-age population.

World Bank economists said Cambodia and fellow young nations like the Philippines must use this time to improve skills training and employment levels or be stuck getting “older but not richer” in the future.

“Make sure, in this relatively early period, the labour force is not only growing in numbers but also quality, because that is the other big lesson of East Asia – ensure you consistently build human capital,” Sudhir Shetty, chief economist for the East Asia and Pacific Region of the World Bank, said during a teleconference call at the report’s release in Phnom Penh.

Speaking from Beijing, Shetty said having a higher percentage of young people, if they’re skilled, will give Cambodia the opportunity to perform “demographic arbitrage”, giving it an advantage.

“Around one-third of the high per capita income growth in East Asia from 1960 to the 1990s can be attributed to the demographic dividend,” the bank wrote in its report.

Philip O’Keefe, the principal author of the report, said that if Cambodian workers go abroad at a high rate, it will not strongly affect labour availability back home and downplayed the likelihood of a “brain drain” affecting Cambodia in the future.

According to the World Bank, Cambodia’s proportion of 20-64-year-olds with a secondary or higher education will rise from 16.2 per cent in 1990 to 52.7 per cent in 2040.

The proportion of such people with tertiary or higher education will climb from 0.5 per cent to 4.3 per cent. These are some of the lowest numbers in the region, behind even Laos and Myanmar.

But Ros Salin, a Ministry of Education spokesman, said this is too low an estimate, given that students are already learning that higher education and skill training are essential to their lives.

“Nowadays, people who want to join the labour market understand that they have to finish grade 12,” he said. “If they fail, they try to find other training or education.”

Salin said Education Minister Hang Chuon Naron has eight reforms planned, which include better school budgeting, adding more math, science and engineering to the curriculum, and better teacher training.

Chin Chanveasna, director of NGO Education Partnership, praised the government for strongly focusing on education reform in the past two years.

However, he added that current higher education curricula in the Kingdom are not as good as those of neighbouring countries.

The World Bank also warned younger countries’ governments against making pension promises their countries won’t be able to keep in the future.

Some of the richer East Asian countries might have to spend 10 to 15 per cent of their GDP just covering pension obligations in future decades.

Currently, Cambodia has “barely any” spending on the elderly. Close to 90 per cent of people over 65 rely on their own labour for income, along with some private transfers from families and other income.