Older, sicker population could spell peril for economy

It is estimated that in the next 28 years about half of Barbados’ population will be over the age of 65, and one development management specialist is warning that this could be devastating for the economy and its pension scheme. Also worrying she said, is the fact that non communicable diseases could potentially remove people from among the workforce earlier than anticipated.

Diane Quarless, Director at the Economic Commission for Latin America and the Caribbean (ECLAC), said it was critical for government to put measures in place to ensure its national insurance scheme will be able to meet the demands at that time, as contributions are expected to dip.

Quarless is also urging Barbados and other regional economies to pay closer attention to the health of their population if they are requiring them to retire at a later age.

“If we are talking about extending working life – and I think Barbados is at the highest at about age 67, and more and more of the countries are moving up from 60, so everybody is somewhere between 60 and 67 – but if that is to happen you need to have a healthy population in order for them to work longer,” she explained.

Quarless was one of three panelists speaking on Thursday during the Caribbean Economic Forum, hosted by the Central Bank of Barbados on Solving the Ageing Population Crisis in the Caribbean.

“We at ECLAC estimate that by 2050 the percentage of the Jamaican population over 65 is going to be about 39 per cent, for Barbados it is going to be 50 per cent, St Lucia 44 per cent, Trinidad 36 per cent, Bahamas 37 per cent and Belize is going to be the lowest at 17 per cent,” she said.

“In 2050, just over 25 years from now, we are going to find that almost at least a third in [some countries] and in the case of Barbados a half of the population will be over 65. This is a very, very serious situation. This is what I describe as a crisis now,” she said.

“When we get to 2050 and we have done nothing to prepare for that overwhelming dependency ratio that we will meet then we have a very, very serious problem on our hands,” she stressed.

She said this called for a collaborative effort from government and the private sector to ensure that systems are put in place to meet future demands.

“We need to be looking not just at how we address the issue from the government perspective, but it needs the involvement of personal investment. People should be planning for their retirement. Find ways in which caring for the elder becomes a going concern, a productive enterprise,” she proposed.

“Engage the diaspora in investing in the care of the elderly. We are going to need to plan because in 25 years we are going to be staring at a very serious situation,” she added.

The Barbados population, which is estimated at just over 288,000, is said to be one of the fastest aging societies globally with about 30 per cent of the population already at age 55 or older.

Quarless also expressed concern over the high levels of non-communicable diseases (NCDs) affecting the Caribbean population.

In the case of Barbados, World Health Organisation (WHO) data suggests that about 83 per cent of deaths up to 2019 were as a result of NCDs such as cancer, cardiovascular diseases, diabetes and chronic respiratory diseases. The situation facing other Caribbean states is similar.

“These have dramatically impacted the health of our working population, and increasingly, as persons move towards older age the percentage of the population impacted by NCDS increases,” Quarless pointed out.

Quarless said there was need for investment in NCD management so that people can work healthier for longer, so that the government doesn’t have to be moving in to provide them with support earlier, and then we need to be strengthening the involvement of youth [in the labour force]”.

She did not agree with a reduction in pension as a measure to correct the situation, saying this was “politically unsafe and therefore we need to be looking at other ways to expand non-contributory schemes”.

The panelists, which also included Derek Osborne, Partner and Senior Actuary at LifeWorks in the Bahamas and Professor Emeritus Kark Theodore, Senior Consultant Advisor at the Centre for Health Economics at the UWI Trinidad, agreed that Governments should be more creative in capturing more people in the informal sector into the social security contribution net.

They also agreed on the need for Governments to be more proactive with innovative and integrated strategies that would address all challenges that impact pension schemes and the welfare of the elderly. (MM)