Introduction:
As Kofi Annan once memorably said, Barbados punches above its weight. It is one of those exaggerated statements that would come back to haunt the objects of such flattery and the author of such inflated praise.

According to the United Nations Food and Agricultural Organisation, this tiny island of between 270000 and 300000 people is now one of the fattest nations on earth. Of course, one only has to see the school children running – or rolling – for the bus in the mornings to realise this is a nation on its last legs. This observation, however, coincides with another development hardly mentioned by our politicians, policymakers, neighbours and workmates: Barbados is facing a ticking demographic time bomb. When the two collide, an obese younger generation and growing longevity, the fiscal explosion waiting to happen will make DLP incompetence over the recession and structural chaos look like child’s play.

For the firs time, we as nation are faced with the children and grand children of the babyboomers facing an earlier grave than their elders, through a reckless lifestyle, including a poor fast food diet, physical laziness and a reluctance to exercise.

An Ageing World:
The world is ageing, and with that emerges the twin social policy issues of a declining dependency ratio and serious ill heath in older retirement – both major issues for the economy. Despite a popular belief that the state provides an adequate social safety net for those reaching retirement age and those who have actually retired, this in reality is far from the case. The current crude and almost criminal abuse of the national insurance scheme and the too often pensioners’ voices raised about not receiving their pensions on time should raise alarm bells. Even those people who get their pensions from overseas often complain that the banks, on advice from the central bank, hold on to their money for far too long. This is made worse by the dubious practices by insurance companies and the proper lack of regulation and supervision, which allow them to operate like cowboys; Clico and its ever-running chaotic problems is just one example of incompetence at the very top level of the private and regulatory sectors. But it is the dependency ratio: the number of people of working age to those above the state retirement age, which will created problems for public finances.

Demographics of Ageing:
It is often said, usually by those in positions of authority, how sophisticated Barbados is as a society; equally, to be critical of this often brings out the hostility in those who raise questions about being constructive in criticism. The reality remains, however, that there are huge gaps in our knowledge of our society, gaps which must be filled in if our policymaking is going to have any relations to the facts on the ground.

In terms of longevity, it is still not clear what impact this demographic change will be on the rest of society, what it will mean in terms of real numbers, and in terms of health and social service costs. The problems thrown up by an ageing society, however, are not just economic, measured in terms of the labour force, productivity and GDP growth. It is also cultural and socio-economic, reflected in their consumptions patterns, social and cultural interests, but most important of all about fertility and the cost and provision of long-term care.

Like most western societies, there has been a falloff in fertility by young Barbadian women, from the four and five children of their parents’ and grand parents’ generation, to a rate now under 2.0 per cent, just below replacement levels. At the same time, due to improvements in diet, lower infant mortality, public sanitation, and medical science, people (the babyboom generation) are now living much longer than at anytime in history. The other elephant in the room in terms of longevity is the increasing divorce rate and the search for love in old age. This has given rise to growing promiscuity among the retired and, with it, an alarming rise in sexually transmitted diseases.

Economics of Ageing:
What does all this mean in economic terms? In simple macro-economic terms, the economics of ageing follows a basic equation: expected life = expected healthy working life + expected unhealthy working life + expected healthy retirement + plus unhealthy retirement. After this there is death. The underlying assumptions, which actuaries are much better at than I can ever be, are that people of working age will in the main be economically productive and contributing to the exchequer through taxation and national insurance contributions. There is also evidence that a healthy working older cohort could contribute nearly three per cent to GDP, Apart from the cost of ageing, one thing that is often overlooked is that older people are more likely to be self-employed, have greater assets, start new businesses and have investment equities past the state retirement age. They also save the state money by baby-sitting for their children, volunteer for civic  activities and, in their early retirement, play an active role in their local church and wider community. These longevity projections will inevitably call for sophisticated lifetime financial planning, from the cradle to the grave, including care home and funeral fees. This will necessitate an improved form of financial regulation, supervision and most of all training and qualifications. If government jumps at this opportunity, we will take one step back, but will be miles ahead of similar small economies. They also present challenges to the government and the insurance sector in terms of protection product design and suitability, which will become central to the relationship between client and regulated financial adviser.

Long term care planning must be separated from pensions policy. The two are different: one assumes the provision of a retirement income for the third or so of one’s life when one is not economically active, while the other assumes funding for the serious degenerative diseases and inability to help oneself in the advanced years of retirement. For pensions, ever since Bismarck, the world has become accustomed to the fact that it is prudent to save for one’s retirement. The challenge for government and policymakers is how to nudge current working population in to saving for the likelihood of serious illness in older retirement. One option that government must seriously consider is compulsory saving for long term care.

In itself compulsion is nothing new or to be afraid of. We already have a legal obligation to get motor insurance, and mortgage lenders insist on home insurance; Chile, the nation that gave us the modern form of pensions, has made it compulsory for all working people to contribute seven per cent of their pay in to the National Health Fund or to a private equivalent. So, it is a bullet we have got to bite at some point. The insurance sector in Barbados is comfortable picking low-hanging fruit – motor insurance, which is legally compulsory, dodgy annuity contract, whole-of-life insurance policies which the policyholder closes after a couple years, resulting in the providers holding on to the money and, most of all, embarrassing public ignorance.

