Guest Article: Renta Dignidad

Written by guest contributor Fiona Clark, HelpAge International, La Paz.

April 2008

Bolivia

Bolivia is South America’s poorest country, with 29% of the population living on less than a dollar a day and a large proportion of the population working in the informal sector with no secure income, benefits or opportunities to save. Bolivia’s older population is on the rise with 7% of its population over the age of 60 (2001). However, in increasing numbers of rural municipalities in the Departments of La Paz, Oruro, Potosi and Cochabamba this percentage increases to between 15% and 20%. These municipalities also have very high levels of poverty. Approximately 59% of those over 60 in Bolivia live on less than. US$1 per day, with figures significantly higher
among the rural population.

Policy measures such as non-contributory pensions and health care are therefore important in the survival strategies of many older people and their families. Bolivia is the only country in Latin America to have a universal non-contributory pension. Introduced in 1996, the Bonosol was a social programme resulting from the privatization of Bolivia’s utility companies and provided an annual pension of Bs1800 (then US$220) to every man and woman over the age of 65. Even though the amount is small and the money was paid only once a year, it had a tremendous impact on improving the quality of the lives of the older people. The Bonosol helped to generate economic activity, contributing to the incomes of the entire family, especially for vulnerable children in the care of their grandparents.

The dwindling resources of the privatisation fund left Bolivia no choice but to make changes to the Bonosol. In November 2007 Bolivia’s President Evo Morales introduced the Renta Dignidad, moving its financing source to the hydrocarbons tax, reducing the eligible age to 60 and increasing the amount of the pension to Bs2400 for those without any pension whilst maintaining the amount of Bs1800 for those with some kind of contributory pension. The other important change is that the pension can now be paid monthly, giving older people a more regular and lifelong secure income source from which to support their livelihoods and continue contributing to the family economy. 

These changes reflect the demands made to the government by representatives of the National Association of Older People, who pushed for these policy changes through a series of consultations with their base organisations and a series of dialogues with representatives of the government. This acquired right is a coup not only for older people in Bolivia, but in Latin America as a whole, where most countries tend to combine a small pillar of non-contributory pension with various contributory mechanisms. Peru has no noncontributory pension at all, leaving 70% of its older population without any income support. Bolivia is therefore exemplary in the region and the government of Mexico City recently invited Bolivia to share its experience to see if it could be replicated
there. 

Challenges remain, however, including diversifying the Renta Dignidad’s funding base, which relies heavily on the current high international oil and gas prices as well as on the good will of departmental and local governments to assign the relevant funds. Many older people still lack identity papers or have incorrect papers, and are not registered in the database to receive this benefit. Furthermore, the military are currently the delivery mechanism to rural areas, something that in the long term should be replaced with better banking infrastructure and new technologies to ensure easy access to poor rural older people.

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