The Economist has provided another very interesting piece about a story that I think gets less coverage than it should be receiving: the slow, steady, inevitable (?) implosion of Japanese society. I don’t think that saying that is being melodramatic, what else does one call a society which has a population that has been shrinking for the past decade (in a time of historically-unheard peace and prosperity!) and shows no sign of stopping that decline? Does this population decline not show a lack of confidence in the society’s future prospects and a lack of interest or desire in propagating that society? Shouldn’t this news story be more closely followed elsewhere since: a) Japan is the third-largest economy in the world; b) Japan is in a very worrying diplomatic conflict with the world’s second-largest economy; and c) Japan is the canary in the mine for many other western nations. How will these other nations fare with declining birth rates, populations and tax bases? Look at the Japanese example.

However, as is explained in the article in the Economist, the major difference between Japan and most other countries is the homogeneity of its people and the lack of large-scale immigration.  This means that the population decline problem is not being remedied by importing new citizens. Thus, last year the Japanese population declined by a record amount: 244,000 people and this shrinking population is declining faster than any other in the world.

“More than 22% of Japanese are already 65 or older. A report compiled with the government’s co-operation two years ago warned that by 2060 the number of Japanese will have fallen from 127m to about 87m, of whom almost 40% will be 65 or older.”

At the moment, roughly 2% of the Japanese population is foreign. And this includes large numbers of permanent residents—mostly Chinese and Koreans—who have been here for generations. So any attempt to reverse the population decline by bringing in foreign workers and taxpayers will be novel and is bound to ruffle some feathers in Japanese society.  However, regardless of these hurdles, the Japanese government is being forced to look into all options:

“The government is pointedly not denying newspaper reports that ran earlier this month, claiming that it is considering a solution it has so far shunned: mass immigration. The reports say the figure being mooted is 200,000 foreigners a year. An advisory body to Shinzo Abe, the prime minister, said opening the immigration drawbridge to that number would help stabilise Japan’s population—at around 100m (from its current 126.7m).

But even then there’s a big catch. To hit that target the government would also have to raise the fertility rate from its current 1.39, one of the lowest in the world, up to 2.07. Experts say that a change on that scale would require major surgery to the country’s entire social architecture.”

So the Abe government’s strategy is to lift the fertility rate by 50% and to massively increase the number of immigrants Japan accepts each year. Both of thee measures would help I’m sure, but how realistic is it that they will be implemented?  How do you boost such anaemic fertility rate numbers?

“Mr Abe has invoked Ms Matsui [Kathy Matsui, chief Japan equity strategist at Goldman Sachs in Tokyo] in his quest to boost the birth rate. Progress towards bringing women into the labour force is far from assured however. The latest Gender Gap Report, compiled annually by the Davos-based World Economic Forum, ranked Japan 105 out of 136 countries, down 25 places from 2006. (South Korea—another country with a fertility crisis—does even worse, coming in at 111th place.)

The looming crisis has so alarmed Japan’s government that in 2005 it created a ministerial post to raise fertility. Last year a 20-member panel under the ministry produced a desperate wish list to reduce what it calls “deterrents” to marriage and child rearing. It included a proposal to assign gynaecologists to patients on a lifelong basis and even to provide financial support for unmarried Japanese who undertake “spouse-hunting” projects.”

The last one seems interesting – does this mean that young Japanese are being paid to go clubbing on Friday nights??? It has to do something however, because without raising its fertility rate, Japan would need to attract about 650,000 immigrants a year according to UN estimates. The problem is certainly acute however, and maybe the pressure will eventually start to shift societal attitudes to both immigration and procreation.  According to the Economist:

“Last week the government passed the nation’s largest-ever budget—a mammoth $937-billion package swelled by welfare and pension spending. Japan is already weighed down by one of the world’s largest public debt burdens. With its inverted population pyramid, where will it find the tax base to repay this debt, and to care for its growing population of elderly?”

Two years ago the Japanese government announced that without any changes in policy (or societal attitudes one would guess) Japan’s population would fall to 42.9 million by 2110.  It may be that Japan could learn to deal with that:

“But that might mean also embracing a much diminished economic and political role in the world.”

It would mean that the nation would not be able to continue to spend like a sailor on shore leave, and that Japan might have to quietly forgo its claims to the Senkaku Islands.

Marcus Roberts was two years out of law school when he decided that practising law was no longer for him. He therefore went back to university and did his LLM while tutoring. He now teaches contract and...