February 23, 2005 2:00 am
The future has arrived slightly quicker than expected in Japan, with the news that last year, for the first time since records started in 1950, the country's male population fell. The decline was fractional, and could be totally attributed to more men moving out of, rather than into, Japan, probably because of company transfers. Nonetheless, this was a demographic outcome waiting to happen because of the country's falling birth rate, which set a record low in population growth of only 0.05 per cent last year. Japanese experts are now predicting that next year will see the first decline in the country's overall population.
The shrinking of the workforce and the swelling number of pensioners is a trend occurring across many developed, and some developing, countries. Indeed, thanks to its one-child policy, China is forecast to see the ratio of working age people to pensioners collapse from more than 6:1 in 2000 to fewer than 2:1 in 2050 as that country ages faster than any other in history.
But the drama for Japan is that it is in the van of this movement, and therefore first to face its consequences. The most obvious are for Japan's fiscal situation. There will be fewer workers to shoulder pension costs and the burden of government debt. However, the economy is in no position to sustain serious tax increases. So the solution must be found elsewhere.
Demography will itself hit the growth rate, which is a multiple of a country's population and productivity increases. However, a fall in the first of these factors could be offset by higher growth in the second. And Japan does have scope to increase productivity, especially in the domestic services sector, which outside bodies and experts are constantly telling Tokyo should be further deregulated.
If Japan were to adopt Scandinavian-style policies that cater for working mothers, it could raise both its female worker participation and birth rates. If it cannot, however, it may have to relax one of the world's most restrictive attitudes towards immigration.
But, provided it does not trigger irreversible social implosion, a declining and ageing Japanese population should not be regarded as a tragedy. An easing of population pressures in the crowded Japanese island chain would benefit the planet. It might also help Japan meet its Kyoto emission targets. Nor, in the shorter term, is it clear that the Japanese economy would suffer. Some economists argue that consumer demand would be sustained by the fact that the working population will remain stable for a fair number of years after the overall population starts to decline and by the propensity of swinging singles and childless couples to splash out on consumer goods.
Finally, it might reassure those of Japan's Asian neighbours that are still nervous about the thought of a revival of Japanese nationalism. It is hard to be too worried about such militarism if the samurai are getting greyer and fewer in number.
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