Minister of Education Ronald Jones isn’t the only Government official worried about the island’s declining birth rate.
Addressing the 76th annual Barbados Workers’ Union (BWU) delegates’ conference at the weekend, Director of the National Insurance Scheme (NIS) Ian Carrington warned that Barbadians needed to have more children as a means of safeguarding the island’s social security scheme.
He explained that the island currently has an “aged” population and that the ratio of young workers to those of pensionable age had moved from seven to one when the Scheme was first started 50 years ago, to three to one in 2017.
“That is going to create problems,” he warned, explaining that “we have been very successful as a country in the area of family planning and it is demonstrated in the fact that the birth rate in 1967 was essentially something in the range of seven, [but] to date the birth rate is 1.65.
“All that says is that a female of child bearing age in Barbados today is expected to bear 1.65 children.
“The point is we are not as a country producing enough children to maintain the population and what is required to maintain the population is a birthrate of no less than 2.1 because there is always going to be some child that dies at childbirth,” the NIS boss warned.
According to the last census released by the Barbados Statistical Service in 2013, the island’s total population stood at 277,821.
And as far back as 2014, Jones has been sounding the warning that Barbadian women needed to have more children, to counter the problem of falling birth rates.
Last year, Minister of Social Care Steve Blackett also joined the Jones chorus of concern, while announcing that by 2025, citizens over the age of 60 would make up 20.4 per cent of the island’s population.
While echoing these concerns, Carrington underscored the recent decline in the country’s labour force.
“I can tell you that based on my knowledge that the current workforce in Barbados is on average about 123,000 persons. In 2014 when our last actuarial report was done, and that was on the heels of retrenchment and so forth, that dipped to about 114,000 persons . . . . It means contribution income going to go down,” the NIS boss said.
He told union delegates, including former BWU General Secretary Sir Roy Trotman, now consultant to the current General Secretary Toni Moore, that NIS reserves currently stood at $5 billion, with the majority of funds having been invested. Carrington therefore suggested the fund was not in danger for at least another eight years, even if there were no streams of income coming in from contribution and investment income.
“Seventy-five per cent of this is invested in Government instruments. It is not ideal and I’m not going to get here and say that it is ideal. But I would want somebody to advise me where do I find the investment opportunities to invest this five billion dollars, along the ideal investment path when [it] is about 45 per cent of our GDP?
“The other options you have is to invest some of it aboard,” the NIS director said. However, he pointed out that this may not be possible given the current domestic problems with foreign exchange.
“If I say I want to invest a quarter of this [abroad], which is $1.25 billion, the Governor of the Central Bank will have to find this in foreign exchange for us to be able [to do so].
“Is that possible today? No,” Carrington stated.
The other alternatives which the NIS director said were available for investment were in the area of local investment, namely through Government instruments, real estate or by loaning commercial institutions money or equity.
However, he lamented that “when you look at the local stock exchange, there are not many options there for the NIS since with all the mergers and acquisitions, the options make for slim picking.
“At its height, the Barbados Stock [Exchange] had listed 24 public companies. What you have seen over the last several years as it relates to the [exchange] has been these mergers and acquisitions and as soon as the companies, merge, they delist.
“Right now, you have 16 or 19 companies listed. We could buy all 19, but is social security in the business of running public companies? No. So, we have set a threshold of no more than ten per cent in any business because we don’t want to run your business,” Carrington told the gathering.
“We want to make an investment and get a return by way of dividend and capital appreciation for our investment. But we only have 16 companies listed on the stock exchange,” he stressed.
In terms of investments in real estate, he questioned: “When I go and I put a quarter of this $5 billion in real estate – brick and mortar – and I need cash and you don’t have a rental stream equivalent so that I could pay, am I going to take down some bricks and mortar and pay?”