Ruth Kamu is a 43-year-old market vendor from Honiara in the Solomon Islands. She earns about $690 USD per week selling peanuts at her stall in the market. Ruth is not yet of retirement age.  Even so, she became one of the first people in the Solomon Islands to open a “voluntary pension account” under a government program called youSave. This program is one of many initiatives the government launched to remedy the problem of elderly poverty in the Solomon Islands.

Elderly Poverty Rates in the Solomon Islands

As of 2012, statistics showed the elderly poverty rate in the Solomon Islands was between 27% and 32%. Since then, the population of older adults in the country has grown with about 5.6% of the population being 60 years old or older. With longer life expectancy and demographic ageing, the elderly population of the Pacific is expected to quadruple to about 2 million people by 2050.

Elderly poverty in the Solomon Islands is a major concern because they are geographically isolated. Transportation and access to physical banks are limited and the economy is mostly informal which means most seniors don’t have access to formal safety nets. This makes them especially vulnerable when resources run out. Waiting for resources to replenish puts the elderly at high risk of losing income.

YouSave Program

Older adults like Ruth are benefiting from the “youSave” program. It is a voluntary pension program the Solomon Islands Central Bank put in place specifically to help the self-employed.  Launched in 2017, it allows elderly people to have a savings account designed for their retirement.

In addition, the Solomon Islands launched its National Financial Inclusion Strategy to expand access to financial services across the country.  It focuses on digital financial access to ensure affordable, quality financial services for all citizens. It aims to make banking more accessible, reducing elderly poverty in the Solomon Islands. The Prime Minister of the islands described it as, “an important road map to improve financial access.”

What’s more, the strategy aims to develop digital marketing tools and money innovations through partnerships with the United Nations Development Program (UNDP), the International Labor Organization (ILO), government telecommunications and postal services. The strategy increases access to savings, payments and financial empowerment for people in the informal economy including many elderly people without access to a bank.

No State Pension

Because the country doesn’t have a social protection system designed specifically for the elderly, like a state pension, these services are essential to reduce elderly poverty in the Solomon Islands. Studies show, if the government were to adopt these measures, the elderly population would find themselves in much improved circumstances. An Australian government study found spending 2.6% of gross domestic product on benefits for children and older adults could reduce the Solomon Islands’ poverty gap by 21%.

In her remarks at the launch of the strategy, Australian High Commissioner to the Solomon Islands, Doctor Lachlan Strahan, said the Australian government was proud to support the strategy. “We are looking forward to seeing it being implemented and delivering safe, secure and cost-effective access to more Solomon Islanders,” she said.

Solomon Islanders no longer need to hide retirement savings under their mattresses for financial autonomy. They can save for their retirement by using “digital jam jars.”  These virtual jam jars, patterned after traditional ways of saving, help people visualize their financial resources when they don’t have access to a bank. Users Of “digital jam jars” can build up their savings and be better prepared for unforeseen circumstances or save for their future.

Conclusion

Elderly people like Ruth Kamu struggle to save for their retirement in the Solomon Islands. With the elderly population expected to grow significantly in the next several years, the government is implementing programs to help. These programs go a long way towards helping the elderly of the Solomon Islands reach financial autonomy.

– Caleb Dueck

Caleb is based in Winnipeg, Canada and focuses on Good News and Technology for The Borgen Project.

Photo: Freepik