Japan's demographic time bomb

Japan's growing population of retired people and shrinking workforce face financial problems. Thailand may face the same problems without proactive policy.

In 2009 Japan's ambassador to Thailand Kyoji Komachai wrote in the Bangkok Post on how "Thailand needs to prepare now for an ageing society" and how Japan's own efforts provide a good example of how to do this. He noted Thai-Japanese similarities:

"The present demographic situation of Thailand resembles that of Japan in the mid-80s, where the share of senior population over 60 years old exceeded 10% of the whole population. This figure is the highest among Asean countries except for Singapore (UN World Population Prospects). The same UN statistics anticipates that Thailand will reach a stage where the share of citizens over 65 years will be above 14% of the whole population in about 20 years from now." (Read article).

The Bangkok Post has featured several articles related to this topic in the past: #1 (15-07-2008) #2 (25-02-2009) #3 (04-03-2010) and #4 (25-11-09)).

Click button to listen to Ageing Japan to download

Demographic time bomb, Disasters in Japan exacerbating population and financial problems that were already causing concern by Kanana Katharangsiporn

A combination grey boom and baby bust is proving increasingly challenging to Japan, especially in the wake of the devastating March 11 catastrophe that has wreaked financial chaos and is threatening a labour shortage.

Takashi Kokubu, an associate editor at the Investigative Reporting Center of The Asahi Shimbun, Japan's largest newspaper, said the country has been facing four major problems even since before the disaster.

They are an ageing population, a decreasing birth rate, limited tax revenue and long-standing squabbles over raising taxes.

Japan's financial status was already chaotic pre-March 11, with an extra one trillion yen for social welfare needed beyond the national budget of 90 trillion. However, tax revenue amounted to less than 40 trillion yen. To meet this gap, it needed to either issue government bonds or increase taxes.

Then came the earthquake and tsunami, which will cost an estimated 10-20 trillion yen to recover from.

Mr Kokubu said Tokyo had planned to double the consumption tax rate about a year ago to 10%.

But the ruling Democratic Party of Japan (DPJ) was afraid that doing so would cost it the next election, so the move was delayed.

"Previously, Japanese media opposed the tax increase, but now all of us believe there is no choice," said Mr Kokubu.

However, the two main political parties - the DPJ and the Liberal Democratic Party - have refused to proceed with tax reform, as they both want to win the next general election.

Meanwhile, the low birth rate stems from an unfavourable economic environment that discourages starting families, said Mr Kokubu

Before World War II, Japanese men worked and women stayed at home. But then women had to start working, limiting their chances to start a family.

Many of them had to quit jobs if they wanted to have a baby, as there were no facilities such as daycare centres to watch over children during work hours.

The National Institute of Population and Social Security Research reports the proportion of children under 15 will shrink from 14.6% of the population of 127 million in 2000 to 12% in 2021, 11% in 2036 and 10.8% in 2050.

Meanwhile, those of working age (15-64) amounted to 68.1% of the population in 2000, and their proportion is expected to decline to 60% in 2020, 58% in 2035 and 53.6% in 2050.

The only clear rising trend is the aged (65 and above), who will grow from 17.4% of the population in 2000 to 25% in 2014.

The number of elderly will continue to rise while the total population drops so that in 2050 the aged will account for a whopping 35.7% of a population estimated to number only 101 million.

Shujiro Urata, an international economics professor in Waseda University's Graduate School of Asia-Pacific Studies, suggests the government provide free education through high school. Exorbitant schooling costs in Japan are another factor discouraging people from having children, he said.

"There should also be facilitators to take care of babies while their mothers work. I believe the number of newborns can increase, and then Japan will not face a labour shortage problem in the future," said Prof Urata.

(Source: Bangkok Post, Demographic time bomb, Disasters in Japan exacerbating population and financial problems that were already causing concern, 25/07/2011, Kanana Katharangsiporn, link) 

Demography Vocabulary

demography (noun) - the study of changes in populations using statistics (See Wikipedia)
demographic (adjective) - regarding the populations of countries, regions and cities  (See Wikipedia on demographics of Thailand)

population - all the people living in an area (city, province, region, country)

time bomb - something that is likely to have a big effect in the future; causing damage and harm (originally: a bomb set to go off at a certain time in the future)
demographic time bomb - a change in the population that is happening now that will have a big effect in the future

proactive (adjective) - not being merely reactive, acting early to solve problems before they happen, anticipate and solve problems before they actually happen (See Wikipedia)
proactive policy - when the government acts early to solve problems before they happen

