ISSN: 1391 - 0531
Sunday, July 22, 2007
Vol. 42 - No 08
Columns - The Sunday Times Economic Analysis  

Taking advantage of the demographic bonus

By the Economist

We pointed out the emerging problems of ageing based on the latest projections of population in the July 1 column – Dr. Indralal de Silva’s study – “Beyond Twenty Million: Projecting the Population of Sri Lanka 2001-2081”, published by the Institute of Policy Studies (IPS). These projections indicate a rapid ageing of the country’s population especially after the next decade. The ageing of population is fast becoming the trend even in countries such as India that had a high population increase. It has of course been a phenomenon in developed countries such as the US and Canada and many of the European countries. However the rapidity of the ageing process in Sri Lanka is unprecedented in world history. The burdens of ageing could be very heavy for a poor country.

Developed countries have adopted reforms in pension and retirement schemes, increased the age of retirement (some provinces in Canada even doing away with a mandatory retirement age) and have expanded institutionalised elderly care. Medical services have placed an increasing emphasis on the illnesses associated with the elderly with geriatrics being of special importance in health care. The pertinent issue is whether the country is sufficiently aware of the emerging problems and the need to put in place new initiatives to deal with the problems of ageing.

An excellent example of awareness of this problem comes from the little island state of Malta where the Prime Minister has stated the issues clearly and stressed the need for action. Addressing a conference on ageing, the Prime Minister, Lawrence Gonzi said that a large majority of the world’s nations are experiencing a demographic explosion of their senior populations. He pointed out that by the middle of the century, as much as 22 per cent of the global population would be made up of people aged 60 years or over, up from today’s 11 per cent. In fact Sri Lanka’s aged population by this time would be much higher.

He made the significant observation of relevance to Sri Lanka that “This exponential increase is a clear sign that the old methods of senior care will not do and that change and innovation are needed. More so, although each country must tackle the problems posed by the ageing of its population largely on its own, it must first strive to learn from the experiences that other countries have had in implementing novel systems of elderly care and to take on board whatever has been successful and fits its unique circumstances.”

Both value and expediency he said must be the guiding principles of any service that is provided. “By value I mean the dignity of the elderly who must not be looked upon as the embodiment of a social problem that needs to be dealt with but as human persons whose condition we must do our utmost to improve”, Dr Gonzi argued. “Together with demographic pressures, it was clear that a better recognition of such dignity has been a decisive factor in the development of senior care in the Western world. The idea of person-centred care, though not yet universally practised, was now a staple feature of modern discourse on senior care. In practice, this has resulted in countries moving their systems of senior care away from the practice of institutionalisation of the elderly towards a new approach in which care is provided in the community and directly at the senior citizen’s home. This doesn’t mean, however, that institutions like residential homes and nursing homes have no place in a modern system of senior care, or that they should be seen as a necessary evil in cases of severe dependency.”

The capacity of Sri Lanka to realise the potential benefits of the demographic transition and to mitigate the negative effects of ageing depends essentially on the policy and institutional environment that is created. Unless the government and civil society take measures to mitigate the emerging problems, the advantages of a slow growing and stable population would be lost. The actions have to be taken now or the burdens of the ageing population could be a serious disadvantage to the country’s economy and society.

There are several obstacles to the country taking the necessary measures. First and foremost, the fiscal stringency that the government is going through leaves little resources for investment in the health care of the elderly. The required investment in education and training of medical staff is high. Finding such funds with an ongoing war is almost impossible.

Second, reforms that are needed in the working age and retirement benefits are likely to be postponed or receive scant attention as it is not an immediate problem but one of the consequence soon. The country’s progress in many fields is being blocked by a culture of anti-reform. Any suggestion of an extension in the retirement age is likely to face political protest. Similarly changes in contributions to pension funds and retirement benefits are likely to be resisted.

The care of the elderly would require a large amount of state assistance even though community based organisations are even at present helping. The woeful inadequacy of state assistance to elderly homes is self-evident from the fact that certain homes get a paltry Rupees 300 per resident. New homes require to be established and funded well if the growing number of elderly is to be taken care of. The thrust in public expenditure would have to take on the role as it did for free education from 1942.

Unfortunately the economic conditions then and now are very different. Delays in investing for the care of the elderly can ruin the advantages of a slow growing population for economic growth and social advancement. There should be a public clamour to move governments to adopt correct policy measures and to implement them effectively. Meanwhile the community itself must redouble its efforts to care for the elderly.

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Copyright 2007 Wijeya Newspapers Ltd.Colombo. Sri Lanka.