Moldova goes 'from red to gray'

Moldova's population will shrink by 300,000 people by 2025. The population share over 65 years of age will grow by more than 60 percent, while the share of persons aged 15 to 64, the conventional age range of the working-age population, will remain at the level of 67 percent. These and other forecasts are contained in the report titled “From Red to Gray: The Third Transition of Aging Populations in Easter Europe and Former Soviet Union”, launched in Chisinau on Wednesday, June 18, at the World Bank headquarters, Info-Prim Neo reports. One of the report's authors, Gordon Betcherman, has explained that the countries of Eastern Europe and the former Soviet Union are experiencing a third transition marked by population aging and population reduction, a transition that overlaps with their recent political and economic transitions while making the shift from socialism to democracy. In other words, the red in the title stands for socialism, while the gray symbolizes the aging, said Betcherman. According to him, while populations are aging in industrial countries too, the unique conjunction of rapidly aging and relatively poor populations exists only in this region. The phenomenon is result of unprecedented declines in fertility and rising life expectancies. This region, except for Turkey, is projected to see its total population shrink by about 23.5 million. The largest absolute declines will be in Russia, followed by Ukraine and Romania. This report examines the possible impact of this third transition. It analyzes projections and policy outlooks for a whole range of issues, from labor markets to pension policies, from health care to savings and capital markets. It concludes that countries can avoid severe economic consequences if they accelerate their economic transition and undertake longer-term policies to meet the aging challenge. The authors assert that population aging does not necessarily imply lower economic growth rates, provided that productivity is stimulated in working-age population. Other solutions to cope with this challenge is increasing the retirement age; improving the ability to do more flexible, part-time work; improving the health status of older workers; attracting workers from other countries; investing in education and lifelong learning, etc. According to a study carried out earlier by the Austria-based International Institute for Applied Systems Analysis, Moldova's population is expected to srink to 1.5 million from more than 4 million people that inhabit at present the both sides of the Nistru River. Elderly will constitute a quarter of the population.