exacerbating - making a problem worse (exacerbate a problem)
concern - a worry ความกังวล
combination - the mixture you get when two or more things are combined การรวมกัน

boom - a very large increase
baby boom - a period of time when a large number of babies are born (See Wikipedia)

bust - break or damage badly so it cannot be used
challenging - difficult, in a way that tests your ability or determination ที่ท้าทายความสามารถ

in the wake of - after a big event
devastating - very harmful and damaging

catastrophe - a sudden terrible event causing much damage, injury and death; disaster
chaos - a very confused situation,  in which everything is in a mess การจราจล ความยุ่งเหยิง, ความสับสน ความโกลาหล
wreaked financial chaos - created a very confused and messy situation in the economy (reducing incomes for everyone)

shortage - when there is not enough of something การขาดแคลน
labour shortage - when there are not enough workers (if the population of a country declines then there are fewer workers and not enough for the amounts of work done in the past) 

disaster - something very bad that happens and causes a lot of damage or kills a lot of people ความหายนะ ภัยพิบัติ
decreasing birth rate - people are having less babies (if couples have less than two babies, they do not replace themselves and the population as a whole declines)

revenue - income from taxes or business activities รายได้
tax revenue - money that the government gets from people and companies paying taxes

squabble  - argument, fight over something
long-standing squabbles - arguments and fights that have existed and continued for a very long time

status - official or legal position สถานะ สถานภาพ
financial status - whether a person, organization or the government is having trouble getting money to pay its bills or not (example: being heavily in debt is one financial status that it is best to avoid)

chaotic - happening in a confused way and without any order or organisation ยุ่งเหยิง วุ่นวาย
chaotic financial status - a confused and messy "financial status" with many problems paying for or "financing" expenditures

social welfare - help given, especially by the state or an organization, to people who need it; good care and living conditions สวัสดิภาพ
budget - the amounts of money that an organisation has available to spend on different things during a period (See Wikipedia) งบประมาณ
national budget - the amounts of money being spent by the government on various things
gap - a space or opening in the middle of something or between things ช่องว่าง

issue - offering securities (stock shares, bonds) for sale; to give or provide something official แจกจ่าย to officially give out ออก

bond -  bought and sold like stocks but bonds are debt (money loaned) not equity (actual part of the company owned); an agreement by a government or an organization to pay back the money an investor has lent plus a fixed amount of interest on a particular date; a document containing this agreement (See Wikipedia on bonds and government bonds)

earthquake - a sudden shaking movement of the ground แผ่นดินไหว
recover - to become healthy and fit again after an illness or injury ฟื้น

double - to become twice as big, twice as much or twice as many เพิ่มเป็นสองเท่า
consumption - money spent by households and families on goods and services (See Wikipedia) การบริโภค
consumption tax rate - the extra small percentage added to the price of goods and services as a government tax

ruling Democratic Party of Japan (DPJ) - the DPJ party that was in control of the government
election - the process of choosing a person or a group of person for a position, especially by voting elect (v) electoral (adj) synonym: the polls การเลือกตั้ง
cost it the next election - lose the election because they did not do something (made the wrong policy choice)

media - public ways of communicating news and information: television, radio, newspapers, magazines, the internet สื่อ

proceed - to continue as planned ดำเนินการ
reform - improvements in the way government or an organization operates การแก้ไข การปฏิรูป

X stems from Y - X comes from Y, Y causes X
unfavourable economic environment for Y - the economic situation was not good for Y, for achieving goal Y

discourage - make people not want to do something (through actions, policy or not providing incentives or rewards)
discourages starting families - doesn't make people want to start families

facilities - the buildings and equipment for an activity สถานที่และสิ่งอำนวยความสะดวก
daycare centres - places or schools that take care of young children during the day while their parents work (See Wikipedia)

shrink - to become smaller, or to make something smaller หดตัว, เล็กลง
expected - believe will happen คาดว่า (จะเกิดขึ้น)

clear - easy to see and understand
trend - a gradual change or development that produces a particular result ทิศทาง แนวโน้ม
clear rising trend - easy to see that it is increasing steadily over time

aged - old สูงอายุ
elderly - older people, over 65 สูงวัย, อาวุโส, อายุมาก
X accounts for Y% of Z - X is Y% of Z
whopping - very big, very large ขนาดใหญ่, ก้อนโต

international -between countries ระหว่างประเทศ
international economics - (See Wikipedia)

provide - to give someone something that they want or need
exorbitant - very high or large
factor - a fact or situation which influences the result of something ปัจจัย

facilitate - help
facilitators - people who help other people with their problems
newborns - babies that were just born (here the number of new babies during a period of time such as one year)