Lack of pension contributions combined with shrinking societal safety net and rapid aging of the population could spell major trouble down the road.
TIRANA TIMES EDITORIAL
Because of the roller-coaster ride Albania’s society has been through in the past two decades, the social insurance pension system is completely broken.
The government has to keep it afloat at great expense to the state budget, while many of those who have worked for 40 years do not get what they put into the system, and most of the amounts paid out are at subsistence levels. But there is no other choice for those currently at retirement age.
Long-needed reforms are needed to the social insurance pension system, so those currently working don’t suffer the same fate. But even for the current workers the figures are striking and a social crisis looms.
Half the working wage population do not pay social insurance contributions and could remain without a pension at retirement age. An estimated 56 percent of people of working wage are out of the social insurance scheme, which has a deficit of 45 percent and is financed by other tax revenue. So a proposal this week to reform the system to include everyone is an welcome move. (See article on page 4.)
But the other crisis behind things like pension funding is something that almost no one is talking about in Albania. Most Albanians do not realize the country’s population is shrinking. Albania is aging, rapidly.
Emigration is a major factor, but it is not alone. Birthrates have also been below replacement rates for more than a decade. Albania once had Europe’s largest families. Today, the typical family has less than two children. The country had a birthrate of 6.0 in 1961, 2.1 in 2002, and 1.7 in 2011, the latest available data.
Ironically, for certain corners of Europe, a massive immigration wave from countries like Albania is the boogie man in the room when it comes to enlargement of the European Union. The reality is that in another generation there won’t be anyone to immigrate. Albania’s neighbors are in a similar demographic situation themselves.
But the problem is who will take care financially and otherwise of the aging population. One safety net has been societal. Families simply took care of their own elderly. Considering that people reaching retirement age today supported their parents who had 6 children, and their two to three children will start supporting them, the one child with two parents in the next generation will have to pick up a lot more responsibilities.
There is currently little or no discussion about declining birthrate in Albania. In this supposed traditional and conservative society, there is also no talk or discussion about abortion either. It is legal and widespread.
But at least one religious leader had a message about both in his Christmas message. In Shkodra, the historic center of Albania’s Catholics, Archbishop Angelo Masafra, ironically from Italy, a country with an even worse demographic crisis than Albania, called on Albanians “to embrace life” and “have babies.”
Religious motives aside, Albanians should be heeding his advice. If anything, they will at some point need someone to pay their pensions thirty years down the road.
