3
AUGUST 2023
PDF Version [1003KB]
Dr Adam
Broinowski
Foreign Affairs, Defence &
Security
Executive summary
- With the human population
expected to peak by the end of this century and long-term
fertility decline projected in high-income countries, Japan’s
negotiation of the challenges of an ageing population and fertility decline offers
an important case study.
- Given the significant impacts of demographic transition on
macro-economic and financial effects, the shape of cities, public policy,
national budgets and political systems, Japan is faced with the considerable
challenge of how to maintain productivity, economic growth and societal cohesion
with a shrinking workforce, smaller tax base and increasing demand for social
services.
- This paper analyses the interactions of several causal drivers of
ageing and fertility decline in Japan, citing policy makers, demographers and population
researchers and commentators.
- Rather than continuing to rely on the traditional methods of
increased efficiency, financial and technological innovation, research findings
and commentary have emphasised reforms at the level of structural organisation.
- This includes addressing cultural norms and values with a
particular emphasis on gender and social roles, socio-economic conditions, the
labour market and workforce expectations, immigration and naturalisation
processes, and electoral asymmetries.
- All of these will in turn have an impact on Japan’s place in the
region and its relationships with its neighbours. The extent to which Japan,
with a shrinking and ageing population, can effectively recalibrate their
policies to address this combination of issues will be of considerable interest
for Australia, in the context of close and growing economic, diplomatic and
defence relationships. It will also be key to realising sustainable,
future-oriented, regionally engaged, long-term outcomes for many countries in
the region which face similar challenges now or in the future.
Introduction
For the first time in recorded history, the human population
is expected to peak by the end of this century. Population decline and the
‘grey spectre’ are affecting mature economies, including Australia. The world’s
population of people aged 60 years and older is expected to double by 2050, while fertility rates in high-income countries
appear to be in long-term decline.
As is evident in the large-scale
civil demonstrations against
raising the pension age in
France since January 2023, policies that support cutting benefits,
increasing taxes and raising the minimum age of retirement can
be vexatious. While the Macron Government has maintained that an older
retirement age helps to preserve the pension system, the 8 major
unions in France have gained popular
support. They argue that low-skilled and low-income workers bear an unfair
burden as they begin their working life earlier and often do high-impact manual
work, whereas other revenue collection methods are available to the state. The
demonstrations have also broadened to include wider concerns relating to
inflation, food and energy prices.
Whichever settlement is reached in that country, it is
undeniable that the scale of demographic shift in the old-age
dependency ratio – the
number of retirees compared to the working age population – is placing greater
financial strain on working populations in affected countries and can aggravate
pre-existing structural problems.
At the same time, low fertility rates are presenting significant challenges for
policymakers, particularly in the countries of the
Organisation for Economic Cooperation and Development (OECD). Demographics
are closely related to key macro-economic and financial effects, and their
changes can have whole-of-society impacts, ranging from economic and financial
performance to the shape of cities, public policy priorities and political
systems. To what degree and how fast countries with ageing and shrinking
populations can recalibrate their policies will be key to maintaining positive
economic outcomes.
Japan offers an important litmus test among low-fertility
countries in the OECD. As the world’s third-largest economy, it is a peaceful,
prosperous country with the longest life expectancy in the world, the lowest
rate of homicide, a world-leading high-end manufacturing industry, comparatively
little political polarisation, a generous social support scheme, and excellent
public services and infrastructure.
Japan also faces volatile demographic pressures associated
with its ageing and shrinking population. In 2005,
Japan became the world’s first ‘super-aged’ society,
where over 20% of the population is aged 65 or older. As
it continues to innovate to maintain an accustomed standard of living through
increased efficiency in productivity and investment, taxation and financial
policies, in the postwar period the country has steadily increased reliance on
a historically non-traditional workforce – namely women, the
elderly and immigrants.
