According to some demographers, in five years Croatia will not be able to pay pensions to its retirees.
In Croatia, for each employee there is one pensioner or unemployed person, not counting children and university students. The health and pension systems as we know them can continue for about five years, after which they will become unsustainable, since Croatia will have fewer young people able to “earn” pensions for others and provide healthcare for elderly, warns demographer Stjepan Šterc, assistant professor at the Faculty of Science in Zagreb, reports Novi List on October 17, 2016.
The difference between the new people entering the workforce and those who leave it is about 10,000 people a year, which means that 10,000 people more leave the active population. That will continue for at least another 15 years. In ten years, the share of population over 65 years will be twice as large as the share of young people under 19 years of age.
“When you add up all this, estimates show that the health and pension systems can withstand it for five more years, and after that it will be very difficult. An additional problem is that our health system has 150,000 insured people more than there are inhabitants in Croatia. This means that people who do not live permanently in Croatia are using the healthcare system – there are people who live abroad, but use healthcare services here because they are free”, says Šterc.
“Demographic issues are a cornerstone of the economy, and that is something that our politicians understand very well, but are not doing anything about it. It is impossible to increase the birth rate just by calling on patriotism or national consciousness. It is a process which the state must pay for – it must provide people with jobs which will enable them to have a nice, normal life, or take more money from those who do not have children. Promoting employment is not enough, because people need, in addition to jobs, financial and housing security. When you take a look at the budget, there are unbelievable items which are being paid. More than ten billion kuna a year goes to things which might not be in our strategic interest. One of the examples are agricultural subsidies, which are being paid not by production, but by hectare, including unused fields”, says Šterc.
He is convinced that a large number of demographic measures can be financed from EU funds for rural development and development of islands. “Among other things, why would we not encourage young, urban population without jobs to develop activities in rural areas? When our young people go abroad, they accept all sorts of jobs, including on farms. Why couldn’t we establish programmes which will bring young people from the cities to the countryside? We should also involve Croatian diaspora, which should get incentives to return to Croatia with their businesses”, concludes Šterc.