Tuesday 18 December 2012

Without babies, can Japan survive?

By Alexandra Harne, Published The Straits Times, 17 Dec 2012

THE first grade class at the elementary school in Nanmoku, about 137km from Tokyo, has just a single pupil this year. The local school system that five decades ago taught 1,250 elementary school children is now educating just 37. Many of the town's elegant wooden homes are abandoned. Where generations of cedar loggers, sweet potato farmers and factory workers once made their lives, monkeys now reside. The only sounds at night are the cries of deer and the wail of an occasional ambulance.

Nanmoku's plight is Japan's fate. Faced with an ageing society, a depopulating countryside and economic stagnation, the country has struggled for decades to address its challenges. As Japan went to the polls yesterday in parliamentary elections that will most likely mean the seventh prime minister in six years, voters need to demand that politicians address the most important issue of all: the low birth rate.

Sadly, this issue was hardly discussed on the campaign trail. Instead, parties were promising to lavish more money on special interests like construction companies, the main beneficiaries of public works spending.

Nowhere is the rapid ageing of Japan more visible than in rural towns like Nanmoku, where 56 per cent of residents are over 65. Over the next 25 years, the proportion of Japan's population that is elderly will rise from almost one in four to one in three. Sales of adult diapers will soon surpass those of baby diapers.

The reason for Japan's plight stretches back decades. The countryside lost people to the cities during Japan's era of rapid growth between the early 1950s and the late 1980s. The population in rural areas continued to decline even after the country's growth began to slow in the early 1990s.

To secure the rural vote, the Liberal Democratic Party, which held power almost continuously from 1955 until 2009, devoted huge amounts of the state's budget to infrastructure projects that were intended to revitalise the hinterland. But the revitalisation never occurred. Towns were left with deserted train stations, empty hot-spring resorts and extraordinary levels of debt.

Just as America has its military-industrial complex, Japan - whose Constitution forbids a formal army - has its "construction state". Public largess went to pouring concrete across the country. It's clear now that Japan should have been less focused on building bridges to nowhere and more focused on making babies.

Although Japanese couples consistently say in polls that they would like to have more than two children, they don't. Part of the problem is the country's prolonged economic malaise. Years of stagnant (or declining) incomes have made Japanese men less attractive as potential partners. And economic uncertainty has led couples to delay getting married and having children. The shortage of public day-care centres, especially in cities, has made the cost and burden of parenthood so high that couples either have fewer babies or none at all. (Japan's birth rate is just 1.39 children per woman.)

The government provides subsidised day care, but there is a long waiting list in big cities. Working parents often end up paying more to send their kids to private centres. While there is no exact global comparison, a 2009 survey by the Japanese government found that the first five years of child- rearing, including savings, cost around US$73,000 (S$89,000), more than 2.5 times as much as in the United States.

Japan could address its baby shortage by taking three basic steps that have been discussed for years but have never enjoyed sufficient political leadership to be enacted. First, the government must create more subsidised public day-care centres, which would make childcare more affordable for more people.

Second, companies must dismantle old systems that promote employees on seniority, rather than skills. These antiquated practices hold down young workers' salaries and keep the labour market too rigid. And companies should discourage overtime work so that employees have more time with their families.

Third, both the government and companies should encourage more women to enter the labour force with high-quality jobs on a par with men and offer incentives to women to return to work after childbirth. In places where these sorts of reforms have taken hold, from France to Sweden, the result has been a boost to the birth rate and the economy.

To be sure, an increase in the birth rate is no quick fix. Even if Japan were to increase its birth rate next year, it would take at least a generation before the country began to tackle its demographic imbalances.

The only shortcut would be a significant increase in immigration, a deeply controversial subject in Japan. Conservative politicians and right-wing groups are opposed to bringing in more workers from overseas, and some Japanese worry that foreigners would not assimilate well.

The lesson of Nanmoku is that spending one's way out of a crisis doesn't work without reforms that address the root causes of the malaise. Until Japan's leaders take steps to boost the birthrate, the whole country - like the countryside - will continue to shrink.

The writer is an international affairs fellow at the Council on Foreign Relations. She is based in Japan.


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