This paper analyses how structural
organisation and cultural norms, related to gender
equality, socio-economic and labour market conditions, minorities and
immigration, are important interconnecting drivers
to consider in formulating sustainable policy priorities related to retirement
age, taxation, social security and other associated factors.
Overview of ageing populations and fertility decline in Northeast Asia
Among economically advanced countries, as demonstrated in
Figure 1 below, the ‘lowest-low fertility’ rates are particularly pronounced in
3 regions: Northeast Asia, and Eastern and Southern
Europe.[1]
Figure 1 Fertility trends in
selected OECD countries 1970–2021
Source: OECD Family Database
For countries with consistently low fertility rates and
where the numbers of deaths exceed the number of births, without inward
migration, a decline in population is inevitable over the longer term. Among
Northeast Asia’s dominant economies – Japan,
South Korea and China – all are
experiencing unprecedented and rapid population ageing, and have reported drops
in population growth in the past year. Singapore, Thailand and Taiwan are also
shrinking, while population growth is slowing in Vietnam, the Philippines and
elsewhere in East Asia.
Japan was the first country to reach the median age above 40
(in 1999) and it reported the highest median age in the world in 2021 at 48.4. A
third of Japanese people are over 60, making Japan home to the oldest
population in the world, after Monaco. Japan is also among the ‘lowest-low
fertility’ countries, beginning its population decline in 2008 and posting its
total fertility at just below 1.3, or 811,604 births in 2021, well below the
replacement level of 2.1.[2]
South Korea’s population – currently just under 52 million,
and with the lowest birth rate of OECD member states in 2021 – is projected to drop below 38 million
by 2060; by 2100, its population will have dropped below 16 million, less than
a third of what it is in 2023. South Korea’s working
population is estimated to decline by 35% until
2050, based on current fertility rates. Taiwan is likely to see a 28.6%
reduction. Both South
Korea and Taiwan
will become super-aged later this decade, and their working-age populations
also are shrinking, a trend that will accelerate over the next several decades.
Of global and regional significance is the recent
demographic shift in China in 2022. China’s
population decreased by 850,000
to 1.412 billion
due to a slip in its fertility rate to below
1.1 from its peak of 6.0 in the 1960s. Although
likely exacerbated by COVID and its associated impacts, estimates find that by
2035, 400 million people in China will
be age 60 and over, representing 30% of the population. The UN’s
medium estimate predicts that China’s total fertility rate will rise from
1.18 children per woman in 2022 to 1.48 in 2100. The UN’s low
case estimate projects that China’s population may fall to 1.3 billion by
2050 and 800
million by 2100, a third of the current total, while the Shanghai
Academy of Sciences estimates that it will reach 587 million in 2100, less
than half of the current total. This comes at least a decade earlier than
projected. Moreover, for the working-age population in China, more than 40
million will retire in the current 5-year period to 2025,
dropping
by 35 million in this period due to a
lack of replacement, and experiencing a decrease of over
186 million people over the next 27 years.
Some of the
possible factors in China’s population decline include years of falling
fertility, low or negative net migration, the consequences of the previous one
child policy (1980–2016), the rising cost of living,
the impacts from COVID-19 and higher incomes for women. China has one of the
lowest retirement age plans in the world, however, with female factory and
agricultural workers retiring at 50 and male workers at 60. In response, China
is campaigning for young people to get married and have multiple children while
also gradually
raising the retirement age to prepare the population for delayed
retirement.[3]
Japan – a demography laboratory for
‘new capitalism’ policies
In Japan, demographic trends in fertility, longevity and
immigration are certainly stark,
and have earned it the moniker of ‘demographic
policy laboratory’ among OECD countries and the Group of Twenty (G20).[4]
The population
is projected to shrink well into the middle of this century, dropping to an
estimated 88 million in 2065 – a 30% decline in 45 years – and
to 72 million in 2100.