Health, Nutrition and the Elderly:
Another major challenge facing the elderly, especially the older elderly (those aged in their 80s and 90s), is getting nutritional meals every day.
Quite often, if they live with younger relatives, they are forced to eat what the others get, like it or not. It is an issue that is largely overlooked, and apart from the Park Kitchen ran by the late Ernest Deighton Mottley, when he was Mayor of Bridgetown, such generosity of spirit and advanced thinking in social policy terms, has not been tried again. Apart from one or two politicians, who feed their constituents in exchange for their votes, few people at a governmental or civic level care very much about how the elderly eat.

It is a responsibility the management of which can easily be devolved to constituency council, working in close cooperation with relatives, neighbours and volunteers, but is rightly that of the chief medical officer. One example of community intervention on this level in Britain, which I find appealing, is in pairing home cooks with the elderly. Such an example of civic society at work, however, cannot be aw replacement for a comprehensive health and social care programme as part of the government’s overall public policy. But it is a radical change in lifestyle and nutrition that will improve the quality of Barbadian lives.

I remember as a little boy my grandmother, a lovely woman and cook, putting sugar in dumplings, sugar in condense milk; we drank sweet tea, fizzy drinks, we sprinkled sugar on fruit, ate lots of sweet cake, turnovers, cut drops – pastry and cakes were the joys of growing up. Many of us also ate too many Gwen Workman specials, along with Martineau drinks, then feasted on pork chops in Carrington Village, fried fish – all the wrong things for growing young people to eat and drink. It was a lifestyle that should not have been encouraged and which, in time, will come back to haunt most of us. These are different days; prevention is better than cure, and nowhere is this more true than in long-term health care.

By encouraging people to change their lifestyles from an early age, to be active, exercise, eat plenty of fruit and vegetables and less red meats, in time this will lead to massive savings on the nation’s health bill. As I have pointed out, the future health and social care bill will dwarf the pensions and global banking crisis by a long stretch. As we get older, the list of diseases and chronic conditions we face can read can an introduction to medicine: cardiovascular, lung cancer, cerebrovascular, respiratory, dementia and Alzheimer’s, flu and pneumonia, prostate cancer, colon cancer, stomach cancer, liver disease, and more.

Analysis and Conclusion:
The fact that people are living longer must be celebrated as a victory for changes in the way we work, better nutrition and the wonders of medical science. These medical advances, from nano-technology, genetically individualised medicines to tele-diagnostics and the other still to be explored discoveries from the Human Genome Project, may or may not extend our longevity even more.

In the end, all these improvements and more will cost the taxpayer and unless we start planning for them now, when they creep up on us – and following generations – it will still come as a shock. Even more damaging will be that the medical tourists in their state-of-the-art clinics and private hospitals will be getting the best treatments, while ordinary Barbadians in their own home nation will have to make do. Living longer does not mean living healthier and this is the major challenge facing more advanced and developing societies. So, what may look like just a few overweight young men and women will in time become a heavy fiscal charge.

In simple economic terms, an ageing population means as a society we must save more, work longer or use the family home to subsidise our retirement incomes. We also have to look at new ways of funding health care, with accidents and emergencies being free at the point of need, and operations and other procedures paid for through independent savings or insurance bonds or medical savings accounts. The macroeconomics of ageing also touches on lifetime saving, growth, retirement and long term care.

One good cultural model of lifetime financial planning is that of the so-called Confucian cultures, in particular Taiwan, China and South Korea, along with Japan. Contrast the savings habits of those heavily leveraged cultures with that of the North American and European cultures. Equally, China has just made it a legal requirement that children must look after their elderly parents, a policy that should be given serious consideration in socially crippled developing nations.

The failure of our health and social care policies is that there is nothing in place to meet the projected needs of an ageing community; and, even more, Barbados should, and could be, a centre of excellence for health and social care, not only in the Eastern Caribbean, but throughout the entire region. We know many of those micro-islands will never be able to set up economically independent medical and healthcare programmes for their citizens and will find it much more economic to buy those services from a well equipped and holistically organised Barbados. The idea of increasing the state retirement age is not the full answer, since there is empirical evidence that a large number of people, especially males who smoke and drink excessively, start developing chronic diseases in their early 60s.

If the gap between the development of chronic disease and the state retirement gap widens, then there is a grey area that must be filled, either by disability benefits or another form of state handout. The truth is that Barbados, for almost all of the post-independence years, found itself on cruise, making no effort and gathering up the tourists’ dollars. But the world has changed and there is now a demand for the public and private sectors to pull their fingers out and do some real work; they are finding this a challenge too far.

So, in typical fashion, they are rushing to the Chinese for cheap renmimbis. However, if they thought European colonialism was terrible, just wait until the Chinese get their feet under the table. At some point even Barbadians must realise that the Chinese think even less of people of African descent than the Europeans. That is a reality we must face at some point. What is rather interesting is that China is also facing a demographic timebomb and by 2030 will have a higher proportion of retired people than the US. It is almost certain that China will go down the increased fertility route to replace its elderly population, then to introduce immigration – especially from new ethnic and religious groups.
In the final analysis, government must pull all heads together as soon as possible to workout solutions to this pending crisis. It must draw on the knowledge and expertise of health economists, demographers, actuaries, policymakers, healthcare providers, and the elderly themselves to come to some conclusion about how we will approach the coming decades.