This week’s spotlight is on demography – a prolonged crisis that politicians seek to address by allocating more funds to various family support programs. “More money for demography” has also been one of the government’s arguments when justifying the need for budget cuts. But will larger budget allocations actually increase the birth rate? BNN asked political scientist and co-owner of the communications firm Mediju tilts, Filips Rajevskis.
“It’s important to understand that there is not a single European country where demographic issues have been solved with money. There is no European country where demographic problems have been resolved without migration. It’s hypocrisy to claim that now we will solve the demographic problem with financial support,” Rajevskis said.
It has been suggested that Latvia’s biggest security threat is the collapse in birth rates – raising the question of whether resources for solving demographic issues should come from the defense budget. “It’s wrong to mix defense with demography,” Rajevskis argued, pointing out that defense is defense. “But since that’s 5% of GDP, of course, everyone wants access to that money.”
Answering BNN’s question on whether more kindergartens, housing programs for families, lower taxes, higher family benefits, and other support measures could boost the birth rate, Rajevskis remained skeptical, pointing to Estonia’s example.
“Family allowances there are higher, Estonians are more generous, but nothing has really been solved.
Historically, we always say – look at the Estonians, they’re doing great – but in tackling demography, they haven’t gone further than us. In the modern world, no country has provided an answer to this question.”
Both President Edgars Rinkēvičs and Prime Minister Evika Siliņa have acknowledged demography as one of the country’s top priorities, but there is still no clarity on where the money will come from. On the one hand, austerity measures are being considered to find the necessary millions. On the other, the Prime Minister has already partially backtracked by saying that the government never committed to cutting €800 million in spending – that was an expectation raised by businesses.
How should all of this be understood? Rajevskis explains that this is simply the budget-making process, with all the usual debates about reallocations and shifting money from one “pocket” to another. “Calling it an austerity regime would be very premature. This is not austerity – it’s the budget process, where money gets shuffled around in Excel sheets. No one is planning to actually save, because we only cut spending when there is a major crisis. We are incapable of saving when there isn’t one. And since there isn’t one now, we are simply moving toward trouble,” Rajevskis concluded.
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