Norway Is Great For Older Folks — And So Are Bolivia And Rwanda

By Roff Smith

Published October 3, 2014 at 12:25 PM EDT

Bolivia is one of the poorest countries in the Western hemisphere, but its senior citizens all benefit from a guaranteed pension.

News that Norway has been rated the best place in the world to live out your old age is hardly a shock. Scandinavian countries always sit at or near the top of surveys of the world's cleanest, richest, safest places.

Nor will it come as a surprise to learn that war-torn Afghanistan occupies the bottom of that same list, finishing 96th out of 96 countries surveyed in the second annual Global Age Watch Index. That makes it the worst place in the world to grow old — assuming you are even able to do so.

But how is it that Bolivia (51st), one of the poorest countries in the Western hemisphere, gets a better grade than Russia (65th), Greece (73rd), Turkey (77th) and many Eastern European countries when it comes to the well-being of its senior citizens?

And why does Rwanda — 86th on the list — outscore the U.S., Britain, Denmark, Japan and a host of other rich Western nations when it comes to providing an "enabling environment" for its old people, one of four criteria used in the rankings. (That term is used to cover the sense of security older people felt in their surroundings and the ability to call on others if they needed help.)

"There are some very useful lessons the world's richer nations could learn from some of the poorer ones, especially in Latin America," says Asghar Zaidi, professor of international social policy at Britain's University of Southampton, who developed the index.

The index highlights challenges facing policymakers in a graying world, where the population of older people (defined as anyone over 60) is already 868 million and expected to top a billion within 10 years and 2 billion by 2050.

Roughly 80 percent of those 2 billion senior citizens will be living in low- to middle-income countries — countries where, at present, fewer than one-fourth of older people receive any kind of pension or income support.

Latin American countries have been particularly swift at coming up with solutions. "There has been a rapid expansion in taxpayer-funded universal pension schemes over the past 10 years," says Zaidi. "Everybody is automatically covered, rich or poor, so whatever happens, when you are old you will have at least a basic income. Mexico [30th] and Peru [42nd] are prime examples."

When this guaranteed pension is coupled with Latin America's strong traditions of national health care, notes Zaidi, two of the key criteria of a successful old age are covered. "So although they may not be wealthy, places like Mexico, Peru, Bolivia are punching well above their weight when it comes to looking after their senior citizens."

The survey rankings are based on four criteria: income security, health, personal capability (the ability to do things independently) and enabling environment. The big surprise in the latter environment category was Rwanda, which came in at 13th — ahead of far wealthier countries like the U.S. (17th), Japan (21st) and Denmark (14th).

"This is a subjective category of course, but in the survey elderly Rwandans had a high level of positive responses to questions about security, going out and doing things and the ability to call on family and friends," says Zaidi. "On one particular question, when it came to walking the streets at night, older Rwandans actually felt safer than the elderly in Britain."

Street safety isn't everything. A secure income is "the key initial catalyst" for older people, says Zaidi. "Other things follow on from there."

Governments may feel that the ever-growing elderly population makes it impossible to provide pensions. Zaidi says a major rethink is in order. "Today's older people need protection and empowerment," says Zaidi. "For future generations the focus must be on providing opportunities for employment during their working lives and better mechanisms to build resilience for old age."

The idea, he says, is to think of these pension schemes as investments and consider the long-term benefits of such schemes. Younger generations are freed from the burden of looking after parents and grandparents, and the elderly gain independence, spending power and the ability to save.

The effects are felt throughout the economy. Since Bolivia introduced its universal pension in 2008, the country has experienced a 16 percent rise in household income, a 15 percent increase in consumption and a 14 percent reduction in poverty.

Last year, Sweden celebrated the 100th anniversary of the establishment of its universal pension system. "It was put in place at a time when Sweden would have been what we would call today an 'emerging economy,' " says Zaidi. Perhaps someday Bolivia will be envied as well.