Bernardo M. Villegas
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How to Prevent Demographic Winter

           Fertility decline is wreaking havoc on the global economy.  According to Susan Yoshihara, co-editor of Population Decline and the Remaking of Great Power Politics, the global economy is languishing years after the 2008 global economic crisis because of fertility decline and demographic ageing.  Starting this year, the working-age populations of the major economies will decline for the first time since 1950, including Russia and China (still emerging markets).  The share of people 65 and older will soar in the major economies, reducing the demand for durable goods produced in the developing economies.  This will leave in doubt the prospects of the world’s next generation.

          Japan is the worst hit by this demographic winter.  One in five of Japan’s elderly are still employed, double the average for developed countries.  Yet nearly one in four Japanese senior citizens lives below the poverty line, 40% more than in the overall population.  Since there won’t be enough people to take care of family graves in the future, seniors scatter “pretend ashes” from house boats in Tokyo to prepare for such an alternative.  A balloon company will dispose of them aloft for about $2000.  There are very few young people who can take care of the elderly so that a robot called “Pepper” helps the ageing population with their health care needs.  Even with a population of some 130 million and a per capita income of more than $40,000, domestic demand for most consumer goods is either stagnant or declining, making it difficult for the Government to apply pump-priming measures.  The so-called “arrows” of Abenomics ended in failure.  The only “sunrise” industries are those marketing hearing aids, false teeth and adult diapers.  Forget the Fast Moving Consumer Goods (FMCG) of economies with younger populations.

          Developed countries like Japan and those in Western Europe took almost a century to reach their present state of demographic decline.  The factors behind this long-term trend are easy to define:  industrialization, urbanization, later marriages, education of women and more women joining the labor force.  There was no aggressive state-sponsored population control program.  In contrast, the countries today that are prematurely joining the ranks of ageing populations, like China and Thailand, introduced birth control programs as a mistaken solution to mass poverty.   For example, China implemented three decades of state-enforced family planning.  As Ms. Yoshihara reported, factories in China are now facing worker shortages, compounded by singletons leaving the workforce to tend to ageing parents.  Chinese wages have risen double-digit percentages for a decade, causing corporations to seek cheaper labor elsewhere (as in Vietnam, Indonesia and the Philippines).  What was a “demographic dividend” in China just 30 years ago has become a “demographic drag.”  One reason is that decades of killing baby girls in China, as in India, is “obliterating universal marriage, the underpinning of socio-economic organization for centuries.”  By 2150, there will be 186 single men for every 100 marriageable women in China and 191 such men in India.  Even if the sex ratio at birth corrected itself overnight, 21% of Chinese men and 15% of Indian men would still be unmarried at age 50.

          Closer to home, what used to be called the Philippines’ “non-identical twin”, Thailand, is also suffering from premature ageing and shortage of labor.  Still a relatively poor country (with a per capita income of only slightly over $6,000), Thailand has a demographic profile that closely resembles Singapore (with a per capita income of over $40,000).   According to the Thailand Development Research Institute (TDRI), a continuous decline in deaths and fertility rates has led to Thailand becoming an ageing society, and this would have an effect on economic growth.  By 2030, one fourth of the population will be over 65 years.  In addition to rising medical costs, a large number of senior citizens will inevitably affect the country’s economy on several aspects including fewer working-age people and a lower amount of savings.  The shortage of labor will surely slow down the business sector.  Already, there are estimates that there is a shortage of as many as one million workers needed in both the industrial and agricultural sectors of Thailand.  It is well known that this premature demographic winter is a result of very aggressive birth control programs that were implemented in the last century by governments influenced by U.S. propaganda issuing from the notorious Kissinger secret report called the National Security Study Memorandum (NSSM) 200.

            All these should be a warning to well-intentioned advocates of population control among the poor in the Philippines.  The solution to mass poverty is not population control which plants the seed of a contraceptive mentality that will backfire in the form of anti-children attitudes of future generations.  We should exhaust all the possible positive approaches to eradicating poverty like eliminating corruption, investing in rural infrastructures, improving the quality of basic education for the poor, providing out-of-school youth with technical skills, establishing more rural health clinics, giving the poor in the rural areas access to potable water, conditional cash transfer programs for the poorest households, etc.  Contrary to those who are obsessed with birth control, the poor today have the number of children they want.  If they have large families, it is because they are thinking of children as their only way to rise from poverty, having lost hope in the ability of the State or society to help them.  As married couples experience the results of the positive approaches to poverty and their incomes rise, natural causes will result in a decline in fertility to more manageable levels.  Since they will continue to have a positive attitude to having children, we can look forward to a fertility rate that will not lead to the demographic winter that is now wreaking havoc on both developed and developing countries like China and Thailand. As these two developing nations have demonstrated, it does not take long for a contraceptive culture to inflict economic harm on a country.  For comments, my email address is bernardo.villegas@uap.asia.