Demographic Time-bomb

 

Amidst the falling fertility rates, mitigating the negative effects of demographic changes is one of the major concerns that nations are facing. In fact, there is little that they can do to reverse or even slow the ageing population over the coming decades.

The structural changes that took place over the last 50 years combined with remarkable advances in health care and family-planning technology have led to lower fertility in most populated countries. In fact, as economies grow richer, falling birth rates are common phenomena. Accordingly, many European nations are experiencing below the level needed to keep population a stable. Amidst 30-year-old one-child policy, the world’s most populated country (a fifth of the world’s population lives in China) which is near its peak is also ticking demographic time bomb with armies of young rural workers congregating to its factories.

Japan, Asia’s forerunner of ageing and sinking population where almost a quarter of people is over 65 while children make up just 13%. Against these troublesome figures, National Institute of Population and Social Security Research warns that Japan’s population of 127 million will by 2055 shrivel to 90 million, its level when it kicked off its post-war boom in 1955. Even Russia is facing broader demographic challenges as Russian statistics paint a horrifying picture on this subject against the present population of 140 million. Similarly, most Asian countries are experiencing falling birth rates. China now has 1.6 births per woman, Singapore has 1.2 and South Korea has slightly less than 1.1. Taiwan has just 1.03 births per woman. On the other hand, the adverse affects of demographic imbalance in the Middle East are also worrisome.

Unintended Consequences

The ever changing demographic trends causing growing social welfare burden, especially the economies which are facing a debt-to-GDP ratio nearing 200% the rich world’s highest. Experts warn that exclusive of structural changes in old-age related government spending, a rapidly greying society will lift expenditures. This, in turn, frightens to weaken the sovereign ratings on Japan in the long term.

To counter the upcoming societal doom, experts suggest that nations need to allow more immigration. However, governments from Singapore to Tokyo have been reluctant to do so. Singapore’s government moved a step ahead and put on match-making events for university graduates on the basis that best and brightest could be cajoled into producing a generation of brainy offspring, but hardly ever with great success. With the model in social engineering has failed to bring a baby boom in many nations, bureaucrats across the Asia have sought to squeeze policies and tax codes to get more couples in the mood. However, experts say the crux of the problem have been gender attitudes steeped in Confucian traditions -with men still expecting their wives to handle the childcare and household chores that may not top a modern woman’s wish list.

Is there a Solution?

Prima facie, there is no solution for the demographic bomb at least in near future as women make difficult choices between careers and motherhood. Although most people are aware of the threat that silent playgrounds and empty classrooms bother for their greying societies, but they remain improbable to rush to their bedrooms to help avoid societal doom. Are policy makers are watching ticking demographic bomb?

Tags: Demographic Time-bomb: Societal Doom, Aging Population

N Janardhan Rao, Senior Economist.