Dubbed the ‘lost decades’, Japan’s
economic and societal gridlock triggered by the bursting of the property
market bubble in 1991, has produced prolonged anaemic economic growth and wage
stagnation. Contributing factors have included ageing population, labour
shortages, slower consumption, a hollowing-out of the manufacturing sector,
greater fiscal deficits and lower interest rates.
Together with an ageing population, which is finding it
difficult to retire because of the pressure on healthcare and pensions, younger
generations are experiencing less take-home pay and have shown a marked
hesitancy to start families as part of reduced optimism among
Japanese youth in general.
In recognition of the problem of fertility decline, on 19 January 2022, Prime
Minister Kishida Fumio launched a plan for a ‘new
capitalism’ at the World Economic Forum. Mr Kishida then used
his first speech in the new session of Parliament on 23 January 2023,
to announce unprecedented levels of spending in 2 priority areas: child care
support and defence.
Japan’s new national
security strategy, a basic defence program and
a medium-term plan to improve Japan’s defence capabilities commits 43 trillion yen (A$483.7
billion) over 5 years from fiscal year 2023; 56% more than the current program and the highest defence budget ever recorded in the
history of modern Japan. This includes the capability to conduct long-range and
pre-emptive strikes on enemy bases (for example, reinforced missile systems on
the Nansei Shoto (Southwest Islands)). This will likely see a tax hike
of one trillion yen (A$11.2 billion) by fiscal year 2027, increasing the
overall budget for fiscal year 2023 to about 114 trillion yen (US$837.3 billion).
Japan is estimated to have the highest
public debt relative to GDP (gross debt-GDP ratio) of any country in the
world; an estimated national debt of 263%
the size of its A$7.5 trillion economy. Japan spends more on debt
redemption and interest repayment than on public works, defence and education
combined. The International Monetary Fund (IMF), among other financial service
institutions, has indicated that age-related spending pressures are likely to
produce sovereign
stress.
The Kishida administration is
proposing to normalise monetary policy, reviewing its extraordinary stimulus
program as part of the Abe administration’s ‘three arrows
strategy’ (‘Abenomics’), while raising wages
higher than the rate of inflation. Known as the ‘defence tax’, the Government
is proposing to introduce 1% of
current income tax payments, as well as corporate and tobacco taxes. As this
initiative is likely to be contested
by the Keidanren (Japan Business Federation),
which prefers a flat tax, as a fall-back option, the Government may rely
on government and construction bonds, and avoid a review of the taxation system,
which would involve corporate
and income taxes for higher earners.
Although comparatively less
widely reported, the second key policy of child care reform is aimed at
reversing fertility decline. Japan has not enjoyed a replacement
birthrate since 1974. Described by Mr Kishida as a threat to ‘the very survival of the
nation’, the
number of babies born in Japan in
2022 fell below 800,000 for the first time since records began in 1899, 8
years earlier than projected. Japan is
one of the first OECD countries to experience population decline and its fertility
rate of 1.3 has been consistently low compared to the US and Australia at
1.7 and 1.6, respectively. In the 2010s, more than 20% of the population was
older than 65. And in the three-year period 2022–2025, Japan’s entire postwar
baby-boom population will pass the
75-year milestone. During the next 2 decades, Japan’s future decline will
continue to magnify – by roughly 8 million in the 2020s and 10 million in the
2030s.[5]
To avoid a demographic cliff, and to maintain a sustainable
level of productivity and economic growth with a smaller workforce and reduced
tax base, Mr Kishida announced that the Government would institute a Children
and Families Agency to administer the doubled budget
for children as outlined in the Basic Policies on Economic and Fiscal Management and
Reform to be released in June 2023. This
includes pay rises in the fields
of care giving, child care and child education, and in the nursing profession.
The new child support program will require annual funding exceeding one
trillion yen (A$112.9 billion).
