Rama's campaign for pensions, Ditmir Bushati analyzes the economic model

2024-10-24 11:21:32 TiranaPost

By Ditmir Bushati/ WHAT ALBANIA NEEDS TODAY!
A NOTE TO OUR PARENTS AND FUTURE GENERATIONS.

A year ago, I invited Arjan Gjonça, a professor at the London School of Economics (LSE) and a United Nations expert on population and education issues, to my podcast "Public Square", with whom I discussed three dangers that threaten Albanian society. : I) pension scheme; ii) health care; iii) social care.

Indeed, these are challenges for any responsible society that respects the contribution of parents by opening the future paths for children. After, as Jacques Attali rightly says: "We cannot live at the expense of past and future generations. We eat the contribution of the former, we destroy the inheritance of the latter".

It is positive that the government has made the pension scheme the topic of the day, as well as the communication campaign with the business for the real declaration of wages, which helps the economy and the pension scheme. However, in order to address these challenges and not remain at the level of the day's rhetoric, it is necessary to deal with the policies implemented so far, as well as the undertaking of radical reforms.

The figures show that the pension scheme reform of 2014 did not have the expected effect. Because the contributor base has not expanded, society is aging, and the active workforce continues to leave the country. The new pensioners in the scheme in 2023 contributed only 27 years on average, while in 2013 the new pensioners contributed to the scheme an average of 31 years.
Also, the budget support of the pension scheme has decreased. In 2020 it was 1.96% of the Gross Domestic Product (GDP), while in 2023 it was only 0.63% of the GDP. Therefore, non-declaration or under-declaration of salaries is not the only factor that has prevented the increase of pensions.

The financial gap between what is needed and the deepening of the contribution from the current payers cannot be filled without the expansion of the base with new contributors and without budget support, which comes as a result of the determination as a priority by the government. The pension scheme cannot be 'healed' only through the income collected by social security contributors. For the additional 16,000-18,000 retirees, 22,000-23,000 employees should enter the labor market.

For there to be new contributors, we must accept that the pension scheme is only the end point of a system that basically has two other equally important elements: health care and social protection. These elements have their genesis in good governance and the economic model.

Without the review of the current economic model, which is based on the "privatization of benefits and the socialization of risk", there can be neither a stable pension scheme nor a curb on the departure of people from the country. The Albanian economy relies mainly on branches such as construction or tourism, which are temporary for the way the country should develop and do not offer a long-term perspective.

We need a highly productive, knowledge-based economy to create higher incomes and a sustainable middle class. Without quality education and knowledge, high productivity is impossible. At the same time, we need to promote new branches of development based on green industry, develop energy resources, mining resources for the development of heavy industry, and direct human resources to new branches.

Also, active policies that shape the economy of life are needed. So more democracy, more health, more education, more affordable and healthy food, and of course security.

To get out of this situation we need to redistribute resources and income, but above all we need to redistribute the resources of knowledge and skills through education. Inequalities of socio-economic status, income and life opportunities, are not solved by campaigns, alms, or the end of the year turkey. They should constitute the axis of action of a government that is oriented towards the values of the democratic left.