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Pension age needs to be raised in Russia - expert

MOSCOW, August 24 (RIA Novosti) - The head of Russia's statistics service suggested Thursday that the age of retirement should be raised, arguing it would prolong life expectancy in the country, which is facing a severe demographic crisis.

"Russia is one of the three [post-Soviet] countries, including Belarus and Ukraine, which has not changed its retirement age," said Vladimir Sokolin, chief of the Federal State Statistics Service.

"I believe raising the age of retirement is inevitable. I do not know when we will launch the reform, but this will probably have to be done," he said.

The retirement age in Russia today is 60 for men and 55 for women, one of the lowest in the world.

A number of European countries have already raised or plan to raise the retirement, arguing the number of retirees was increasing rapidly and pension systems are too expensive.

But Sokolin said average life expectancy among men in the country was 57 years, compared with 60-65 years in Soviet times.

Sokolin said if current demographic trends persist in Russia into 2007, the employable population will shrink by 1 million people annually and the shortage of workforce will evolve into an even more serious problem.

The birth rate dropped by 5,000, to 715,000, in the first half of 2006, compared with the same period last year, although the death rate declined somewhat, Sokolin said.

He said the birth rate has declined partly due to women's increasingly important role in society and business, a trend also shared by many developed countries.

But for Russia to ensure a simple population replacement level and maintain its vast territory, women must give birth to 2.13 babies (213 children for every 100 women).

Russia's demographic problems were highlighted in an annual state of the nation address May 10 by President Vladimir Putin, who instructed the government to give women at least 250,000 rubles ($9,200) each as financial aid following the birth of a second child as one way to relieve the problem. Payouts will start by 2010.

Sokolin hailed the move, but said it will not produce an immediate effect. He suggested attracting a foreign labor force, following the example of European countries.

The 2007 budget will earmark $1-1.5 billion on other efforts to improve the country's demographic outlook, including a "maternity certificate" entitling mothers to additional free prenatal and natal care in clinics and hospitals.

The money will also include allocations for foster parents, childcare financing for nursery schools, and additional funds to raise birth allowances to $55 - a substantial sum given that the mayor of Moscow raised the minimum public sector wage in the capital to $150 at the beginning of this month.

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