Providing cash incentives
for having babies, generous parental leave policies and free or subsidised
child care is not a new approach. Past
financial initiatives to encourage families to have more children, such
as in Australia in 2004, have tended to create only a temporary
bulge in numbers of babies and a momentary spike in the birth rate. Citing
examples of reversed fertility decline in
Sweden, some
demographers argue that without also
addressing social welfare, employment and labour market conditions, gender
equality, access to education, housing affordability and supply chain issues, a
decline in national birth rates is likely to continue.[6]
‘Womenomics’
Despite the many freedoms for women that were enshrined in the Japanese
constitution in 1947, the stereotypical
roles of ‘model employee’ and ‘ideal homemaker’ have remained stubbornly
consistent; divided between the man, husband and father who dedicates long
working hours in fealty to the company or organisation, and the woman, wife and
mother who devotes herself to child-rearing, housework and family
responsibilities.
Women in Japan have experienced dramatic increases in
educational attainment and female labour force participation rates are
relatively high. Japanese women’s
labour force participation has at times outpaced that of the US. Japan
boasts a strong social support system and has increasingly adopted
family-friendly policies to encourage more flexible ‘work-balance’
arrangements, including relatively generous parental leave for mothers and
high-quality child care. Yet, Japan remains one of the most gender-inegalitarian
low-fertility countries in the world.[7]
In recognition of the association between female labour
force participation and fertility levels, the
Kishida administration has continued the ‘womenomics’ policies of the Abe
administration by making it compulsory for companies with over 300 employees to
disclose pay discrepancies between women and men.[8]
This is specifically focused on competing with US and European companies by
attracting Japan’s elite female graduates to Japanese corporations, which are
newly promoted as inclusive, diverse and family-friendly workplaces that have
redressed their customary
gender barriers.
As part of the Kishida plan to implement a ‘virtuous cycle
of growth and distribution’, on 19 January 2023, the Minister of Women’s
Empowerment and Gender Equality, Ogura Masanobu, declared the administration’s
intention to ‘mainstream gender issues’. This
involves increasing female participation in traditionally
male-dominated areas, including in digital/STEM education; women’s entrepreneurship in start-ups; women’s roles in a decarbonised
society; disaster prevention and peace and security; and increasing gender-egalitarian awareness of men and youth.
In 2021,
women earned on average 22.4% less than their male counterparts and held
only 17% of Japan’s total wealth (in 2022, Japan
placed 116th out of 146 countries in
gender gap rankings). Women remain overwhelmingly underrepresented in corporate
managerial positions (13%) and as parliamentary representatives (10%).
Moreover, women remain overrepresented in irregular
employment.
Causal drivers of fertility decline
– some theoretical frameworks
Social demographers such as McDonald, who utilise Gender
Equity Theory, have emphasised
structural changes, including women’s shifting gender roles in the public and
private spheres as a causal driver in fertility decline.[9] Although women
have increased their access to higher education and labour market
participation, they typically continue to face unequal expectations in terms of
child care and housework. These scholars maintain that improving women’s
economic opportunities and changing gender-inegalitarian family institutions
would effectively address the balance (for example, gender relationships,
discrimination, attitudes, and policies).
