Russia with aging population looks toward India for sourcing skilled manpower

NEW DELHI: In news headlines for about two months due to the ongoing war with Ukraine, Russia has been grappling with the issue of its aging population resulting in a decline in the working-age population.

However, for Russia, India – an all-time ally nation, is a potential source of skilled manpower.

Much before the war broke out, Russia authorities were in talks with India through the latter’s union ministry of skill and entrepreneurship for exploring possibilities to source skilled manpower for deploying it in sectors such as petrochemicals, coal mining, wooden carpentry, agriculture, construction, etc.

India has already proved itself as an excellent source of manpower for the middle-eastern region, and it is starting to send its skilled trainees under TITP (Technical Intern Training Programme) to Japan also with a moderate start.

It’s widely known a fact that India and Russia (and the erstwhile USSR), have been partners in progress and their bilateral cooperation goes back into defense, petrochemicals, agriculture and many other sectors for over decades. The USSR has been supporting India on all international platforms at the UN level as well as during border conflicts with Pakistan and China.

And India’s stance during the current Russia-Ukraine war also is evidently tilted towards Russia only.

However, Russia’s demographic mix has been stressed for the past couple of decades. The number has further skewed with Russia losing its soldiers in the war against Ukraine, and it has raised the eyebrows of the Putin administration.

As per a World Bank report “Searching for a New Silver Age in Russia – The Drivers and Impacts of Population Aging”, over the next few decades, Russia’s population is expected to age significantly.

It states, “Some of this aging will be due to the increasing life expectancy, which is a significant achievement. However, this trend, together with low fertility and the retirement of large numbers of people born in the 1950s are expected to reduce the working-age population by as much as 14 percent over the next 35 years.

A decline in Russia’s working-age population will certainly pose serious social and economic challenges – but it can also offer important opportunities.”

This World Bank report further states, “A decline in Russia’s working-age population will certainly pose serious social and economic challenges – but it can also offer important opportunities.”

Like many other countries in the world – Canada, Finland, Sweden, GCC Countries, South Africa, Austria, Germany, and UK where the population is aging and the workforce is on the decline, Russia is also looking forward to India to source huge skilled manpower in sectors such as petrochemicals, coal, wooden carpentry, agriculture, construction, etc.

According to highly placed sources, the Indian union ministry of skill and entrepreneurship has been in touch with Russia through its embassy and has also shared a draft plan as well as a prototype of a memorandum of understanding last year.

However, language being the barrier on both sides, the matter progressed at a snail’s pace. Also, the number of skilled workers required for Russia was yet to be decided by both the sides.

Excerpts from the World Bank report “Searching for a New Silver Age in Russia – The Drivers and Impacts of Population Aging” 

Pessimistic forecasts about the impacts of aging often assume that current behavior and institutions will continue unchanged in a future, older society. For example, since the early 1990s, increases in the working-age population have accounted for about one third of the growth in per capita GDP. Over the next few decades, without changes in individual behavior and government policies, a rise in the dependency ratio could reduce growth by 2 percentage points per year.

One important channel is savings, which could plunge if lifecycle-based savings rates remain unchanged as Russia’s population ages. Aging could also substantially increase spending on health care and pensions, leading to protracted deficits that boost today’s debt-to-GDP ratio of 20% of GDP to over 100% by 2050.

A more optimistic view is that individuals and firms will adapt to aging, and that policies can promote and speed up this adaptation process. Adjustments to policies and behavior could markedly reduce the impact of aging on savings, labor force participation, growth, fiscal accounts, and the incidence of disease. Individuals who expect to live longer could save more and work longer, in anticipation of a longer retirement.