The populations of Central and Eastern European (CESEE) countries are expected to shrink over the next 30 years due to low or negative net birth rates and outward migration, a new demographics report by the IMF says. The negative effects can be diffused by the increase of the retirement age and participation of older workers. The recommendations hold true for Belarus as well.
Belarus is in the process of the pension reform to raise the retirement age to 58 for women and 63 for men by 2020.
Lower birth rates and aging population will have three adverse effects – namely, on economic growth (living standard and financial stability), pressure on healthcare and pension reforms, and, finally, on productivity rates. There’s no single recipe to solve them – reforms should be tailored to the needs of every country.
When it comes to Belarus, IMF experts recommend focussing on the pension reform in the first place.
Next step is the employment of women, and workers older than 55. The latter could have the biggest effect.
“Belarus would benefit significantly from increasing the participation of older workers, even without changing the retirement age,” the report reads.
In general, experts suggest, ambitious reforms could “potentially halt the decline in the labor force in the long term in several countries, including Belarus, Moldova, and the Western Balkan countries”.
In 2016, IMF urged Belarus to continue the retirement reform to eliminate the pension gap by 2022. One of the measures proposed by the experts is a gradual increase in retirement age up to 65 for both men and women.
Alexander Lukashenko recently instructed officials to analyze the effectiveness of the pension system. Experts believe that the continuation of reforms is unavoidable. In particular, reforms can involve the increase of the retirement age for women, revision of insurance deductions and switching to funded pension plans.