The Gender Equity Framework is often placed in contrast to Second Demographic
Transition (SDT) theory. In contrast to the first demographic transition
that involved twin declines in mortality and fertility, SDT seeks to explain
sub-replacement fertility trends in primarily Western countries as based on
widespread value or ideational change. Such change includes religious
secularisation, a separation between marriage and procreation, increased
population movement and a transition from materialist to post-materialist
societies (that is, self-realisation and individualism).[10]
To an extent, SDT is complemented by Gender
Revolution Theory, which focuses on the transformation of gender roles in a
changing society to explain both local and regional variation in fertility
decline. This theory identifies 2 main phases in societies experiencing the
‘shrinking family’ phenomenon:[11]
- a trend towards smaller families due to women’s increasing
participation in the labour market, delaying marriage, decreasing the
probability of marriage and delaying childbearing, as well as an increase in
divorce
- increased fertility rates together with increased women’s labour
participation.[12]
The Gender Revolution Theory in the second phase, also
reverses the trends normally linked with SDT, in which men (or full-time
partners) are more involved in caretaking responsibilities, such as housework
and family relationships. This co-parenting and shared caretaking is associated
with family stability and higher fertility in countries with ultra-low
fertility.[13]
Like SDT, however, Gender Revolution Theory also tends to
occlude distinctive and heterogeneous sociocultural characteristics in
non-Western countries.[14]
It is consequently criticised for its unidirectional and deterministic
trajectory which assumes that self-actualisation is experienced in the same way
by men and women across socio-economic conditions and in different cultures.[15]
Similarly, while Gender Equity Theory might offer a link
between women’s labour market opportunities, cultural norms and expectations, and
low fertility in more affluent countries, it also remains limited to factors
which are attributable to individual behaviour and agency.[16]
Given the spectrum of individual attitudes and behaviours (in addition to
contextual differences within and across countries), it is difficult to produce
empirical aggregate studies on fertility decline by focusing solely on these.
Rather than individuality and self-actualisation, in the
Japanese context in recent decades it appears that socio-economic conditions
and existing gender-essentialist social organisation continue to inform
fertility choices. Labour market structure and workplace norms, which encourage
employees to work
long hours, see 53% of female employees
work in part-time
or low-paid jobs. These play an important part for a majority of women in
deciding to leave the labour force at least temporarily around the birth of
their first child.[17]
These women are typically placed in a position of greater dependency on their
husbands’ salaries (as non-marital child-bearing and single-parent
households have remained at negligibly low levels) and the generous social
support and retirement arrangements therein. Although this may change over time,
these factors continue to inform the postponement of marriage and childbearing.[18]
While studies of full-time couples in Japan have shown that
males often maintained gender-egalitarian
attitudes, their caretaking responsibilities were severely curtailed due to
workplace demands compared to their female partners, who ‘tacitly accepted’
more housework.[19]
Moreover, practical realities such as the cost and relatively short opening
hours of child care centres also make it less feasible for both parents to work
full-time (alongside commonly longer office hours
than in other OECD countries).
Compounded by economic uncertainties, including the rising
cost of living and divergent work opportunities between social strata within a gender-essentialist
social structure, these factors contribute to the social and economic context
for the low fertility rate in Japan.[20]
Immigration: a viable option for
reversing fertility decline in Japan?
Together with fertility
rates, Japan’s work force and labour markets have steadily
shrunk since 1990. While Japan’s
population is set to shrink to 100 million in 2050 from 128 million in 2010, Japan's working-age population (aged 15–64 years)
sank to just
over 75 million in 2020, comprising just below
60% of the population and down 13.9% from
the 1995 peak. While the working age population rose from 80 million in 1950 to 100 million in 1990, it is projected to decline to 60
million by 2050. Since the
1970s, Japan and South Korea have
off-shored much of their production to Asia-Pacific countries with a younger
median age and larger and cheaper workforces (for example, Bangladesh, India,
Indonesia, Philippines, Vietnam). Countries such as the Philippines, and
increasingly Vietnam, also have some of the world’s largest
sources of emigration.
At the same time, Japan has long
maintained strict immigration policies with popular support. Roughly 3% of
Japan’s population is foreign-born, compared to 15% in the UK and 30%
in Australia. The traditional consensus on
immigration policy in Japan, characterised by the nation’s ‘insular mentality’, has been such that attempted
reforms have typically
been regarded as a political death-wish.
This has placed Japan at a critical juncture, in which it
faces an acute demographic crisis and resulting labour shortage that will
require it to more than quadruple its foreign workforce (to an estimated
6.74 million) just to maintain current levels of economic output.
Government policy over the longer term has been to
compensate for the shortfall in the national workforce by investing in
‘labour-saving technologies’. Prime
Minister Kishida’s plan for a ‘new form of liberal democratic capitalism’
has not
deviated from this strategy; investing in AI technology, the Internet of
Things (IoT) and robots to improve anything from traffic accident statistics to
remote, automated health care to information flows through machine learning (that
is, as consistent with the Fourth Industrial Revolution).
