The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian economy and social safety net are set to come under growing “strain” as a result of an increasingly elderly population where more than in four citizens are aged over 60 years old come 2050.

An Inter-American Development Bank (IDB) report, detailing a $700,000 project for a Bahamian “silver economy growth hub” that will boost economic participation and inclusion for persons who have reached retirement age, warned that the shifting population demographic will place an ever-growing burden on healthcare and the National Insurance Board (NIB) because there will be fewer workers to support more elderly persons.

NIB is already feeling this pinch, with benefit payouts exceeding contribution income for multiple successive years at the national social security system even before COVID-19 struck. The IDB report warned that “economic inclusion and long-term financial sustainability for seniors” remain key “gaps” - especially for those who have no retirement savings beyond an NIB pension.

Outlining the ever-escalating challenge an increasingly elderly population presents for The Bahamas and other nations, the report said: “Some of the key problems affecting the Latin American and Caribbean regions include a rapidly aging population, with more than one in four people expected to be at least 60 by 2050.

“Longer life expectancy creates financial stress for some seniors, who face fixed incomes, rising living costs (especially healthcare) and scarce employment options. Individuals over 60 encounter ageism and discrimination in the workplace, making it harder for them to find jobs or start businesses.”

Acknowledging that The Bahamas is not unusual in this respect, the IDB said the Government was aware of the issue and has moved to address some of the difficulties via initiatives such as the National Prescription Drug Plan. Yet it added that there is no escaping the growing challenge caused by the demographic shifts producing an increasingly older population that is living longer.

“The percentage of people aged 65 and over in The Bahamas rose from 4.1 percent in 1980 to 9.3 percent in 2023, according to official estimates. In 2010, there were 31,769 people aged 60 and over in The Bahamas, making up 9 percent of the total population,” the report added. “By 2020, the number of people aged 60 and over had increased to 48,000.

“In 2023, the dependency ratio was 38.5 potentially passive people (those under the age of 15 and over 65) per 100 potentially active people, those between the ages of 15 and 64. The official retirement age of citizens in The Bahamas is 65 years, with early retirement beginning as early as 60 years. The average lifespan of a person born in The Bahamas in 2023 was 74.5 years.

“The pace of aging in The Bahamas is predicted to increase, with a proportion of the population aged 60 and older expected to increase to 27.1 percent by 2050. This demographic shift may strain healthcare systems, social security and pension schemes due to the increasing number of retirees compared to the working age population,” the IDB assessment continued.

“There may be a need for more specialised healthcare services and facilities catering to the elderly. The country might face challenges in maintaining a sustainable workforce and economic growth if the trend continues. The dependency ratio is changing, with an increasing number of older people relying on a smaller working age population [to support it].

“This puts pressure on social support systems, which may already be underfunded and overstretched. Empowering and including aging citizens through entrepreneurship and targeted solutions can significantly impact the local Bahamian economy and society. There is a huge market potential for innovative products and services that cater to the needs and preferences of older adults.”

This, the IDB added, is where its $700,000 project comes in. The funding is being split 50/50 between the Government and the multilateral lender, which each set to contribute $350,000 towards an initiative designed to unlock the skills and entrepreneurial potential that elderly Bahamian retirees still possess through linking the necessary support network via public sector agencies, healthcare and the private sector.

Central to the so-called ‘Silver Economy’ strategy is what is being termed a ‘Growth Hub accelerator’ that will focus on Bahamian entrepreneurs and businesses who cater to the specific needs of elderly citizens. The project is aiming to train 60 entrepreneurs in this area, with the ultimate goal of one-quarter - 15 - accessing seed funding and further growing their enterprises.

“The first group consists of entrepreneurs who target older citizens in The Bahamas, as they require more tailored products and services to meet their specific needs physically, mentally and emotionally,” the IDB report said. 

“The target market for their products and/or services would include consumers and stakeholders in the Silver Economy. The project will aim to empower them to create innovative and inclusive solutions for the Silver Economy, and generate income and employment opportunities for themselves and others.....

“For poor and vulnerable seniors across the Caribbean region, limited access to formal employment and social security programmes means they are more reliant on continued income generation to sustain themselves. Without targeted support, these individuals are at increased risk of economic hardship as they age.”

Besides training 60 entrepreneurs in the “development of products and/or services that address the needs of older adults”, the IDB added that the project also wants 12 - or 20 percent - of the 60 targeted entrepreneurs to create products and services focused on elderly women. And 10 percent, or six of the entrepreneurs, will aim their creativity at the poor and vulnerable among the Bahamian elderly population.

And, in addition to creating what was termed as an “enabling environment” for the ‘Silver Economy’, the IDB paper revealed the project also aims to tap into the skills and expertise that expatriate, or foreign workers, possess via a mentorship initiative.

“Expatriates bring a wealth of global expertise that can play a pivotal role in fostering innovation for companies, particularly those addressing the needs of the Silver Economy. Studies have shown that expatriates, often referred to as ‘Expat-preneurs’, contribute significantly to the economic vitality of their host countries through knowledge transfer, entrepreneurial endeavours and cross-cultural exchanges,” the IDB report. 

“Their wealth of knowledge and willingness to exchange information can assist in the development of The Bahamas in significant ways. The project, therefore, places special emphasis on leveraging the global expertise of the expatriate community by pairing them with businesses and start-ups that develop products and services that meet the needs of the Silver Economy and train older adults to start their businesses.”

Summing up the project’s ambitions, the IDB said: “The Growth Hub project is considered innovative because it aims to bridge the gap between the vulnerable needs of the aging population in The Bahamas, including the Family Islands, and leverage the expertise of the expatriate community.

“The project envisions a world where age is not a barrier - but a bridge - to economic prosperity and innovation. The Growth Hub programme focuses on empowering and including aging citizens through entrepreneurship and targeted solutions by preventing the loss of valuable skills and experiences when seniors retire, while addressing the challenges and opportunities of an aging demographic....

“By combining educational workshops, a structured accelerator and a mentorship programme that includes leveraging expatriates with their knowledge and expertise, the project will create a multi-faceted support system that fosters inclusion and drives economic growth within The Bahamas,” it continued.

“This approach empowers older adults and strengthens start-ups, targeting their needs - a novel concept in the region. Moreover, the project aims to build a broader entrepreneurial ecosystem in The Bahamas by fostering stakeholder partnerships and collaborations.”