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Romania: Poverty Compounds Population Drop (Part 4)

Romania's population has been slowly but steadily declining since the collapse of communism in 1989, owing to a combination of factors such as declining birth rates, higher mortality, and emigration. These factors are a result of the country's chronic poverty, high unemployment rates, and crumbling health and social security systems. Despite a slowdown in the decline over the past several years, the negative trend is expected to continue -- putting more pressure on an already weak economy. RFE/RL correspondent Eugen Tomiuc reports in this fourth of a five-part series.

Prague, 19 October 2001 (RFE/RL) -- With some 22.5 million inhabitants, Romania ranks among the more populous countries in Central and Eastern Europe.

However, like most other former communist states, Romania has experienced a steady population decline since the collapse of communism, amid growing poverty, rising unemployment, and social turmoil. A disintegrating healthcare and social security system also accelerated the process -- the first peacetime population decline on record in Romania.

In the 11 years since the fall of communist dictator Nicolae Ceausescu's regime, Romania's population has shrunk by at least 415,000 people. The main factors behind the decline are high mortality rates, low birth rates, and massive emigration.

Despite a slight slowdown in the negative growth over the past few years, the decline continues and there are few indications of a reversal.

Already poor in 1989, Romanians over the following decade only grew poorer compared to a majority of their Eastern European neighbors, due to difficulties in implementing market reforms.

With an average monthly income of about $100, Romania remains of the poorest countries in Europe. The benefits of slight economic growth this year have yet to be seen by most poverty-stricken Romanians.

Professor Vasile Ghetau, one of Romania's leading demographers, says only economic growth and sound social security policies can stop the population decline: "There is only one way out of this situation: an improvement in the economic and social situation. That would mean creating the resources to counter the negative effects of the process."

Birth rates between 1990 and 2000 have declined, by almost 6 newborns, to about 10.4 per 1,000 inhabitants.

Fertility rates also dropped from more than 2.2 children per woman in 1989 to 1.3 last year. In order to maintain the current level of population, fertility rates must be at a minimum of 2.1 children.

Compounding the problem is the fact that Romania still has one of the highest death rates in Eastern Europe -- excluding the CIS countries -- after Bulgaria, Hungary, and Estonia.

An overall death rate of 11.4 per 1,000 inhabitants was reported in 2000, marking a slight increase compared to 10.5 in 1990 -- after a 12.7 peak in 1996.

In Romania's case, an additional cause for the sharp population decline was the 1989 abolition of Ceausescu's policy of forced birthrate growth.

Contraception and abortion had been illegal during communism, which caused significant social side effects. As a result of clandestine abortions -- often performed under dangerous conditions -- many women died and some doctors were jailed.

Professor Ghetau says the restrictions had a considerable psychological impact on women, and that once the ban was dropped, the decline in birthrates was much sharper in Romania than in other former communist countries.

"This is also the former regime's inheritance. One should not forget that Romania had a very tough -- even brutal -- population policy that resulted in restricted or even prohibited access to contraceptives and abortion. Once this legislation was abolished in December 1989, it was obvious that the birthrate would decline."

Women apparently benefited from free access to contraception and abortion, for female life expectancy -- one of the lowest in Europe during communism -- grew over the last decade by more than two years to almost 75 years in 2000.

Male life expectancy also rose by more than one year, to almost 68 years in 2000, after an abrupt decline in the first half of the 1990s due to an overall increase in unemployment, poverty, alcoholism, and crime.

Economic migration is another main cause behind Romania's population decline, and accounts for some 230,000 people -- or more than half of the estimated population drop -- over the last 11 years.

Emigration was primarily caused by growing unemployment in industry. Many of the Romanians to leave have settled abroad permanently and do not intend to return.

Legal emigration has declined substantially in the last three years and accounted for only 4,000 people in 2000. But an increasing number of those who leave the country are young, better-educated professionals who are likely to obtain better-paid jobs abroad.

Official figures on illegal emigration from Romania to Western Europe are unavailable, but are believed to be high.

