-Analysis-
A look at Brazil’s recent demographics show a population that is aging at the fastest pace in its modern history. Life expectancy for the Latin American country went from 45.5 in 1940 to 75.5 in 2015, while years lived for adults aged over 60 have increased 8.9 years (rising from 13.2 to 22.1 years). Most likely by 2050, Brazil will have around 66 million above the age over 60, living in its territory, or three times more than the 24 million today.
While demographic trends indicate an aging population worldwide, Brazil’s rate is outstanding for its speed. Countries like France, the United Kingdom and Spain, which are already known for their inhabitants’ longevity, needed three times as long as Brazil to double their percentage of older population. By 2040, older people are expected to constitute one-fifth of Brazil’s population, up from 10% in 2010.
Among traditional reasons given for demographic changes (fertility, mortality, migration, wars, epidemics), it is the basic fall in fertility rates and rise in life expectancy that best explain the widening of the Brazilian population pyramid. The number of children per woman has dropped significantly in recent years. In 2015 the figure was 1.7, which is considerably less than the average number of children for grandmothers two generations earlier (6.3 per woman). Improving socioeconomic conditions have also allowed the mortality rate to fall in recent decades to 5.9 per 1,000 inhabitants, significantly below the 15.5/1,000 rate of the 1950s.
One of the biggest challenges of modern Brazilian history.
This rapidly aging population entails challenges, the most publicized of which is for the social security system. A relatively smaller number of contributors will reduce revenues and increase costs associated with an increasing number of beneficiaries, making the current retirement system untenable. The general deficit of the social security system is estimated to have hit an all-time high in 2016, just above 4% of the GDP, though perspectives are expected to grow much bleaker. With pensions continuing to function under current rules, spending estimates are expected to head toward 23% of GDP by 2060.
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A couple relaxes at Barra de Lagoa beach on Santa Catarina Island, Brazil — Photo: Adam Jones
Since social security works as a sharing scheme, financial imbalances generated by the system are ultimately covered by the treasury, which works against efforts to balance the budget. So the main task for Brazilian legislators at the start of 2018 is to approve a provisional reform that will take the current system toward financial sustainability. It must be both fairer and lighter on fiscal accounts.
Yet redefining pension security is not the only challenge for an aging Brazil. The country needs to improve public transport, rethink healthcare services and revamp human resources training and the generation of savings and productivity.
The demographic change is among the biggest challenges of modern Brazilian history, alongside such phenomena as accelerated urbanization and the push for universal healthcare and education. The challenge is multiplied by the fact that no government targets can alter its progression. The country needs to design appropriate public policies and create institutions and infrastructures to meet the needs of a growing number of “grandparents’ populating the country’s cities and countryside. These are long-term challenges that require a serious and rapid response from both the political class and society as a whole.
