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| SOLIDARITY BETWEEN GENERATIONS ACROSS BORDERS |
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A question that, demographic
data in sight, Europeans (and Italians in particular) are starting
to ask themselves is, "who will pay tomorrow for the pensions
of present-day workers?" A related question is, "apart from
funding, who will produce the goods and services required by tomorrow's
pensioners?" The idea that the emerging countries may play an important role in sustaining and in supplying goods and services to rich countries' pensioners dates to the early '90s. Emerging countries have young populations, who will be fully productive for many decades. In them capital is scarce and therefore an investment there is (if well managed) more productive than a corresponding investment in developed economies where labour is the critical resource. This evaluation has produced a big capital outflow from rich to developing countries. The outflow started at the beginning of the '90s and reached a peak in 1996. The financial crisis of 1997 (East Asia), 1999 (Russia), and 2001 (Argentina) have slowed but not reversed this phenomenon. In facts they have matured it: the flows are reduced, but they are less speculative and more long-term-oriented, channeled through arrangements (such as direct investment) that require more management effort but produce durable effects. The long-term growth potential for the developing economies is intact, and the crisis of recent years have often triggered reform and political growth, that is, better long-term prospects. In developed countries demography is compromising the "pact between generations" which lies at the foundation of today's pension system. A "social pact between countries" whereas a part transfers capital and know-how and gets in exchange security, and the other receives durable progress and pays for it with its own work, is at the very least a road to be explored to contribute to solving the pension problem. |
Choosing Globalisation I How To Contact Us