Internal migration is also on the rise in Romania, but instead of the traditional flow from rural regions to more developed urban areas, it is traveling in the reverse direction.

In the early and mid-1970s, at the peak of communist industrialization, hundreds of thousands of villagers were encouraged to move to cities and towns and become industrial workers in huge state factories.

But many of those workers -- who have since lost their jobs and were facing the growing cost of living in cities -- returned to the countryside, where they survive by practicing subsistence farming.

Romanian sociologist Dumitru Sandu says this trend in Romania is cause for alarm. He says that such reverse internal migration signals an increase in poverty: "It is the reverse migration -- from cities to villages -- that causes concern. Currently, the reverse migration from city to village accounts for more than 35 percent of the total internal migration. This reverse migration actually means deepening rural poverty."

Over the last decade, Romania's successive left and center-right governments have been unable to come up with effective measures to counterbalance the population decline amid growing poverty and a near collapse of the health and social security systems.

The current social democrat government of Prime Minister Adrian Nastase, which took over last December, has so far done little to stimulate family growth.

A monthly child allowance is one of the few incentives the state offers to families with children, but its level amounts to only 4 percent of the average income.

Mihail Ciulcov, a deputy minister in Romania's Labor and Social Solidarity Ministry, says the government intends to increase that level to 10 percent over the next three years: "Currently, the value of the child benefit is 130,000 lei ($4.50) per month per child, and for disabled children the amount is double. Between 2001 and 2004, our government plans to increase the value of child benefits to 10 percent of the average salary ($10)."

With a median age of less than 35 in 2000, Romania's population is relatively young compared with that of Western Europe. Median age is expected to rise to 43 by 2005.

However, because of the declining birth rate, the age profile is changing. This will result in an increase in the old-age dependency ratio -- that of retired people to the working population -- which is expected to increase from 19 percent last year to 21 percent in 2005. While the ratio is still lower than in Western Europe, Romania's economy -- with a per capita gross domestic product of only some $1,700 -- can barely sustain even a slight increase in the number of pensioners.

Confronted with the perspective of an aging population and with fewer resources to fund health and social security programs, the current government earlier this year (April) came up with a new law on pensions and social security, which provides for a gradual increase in the retirement age over the next 13 to 15 years. Deputy Minister Ciulcov says the limit will grow gradually from the current retirement ages -- 62 for men and 57 for women: "According to this law, in the next 13 to 15 years, retirement age will be 65 for both men and women."

Under the new law, employee contributions to social security and state pension funds rose from 5 percent to almost 12 percent, with the rest being paid by the employer.

However, the efficiency of the new pension scheme is questionable, since many state companies in the past failed to pay their social security contributions to the state budget -- with total arrears amounting to hundreds of millions of dollars. Faced with extra pressure on an already strained budget, the government has made debt recovery one of its main targets.

Analysts believe that setting up private pension plans -- a feasible alternative to state-funded pensions in many Western countries -- would be an adequate long-term approach that could ease the financial strain on former communist states and stimulate investments in economy.

But for private pension funds to work, clear regulations and a stable economy are needed. Romania has neither.

Fiona Mullen, an expert on Southeastern Europe for the London-based Economist Intelligence Unit (EIU), believes that Romania's weak economy and low income levels will make setting up private pension funds particularly difficult: "I think the only thing that any country could do in these circumstances [would be to] improve the regulations surrounding [private] pensions, and in the longer term it is not easy to set up private pension assistance when Romania's economy is not always the most stable."

The government is currently working on a bill on private pensions due to be discussed in parliament next year. But it is unclear how Romanians will regard private pensions, since two of the country's biggest financial scandals in recent years involved fraudulent investment funds in which thousands of people lost their savings.

Along with the aging population, experts also foresee a change in the future social fabric of the country, as only 5 percent of newborns over the past several years belong to women with average or higher education.

Scientists and politicians alike point out that in the absence of a sustained economic recovery, little can be done to reverse Romania's population decline -- or quell the alteration of its social structure.