Ja­pan plans to boost birth rate to spur growth

Kuwait Times - - BUSINESS -

TOKYO: Ja­pan plans to in­clude steps to raise the birth rate, such eas­ier ac­cess to child­care and tax in­cen­tives, in a pack­age of re­forms due this month to tackle the big­gest bot­tle­neck to eco­nomic growth. Ja­pan’s pop­u­la­tion be­gan de­clin­ing four years ago af­ter sev­eral years of warn­ings that the birth rate was too low, prompt­ing some econ­o­mists to ap­plaud Prime Min­is­ter Shinzo Abe’s de­ci­sion to put the is­sue on the agenda.

“I want to con­front the de­mo­graphic prob­lem head on and place par­tic­u­lar em­pha­sis on poli­cies that will con­trib­ute to rais­ing the birth rate,” Abe said on Thurs­day af­ter a cab­i­net meet­ing.

How­ever, oth­ers warn the gov­ern­ment has fallen so far be­hind on the pop­u­la­tion is­sue that it will be dif­fi­cult to raise eco­nomic growth with­out open­ing up to large-scale im­mi­gra­tion. Most coun­tries would turn to im­mi­gra­tion, but this has met with re­sis­tance from politi­cians and the pub­lic, who prize the coun­try’s mostly ho­moge­nous so­ci­ety. “There is a lack of child­care fa­cil­i­ties and im­prov­ing this is im­por­tant,” said Hiroshi Shi­raishi, se­nior econ­o­mist at BNP Paribas Se­cu­ri­ties.

“How­ever, this will not boost growth in the next five years. The more direct way is through im­mi­gra­tion.” Abe wants to raise the birth rate to 1.8 per woman from 1.42 cur­rently by loos­en­ing reg­u­la­tions on child­care providers and making it eas­ier for women to re­turn to work af­ter their child is born.

Other pro­pos­als the gov­ern­ment will con­sider are eas­ing the tax bur­den for some part-time employees and making in­ter­est-free loans avail­able for higher ed­u­ca­tion.

The idea is to pre­vent the pop­u­la­tion from fall­ing be­low 100 mil­lion from around 127 mil­lion cur­rently. Ad­vanced economies usu­ally re­quire a birth rate around 2.1 chil­dren per woman sim­ply to keep the pop­u­la­tion stable. Ja­pan’s pop­u­la­tion is pro­jected to fall around a third to 87 mil­lion in 2060, the Na­tional In­sti­tute of Pop­u­la­tion and So­cial Se­cu­rity Re­search says.

Ja­pan’s work­ing-age pop­u­la­tion peaked in the mid-1990s and has been fall­ing ever since, data from the in­ter­nal af­fairs min­istry shows. Pro­jec­tions show the labour force could shrink to 44 mil­lion in 2060, which is half of its peak.

China’s scrap­ping of its one-child pol­icy and adop­tion of a two-child pol­icy is ex­pected to boost the coun­try’s eco­nomic growth by about 0.5 of a per­cent­age point, a se­nior Chi­nese of­fi­cial said on Tues­day. — Reuters

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