On the other hand, enhanced efficiency and velocity in the
industrial, social services and financial sectors are not always constructive,
as they also contribute to increased unemployment (particularly in the
‘low-value’ workforce) while exacerbating pre-existing structural problems such
as income inequality.
Nonetheless, under combined demographic and industrial pressures,
Japan has also increased its population of foreign workers from one million in
1990 to 1.72
million foreign workers in October 2020 (although this
number is likely higher), out of more than 2.9 million
residents of foreign nationality in total (or, 2.39% of the total
population of 125.5 million).
In 2018, the Abe Government introduced a new guest worker
program under the ‘Specified Skilled Worker (SSW) i & ii statuses’ to bring
an estimated
345,000 foreign workers to Japan over 5
years. When this program came into effect in 2019 it permitted skilled
blue-collar workers in only 2
of 14 sectors with labour shortages –
construction and shipbuilding – to renew their visas and bring their families
to Japan. The Kishida administration has since expanded eligibility for visa
renewal in all 14 worker-shortage categories.
Despite this recent boost in foreign workers, the official
number based on Japan’s limited definition of ‘immigrant’ provided by the
Ministry of Health, Labor and Welfare (for example, permanent resident of
foreign nationality, which requires over 10 years of residence in Japan),
estimates only 1.8 million foreign workers as reported by around 300,000
companies.[21]
Given the discrepancy between foreign residents and workers, it may be that not
all companies are reporting their foreign workers and that some foreign
residents are students, self-employed, retired or have moved from their
original jobs.
Higher fertility in immigrant populations is often regarded
by policy researchers as one way to assist in resolving shrinking and ageing
populations, by revitalising communities in decline.[22]
Immigrant populations in Japan, however, have typically recorded lower
fertility rates than their native counterparts.[23]
High social and legal barriers and utilitarian
treatment faced by foreign
workers, as well as harsh
immigration detention policies, have tended to undermine the social
integration of immigrant populations as permanent members of society (for
example, naturalisation, social inclusion and immigrant population growth).[24]
As the late prime minister Abe
Shinzo stated in 2018, for example, the boost in immigration has been
primarily to fill short-term labour needs with ‘human resources with a certain
level of expertise while limiting their length of stay’. These ‘human
resources’ have primarily been international students who work part-time and
trainees registered in the Technical
Intern Training Program. This program has been a boon to companies, which
can hire young, unskilled workers on low wages – but still
higher than those in developing countries.
This situation was exacerbated in
the COVID-19 years as the Suga and
Kishida governments implemented strict border control policies, including an
initial re-entry ban on long-term residents who
were outside of Japan and a complete entry ban on new foreign residents.
This triggered secondary effects such as xenophobia and the scapegoating
of foreigners based on ‘security and
order concerns’, and pseudo-scientific explanations for foreigner-transmission
of COVID. The ban was lifted in 2022 to admit entry to a waiting list of
eligible workers.
While by no means limited to Japan, immigration programs can
also be fertile ground for polarising narratives in host societies. With demographic
transition as a primary concern under an overarching theme of decline and existential
threat and exacerbated by heightened economic insecurity, anti-immigrant,
identitarian or ethno-nationalist ideas such as replacement theory can become popular. Replacement theory, which anticipates the substitution of an imagined
homogeneous and harmonious majority population
with a disruptive immigrant minority
population, has received greater public attention
in recent years. It has been reported to have had some influence in some countries
in Europe, India, the Middle East, Australia, Canada, New Zealand, South
Africa and most visibly, in the
US, and has
been linked to acts
of violence perpetrated by individuals and
groups.
