Ageing hampers economic growth - Prof. Sinclair

The financial crisis in Southern Europe and beyond is far from over. Let’s hope it is not the beginning of another economic mayhem, said Professor of Economics, University of Birmingham, Peter Sinclair addressing a seminar on ‘After the Crisis’ at the Centre for Banking Studies on Thursday.

He said various opinions have been expressed on the economic crisis and added that there is a risk of making responses. While the crisis seems over in certain countries some are concerned about over-regulation to avert a repetition.

“Crises are not necessarily bad and they could help groom and recoup countries to face storms and steer the economy in the right path. It could be similar to weeding the garden to look good but in the process we could lose a flower or two”, Prof. Sinclair said.

“Ageing is a global problem adversely affecting the growth of economies. Countries are grappling with the problem of a fast ageing population and sustenance of welfare programs”, he said.

Public sector deficit in Belgium and the UK has risen due to the increase in contributions to pension schemes. France has unveiled pension reforms as part of an austerity plan followed by many euro-zone countries to curb expenditure.

Last month France introduced its pension reforms which will raise the legal retirement age from 60 to 62 by 2018.

Slow population growth and rapid ageing have raised concerns globally on how the aged could support the non-working and dependents.

The high ageing population has caused a severe labour scarcity and wage hike in Japan.

Prof. Sinclair said the diminishing workforce is a major concern to Europe and North America which have to spend enormously on healthcare and other welfare measures.

Studies on Sri Lanka’s ageing population reveal that elders face difficulties due to cuts in welfare measurers and lack of care at home.

Experts on ageing in Sri Lanka say that the ageing population would be a burden on the country and notes that elders will not have women at home to take care of them as their daughters and main caretakers are working abroad or pursuing higher education overseas.

Women account for around 1 million or 70 percent of Sri Lankans working in the Middle East. Currently the country’s population is about 20 million and this number is expected to increase to 22 million in around 30 years.

LF