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"Greying" of Romania Threatens Future Prosperity

01 12 2006  More pensioners and fewer children - Romania joins ranks of European countries facing demographic crisis.

By Floriana Scanteie in Bucharest (Balkan Insight, 1 Dec 06)

With more than 21 million inhabitants, Romania is still one of the most populous countries in Central or Eastern Europe - a veritable giant in terms of numbers when compared to such neighbours as Hungary or Bulgaria.

But not for much longer, if the warnings of worried demographers are anything to go by.
 
They say slowing birthrates, rising life expectancy and continued emigration could push Romania into a severe economic crisis within the next few decades.
 
Professor Vasile Ghetau, one of the country's leading demographers, says if fertility rates remains at current levels and the number of old people keeps growing, the population will crash from 21 million to only 16 million people by 2050.
 
Furthermore, at least half the Romanians then alive will be old-age pensioners.
 
The most worrying of the relevant indices is the fertility rate. This has dropped from more than 2.2 children per woman in 1989 to only 1.3 last year. The level needs to be at least 2.1 for the population to maintain itself at current levels.
 
The causes of the decline in family size are varied. Some experts believe that while the communist system gave Romanians a spartan lifestyle, it also had a stable and "traditional" element to it. People mostly married young and went on to have at least two children.
 
Today, some families have opted to limit offspring because of a fall in living standards linked to the transition to a market economy.
 
Others are skipping family life for the opposite reasons - because improved lifestyles and rising expectations encourage them to put off family life in order to concentrate on jobs and consumerism.
 
Viviana Livadaru, 36, is typical of a new successful post-communist generation in Romania who (much like their counterparts in Italy and Spain) seem to have a markedly different lifestyles and expectations from that of their parents.
 
Livadaru spent the 1990s working and studying all over Europe - unthinkable in the communist era - building up a career in marketing and tourism. Children receded into the background.
 
"A family would have cramped our lifestyle," she said. "My husband and I live a full life, traveling a lot. It's only now that I'm starting to change my mind and want a baby."
 
Although demographers predict fertility rates may recover from their current all-time low, they may not return to the "replacement levels" of 2.1 children per woman, or more.
 
Vasile Ghetau says only a high growth rate can reverse the population decline.
 
"There is only one way out: an improvement in the economic and social situation, which would mean creating the resources to counter the negative effects of the process," he said.
 
To add to the problem, longer average life spans are increasing the pool of elderly Romanians just as the pool of economically active youngsters shrinks.
 
This adds to the overall cost of healthcare and pensions, placing a heavy burden on an over-extended government budget.
 
The ratio of pensioners to active workers is already around 1:1, significantly below the 1:2.5 ratio that most economists consider the minimum needed to sustain economic growth.
 
The prospect of an ageing population and ever more expensive pension bills prompted the former Socialist government to try to reform the system.
 
They increased the retirement age over the next five from the current retirement ages of 62 for men and 57 for women to 65 for both sexes.
 
But experts say tinkering with retirement ages is only part of the solution. Other avenues must be explored in order to keep the elderly in better health, and for longer.
 
"Romania has to restructure its medical and social systems in order to help keep its population active as much as possible," said Peer Sieben, of the UN Population Fund in Romania.
 
This is a new challenge for the health profession, where doctors have been trained to concentrate on epidemics and infectious diseases.
 
Now they are being urged to readjust their priorities to deal more with long-term, age-related conditions, such as heart disease.
 
Another cause of population decline is economic migration.
 
Officially this has accounted for some the loss of 300,000 people over the last 15 years. In all, about 1.5 million Romanians now work overseas.
 
Many of these people have now settled abroad permanently and do not appear to intend to return.
 
While the rate of emigration has declined in the last five years, as the economy picks up, it is worrying that most of those who leave come from the most economically productive sector of society - young well-educated professionals.
 
Increased immigration to make up the shortfall is one option under study.
 
But as the experience of Western Europe has shown, immigration from the Third World is fraught with difficulties and consequences.
 
In short, there is no easy solution. The demographic crisis may be one of the most difficult challenges Romania faces in the future.
 
Floriana Scanteie is a freelance journalist and a regular contributor to Balkan Insight. Balkan Insight is BIRN's online publication.