BUSINESS

Is Bosnia-Herzegovina becoming County of Retirees?

 

For every 100 people in Bosnia-Herzegovina, 25 are retired, macroeconomic analyst Faruk Hadzic told AlJazeera Balkans.  “Their pension is provided by current workers, who are now 30 for every 100 residents.

In order for the pension system to be sustainable, the ratio of the population must be two to one, and in Bosnia

that number is 1.2 to one pensioner,” said Hadzic. According to Hadzic, 30 workers cover 25 retirees. He points out that it is worrying that our workforce is shrinking rapidly.

“It includes both employed and unemployed, and there is a significant increase in the number of pensioners. There is a white plague in BiH, ie the number of deaths is higher than the number of births. Since 2012, the total workforce has been reduced by 130,000 people and the number of pensioners has increased by 60 thousand, “Hadzic said.

The ratio of all employed and unemployed workers is below 1.5, and for the pension system to be a sustainable ratio, there must be two workers per pensioner. Hadzic said that in the next five years the number of pensioners in our country will increase by 80 thousand.

The Economist published an infographic on its LinkedIn profile, based on data from the 2018 Global Economic Forum’s Global Competitiveness Report, Buka reports.

This chart shows that Bosnia-Herzegovina is in the top among the countries of the world – in the brain drain.

A previously published article by The Economist, “What do educated people from poor countries think about brain drain”, speaks of a paradox where the smartest people, who are the only chance for poor countries to get out of a difficult economic situation, leave their countries because of this situation, says Buka.

Highly skilled immigrants from poorer parts of the world tend to be welcomed by most rich countries. In the debate about migration in the West, foreign surgeons and software engineers are not maligned in the way that farm workers and waiters frequently are, even though they have been migrating in ever greater numbers. In the decade to 2010-11 the number of university-educated migrants in the G20, a group of large economies that hosts two-thirds of the world’s migrants, grew by 60% to 32m, according to the OECD, a club of mostly rich countries.

On the face of it, this sounds like a win-win trend, as host countries benefit from the migrants’ skills, who in turn benefit from the more stable economic environment they enter. But some development economists fret that it is bad for the migrants’ home countries. They argue that “brain drain” from poor countries is robbing those countries of the people they need to escape poverty. Others are sceptical about the theory, arguing that the benefits of remittances from exiles and the new skills which returning migrants bring home far outweigh the damage of their leaving.

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