Monday, November 15, 2010

Russia’s Bizarre Demographics: A Health Crisis

Nicholas Eberstadt has produced an excellent article in the November/December, 2010 issue of “Foreign Affairs.” In The Demographic Future he couples demographic projections with economic growth projections. His product is laden with interesting tidbits and insights. Perhaps the most intriguing involved Russia. His description almost conjures up the image of a country regressing backwards in time and history.

Given its wealth in natural resources, and its current state of development, Russia would normally be expected to have high single digit growth rate of GDP into the foreseeable future. That is the official Russian outlook. Eberstadt points out that it is hard to envisage such a long-term growth period proceeding given the demographic trends that currently exist.
“But these ambitious visions seem to ignore the fact that the country has been in the grip of a protracted demographic crisis since the end of communist rule. Since 1992, Russia's deaths have outnumbered births by roughly 50 percent, or about 13 million, and official figures suggest that the country's population has shrunk by about five percent -- nearly seven million people -- from 148.6 million in 1993 to 141.9 million today. Immigration has helped slow the country's population decline but has not been able to prevent it. The outlook is for further depopulation: medium variant projections by the Kremlin's official statistical service envision ten million more deaths than births over the next two decades.”

“In 2009, as hard as it may be to believe, Russia's overall life expectancy was a bit lower than it had been in 1961, almost half a century earlier. To make matters worse, at least from an economic standpoint, Russia's health crisis is concentrated in its working-age population. Over the 40 years between 1965 and 2005, for example, the death rates for men between their late 20s and their mid-50s virtually doubled. Death rates for women in that same age group generally rose by about 50 percent. Public health experts do not entirely understand the reasons for this death spiral -- although poor diet, smoking, sedentary lifestyles, and, above all, Russia's deadly romance with vodka can explain much of the deterioration, the actual decline is worse than what these risk factors alone would suggest. In some respects, contemporary health levels for Russian adults are akin to those for adults in the world's most impoverished states. According to estimates by the World Health Organization, life expectancy for a 15-year-old man in 2008 would have been lower in Russia than in Cambodia, Eritrea, or Haiti.”
One basis for healthy economic growth is a ready supply of talented—and healthy—workers.
“Between now and 2030, the U.S. Census Bureau projects that Russia's working-age population will fall by nearly 20 percent, and Russia's work force will almost surely suffer more ill health than its counterparts in the OECD and than the work forces of the other BRIC countries (Brazil, India, and China). In 2008, according to World Health Organization estimates, mortality levels for Russia's working-age population were 25 percent higher than those for India's.”
Another curious feature noticed by Eberstadt was the unusual trend counter to urbanization.
“Urban centers are typically the hubs of economic growth, but Russia's urban population is smaller today than it was at the end of the communist era, and the UN projects that there will be even fewer inhabitants in Russia's cities 20 years from now.”
Given all these bizarre trends, one might be tempted to consult the science fiction literature for possible explanations. Nevertheless, the conventional wisdom assumes a more prosaic explanation: when you combine dreadful health habits with a dreadful health system you obtain dreadful results. A concise summary of this point of view is provided here.
“During the Soviet era, the health care system was highly centralized, wasteful, and inefficient. Despite the inefficiencies of the system, health care for patients was free—unlike the current system, which is inefficient and costly. The focus for the old system was on numbers, which frequently meant that patients were hospitalized unnecessarily and stayed longer so that the hospital could reach its quota. The inefficiencies of the system were fully exposed during the break-up of the Soviet Union, when the entire health care system virtually collapsed. The transition period was marked with a decline in health throughout the population due to stress, uncertainty, and poor diet. Increased demand for health care was unmet.”

“When Russia reformed the health care system, a monetized system was implemented. In order to function properly, this system required a free market economy, which was at the time just being constructed. Government contributions to the system have always been inadequate; patients are still having difficulty affording medications. Facilities often lack the most basic equipment, and providers of free services are forced to charge patients for care in order to keep their facilities open. Corruption and bribery are endemic to this system, which has the greatest negative impact on the poor and those who most need the care.”
Yet one more interesting tale unfolding. Stay tuned!

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