Latin America, Fastest Aging Region in the World, Should Seek Silver Lining – IBD Report

RIO DE JANEIRO, BRAZIL – Latin America has been labeled a young region for years. It still is. People over 60 represent on average just 13 percent of the population. Only Barbados and Uruguay are close to 20 percent. However, Latin America will not be forever young. It is the fastest aging region in the world. It is estimated that by 2050, 27.5 percent will be over 60 years old, one in four inhabitants.

And in another 40 years, in 2090, it will be the region with the oldest population in the world. A total of 36 percent of its population will be over 60 years of age, according to the United Nations projections on the world population.

It doesn’t seem like much time, but it should be enough for the countries in the region to adapt their protection systems and transform their economies to improve the quality of life of their elderly. “It is a challenge and an opportunity. Demographic change is coming too fast. We need to start looking at this issue in the medium and long term, and our challenge is to prepare the region. And we must see it from two perspectives that must be made visible.

One, more negative, will imply assisting more elderly people in poor health conditions. The other, more positive, is that there will also be more elderly people in good health, willing and able to continue contributing to society and enjoying life. As far as the economy is concerned, there is also an opportunity,” says Masato Okumura, co-author of the publication ‘The Silver Economy in Latin America and the Caribbean: Aging as an Opportunity for Innovation, Entrepreneurship and Inclusion by the Inter-American Development Bank’ (IBD).

The starting point is not the best. Latin American cities are not places where people age well today. The popular neighborhoods in the south of Bogotá know this. There, Luis García, 62 years old, does not receive a pension, only an aid of 125,000 pesos a month from the mayor of the Colombian capital, about 30 euros. He earns one or two more euros a day selling garbage bags and incense on the streets. His health condition is also delicate. He has arthritis and a disability due to the sequelae left by cerebral palsy, as well as gastritis and depression. He is alone, with no family support, and must pay the rent of the modest room where he lives.

Mrs. María Gutiérrez lives very close by. At 70, she has a very active community life. Before the pandemic, she attended the neighborhood dance group twice a week and had just started high school after finishing elementary school. María was a widow while still very young, but raised her two daughters. She receives a pension of 800,000 pesos, about 200 euros a month, very little for the over 30 years she worked. With this money she meets her basic needs because, fortunately, she owns her house and does not need to pay rent.

Mr. Luis and Mrs. María are the two sides of the same coin and are part of this old Latin American population, as heterogeneous as it is vulnerable, often invisible and with little social protection. Therefore, the question is whether Latin America will be prepared to face the aging of its population and whether it will have sufficient capacity and resources to meet its demands. The challenges are tremendous.
Pensions, health and dependence

The pressure of population aging requires implementing far-reaching reforms in Latin American public policies on pension, health and care systems for dependents. “Public social spending in general is biased in Latin America toward older people with contributory pensions, which in some countries are generous but take up a large part of public spending; in others, due to economic informality, there are few people covered by a contributory system and, in other cases, many people receive very low pensions. In general, these are outdated and unfair systems that need to be made more flexible,” says Marco Stampini, also co-author of the publication on the economics of aging and a leading expert in the field of social protection and health at the IDB, which in 2015 created the Pension Network in Latin America and the Caribbean (Red PLAC) as a forum for the debate on the present and future of pension systems.

As for the health of the region’s elderly, deterioration is also expected by 2050, which is not only related to the age issue, but to trends such as lifestyle and inadequate nutrition that would still allow time to be reversed. And diabetes or risk factors such as hypertension are increasing in some countries in the region in a worrying way. “Health systems must be reformed, prioritizing basic and personalized care to allow a greater focus on chronic diseases,” says Stampini.

In parallel, the autonomy of millions of people will worsen within 30 years. Currently, eight million elderly people are functionally dependent in the region. And 12 percent of people over 60 years of age. In 2050, they are estimated to exceed 27 million. Stampini is a great connoisseur of this reality and also co-author of another publication on the subject: ‘Aging with Care: Attention to Dependence in Latin America and the Caribbean’ and stresses the need to start building systems for long-term care and raise awareness among political decision-makers and civil society. “In terms of care, there is virtually everything to do. Only Uruguay and, to a lesser extent, Argentina, Chile and Costa Rica have begun to implement long-term care systems. It’s urgent to start building them,” says the expert.

However, the public sector, with exceptions, does not see acting against the aging population as a priority. Nor does the private sector seem to see any profitability yet. The IDB is one of the few institutions that have been warning for some years about the need for the region to start working for its elders and try to include this issue on the agenda. Social protection and health with its urgent need for reforms are critical to this organization, which also believes it is necessary to focus on other aspects related to economic opportunities associated with the demand for goods and services from the elderly population, as consumers. It is part of the so-called aging economy aimed particularly at older people who, despite their age, will continue to lead an active life.

Experts alert to the potential of a sector that starts virtually from scratch and should be considered as a reflection of Europe or Japan, where the silver economy has become an economic driver.

Countless challenges and opportunities for investment and innovation have already been identified with the potential to become solutions for the elderly. They are related to health services, dependence care, financial products, housing, adaptation of urban infrastructure, transport or consumption; Sectors such as tourism, fashion, food or leisure may be very relevant.

Other inclusion options more related to the active involvement of the elderly in the labor market or in the educational offer are also pointed out as challenges and opportunities. “Around the aging economy there is much potential and we want to promote the entrepreneurship of young people and even older people who can provide ideas of services and innovative solutions that we can finance. One of our advantages is that there are already positive experiences in other parts of the world to learn from,” says Masato Okumura.

Uruguay, the testing ground

Uruguay will be the IDB’s testing ground. With only 3.5 million inhabitants, 19 percent of whom are over 60 years of age, it is one of the few countries in the region that has the political vision to begin to emphasize population aging. Uruguay currently has a national system of prolonged attention in place and also good levels of social protection, among which is the universality of its pensions.

The IDB wants to develop a business ecosystem project for the elderly market in Uruguay. “I call it the invisible economy that no one pays attention to. There is almost everything to do. Firstly, we want to build knowledge with respect to the elderly; secondly, to raise awareness and, later, to see how we can mobilize the local and regional entrepreneurial ecosystem to help them develop services and quality products that meet the demand of the elderly without neglecting to value the knowledge they have and how they can help us”, explains by video call Ana Castillo, BIDLab’s senior specialist in Uruguay.

The pandemic can also be seen as an opportunity. Uruguay knew how to face it and control it well, but no one knows that Covid-19 exposed the physical and social vulnerability of previous generations.

Thirty years from now, when Latin America is an older region, Masato Okumura, Marco Stampini and Ana Castillo want to be optimistic. Whether wrinkles are beautiful in this part of the world will depend on many factors. “I would like our elders to have access to the opportunities that interest them, whether in terms of employment, entrepreneurship, education, consumption or entertainment, and to be well taken care of,” says Masato. “There should be adequate social security coverage that reaches all people, quality health services very close to them and an insurance against the risk of dependence. Concurrently, I would like this battle against age prejudice to be won and for the elderly to see themselves as part of society and participate. It would be a scenario with very little inequality and inequality is a Latin American feature. I see that it’s difficult for these inequalities to vanish for the elderly in 30 years, but I want to be optimistic,” Stampini adds.

Source: El País