Given that Japan’s rapidly ageing population is expected to
need 21
million workers in 2040, a disproportionate growth in the secondary
industrial sector for social security-related services will increase demand for
nurses and long-term care givers in the health and social services sectors, and
for migrant female workers from Southeast Asian countries on temporary visas in
particular.[25]
One way to understand Japan’s conflicted need for foreign
workers and population growth alongside a notably deep reluctance to
permanently include immigrant communities is the political context. As in many
countries, working populations in Japan migrated from rural villages and towns
to the cities for employment in waves in the
1930s, 1950s and since the 1980s. Serviced by
construction, transportation and infrastructure programs, elderly, rural
populations typically represent the traditional strongholds of the Liberal
Democratic Party (LDP). These electorates also
enjoy a disproportionate
degree of influence compared to the more densely populated peri-/urban
voting districts. And they are strong advocates for
the (protected) agricultural industry and social security spending.
As much as the more conservative
electorates may seek to preserve their ‘way of life’ and ideas of the Japanese
nation and identity, as they rapidly age and pass away, and as
the continuing
trend in diversification of political
parties and increasing prominence
of some female politicians albeit relatively few in number, demographic and
political change may follow, including immigration
and further electoral reforms and incoming migrant populations.
Japan’s attractiveness to foreign worker populations is
not a given, however. As the Southeast
Asian region is tipped to become the economic powerhouse that East Asia has
been for at least the past 30 years, future economic growth in primary
emigration countries such as Vietnam, Indonesia, and the Philippines, may
reduce future foreign labour supply in Japan. The Japan
Centre for Economic Research (JCER) estimates that
by 2032 the wages
of factory workers in these countries will rise to more than 50% of those
earned by trainees under the program. Japan’s wages are already among the lowest in developed countries,
and the weak yen further suppresses the earning potential for foreign workers.
Although the political establishment in Japan is such that
it seems unlikely to find the will to overcome entrenched cultural norms and
suddenly declare Japan an ‘immigration nation’, the LDP is likely to continue
to prioritise less contentious (and more popular) factors which inform
fertility intentions such as child care, gender inclusivity and working
conditions, as a national security issue.
Eventually, a formalised immigration policy may assist Japan
in adapting to shared
challenges with countries in the region
through the development of regional and multilateral interconnectedness. Investment and cooperation in renewed
infrastructure, energy systems and urban
redesign, for example, as well as the provision
of more affordable housing and quality education and skills, could better
support Japan’s resilience to the impacts of demographic transition.
Demographic
change in the Indo-Pacific
Demographic change is a worldwide phenomenon with global
implications. Often understood as the ‘flying
geese model’ of Asian economic development, rapid economic growth that
drove Japan’s successful return to the world economy in the 1950s and 1960s,
followed by other now powerful economies in Northeast Asia, were fuelled, in
part, by ballooning labour pools which are now shrinking.
Currently, the cascading effects on national economic and
political power in countries in Northeast Asia, albeit on different timelines,
are being felt at all levels. Alongside structural and cultural factors in
Japan as explored above, with working-age populations shrinking in parallel,
political and budgetary pressures will become more acute in the region. Demographic
change will steadily alter regional security dynamics and demand adjustments to
manage both existing security challenges and to meet new ones.
Beyond Japan, in the broader Indo-Pacific region, it is
estimated that 11
of 16 major security actors will also reach ‘super-aged’ status by 2050.[26]
The Indo-Pacific, which is both a security concept and a geographic area, now constitutes
the majority of the world’s population with many lower income countries with relatively young
populations. It is the region in which world population growth will
occur before peaking at the end of
the century. India
has now overtaken China as the world’s most populous state. And other
states with large, younger populations such as Vietnam, Indonesia, the
Philippines and Bangladesh are anticipated to continue to grow in the next
several decades.
Through the security lens, the Indo-Pacific region is
growing increasingly complex
with a more diverse set of actors with greater distribution of power and
interests. With demands for increased participation in regional security over
the next 30 years, the regional security environment will become more
multipolar in nature.
At the same time, the US, with the
highest military budget in the world, continues to expand its military, while
Australia, China, Indonesia, India, Japan and South Korea all have increased
their military budgets and military activities in the past decade. Moreover, all
regional countries that are security allies with the US (except the
Philippines), are focused on offsetting military recruitment deficits and higher
labour costs by integrating high-technology, including in the cyber and outer
space domains.
Japan, for example, cannot obtain a
workforce at the scale required to build an industrial manufacturing base and
military capacity necessary to project power comparable
to that of China and the People’s Liberation Army (PLA). Since the first
Abe administration in 2006, at least, increases in defence spending and
national security strategy revisions in Japan have supported a military
transformation focused on high-technology capabilities requiring fewer
personnel, and greater interoperability with allied countries, alongside constitutional
revision.[27]
As stated by the Defence
Ministry in 2020, of priority is ‘reinforcing the human resource base in
light of the aging [sic] population with a declining birth rate and reinforcing
the technology base due to advances in military technologies’. [28]
In continuation of this trajectory, the Kishida administration’s push to reverse
fertility decline to raise the national birthrate and boost the military budget
can be understood as an interlocking program of rapid strategic and economic
transition.
Japan serves as an example for Australia, which currently
has a falling
birthrate and which is predicted to stabilise at 1.62 after 2030. The
Centre for Population has forecast that Australia’s population will increase by
an additional 4 million people to reach 30.8 million by 2032, but this may not
be sufficient to address the
country’s needs.[29]
Although Australia has proven capable
of adjusting to significant
demographic changes, due to abundant
natural resources and population increases through migration, it is also
considered to be in relative decline
due to its smaller population, domestic market and industrial base, longer
supply chains due to geography, and limited manufacturing
capacity compared to other OECD countries. Like
Japan, Australia’s migration
system is currently under review, so as to reduce overreliance upon an ‘uncapped, unplanned temporary program’ and
to increase pathways to permanent residency.
Australia’s resilience also relies upon strong purchasing
power and a solid network of security partnerships. The latter includes its traditional
allies, the US and the UK (as reflected in the AUKUS
agreement), as well as newer partnerships with Japan, South Korea, India,
Indonesia, Singapore and several Pacific Island countries.
Like Japan and several other countries in the region,
Australia faces the ‘exquisite dilemma’ of relying upon China as its largest
trading partner, which is also widely considered to be its biggest security
concern. As demonstrated with some of the constraints
and challenges
in the AUKUS nuclear submarine program (Pillar I), Australia will seek to
expand its industrial base (including building a skilled workforce capacity)
alongside the integration of quantum technologies, artificial intelligence and
autonomy, advanced cyber, counter/hypersonic capabilities and electronic
warfare (AUKUS
Pillar II).
Australia stands to learn valuable lessons from Japan and
other countries in Northeast Asia, as they negotiate a host of interrelated
realities in ‘super-aged’
societies. It is also well-placed to engage in reciprocal exchange with younger
and growing regional neighbours as they manage the opportunities of short-term
‘demographic dividends’ together with the attendant pressures of rapid growth,
while also seeking to stabilise the regional balance of power. And with the
immediate and urgent, direct and cascading security impacts from large-scale
and accelerating climate change also affecting the region, as with the case of Australia, many states will see increasing pressures on
their militaries to provide additional assistance for internal and external humanitarian
security engagements.
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[1]. For
example, Italy
has one of the lowest fertility rates in the world at 1.2 and among the
highest life expectancy rates at 81 years, with 24.1% of the total population
over 65 years and an expected median age of 51 years by 2050. In January 2023,
there were about 58 million Italian residents, dropping by 3% from the previous
year. While the impact of COVID-19 was considerable, the causes over the longer
term can be traced to an excess of deaths over births not offset by migration
movements. Consequently, the national Institute of Statistics reports that Italy's
ageing residents and falling birthrate will decrease the population from 54.2
million people in 2050 to 47.7 million in 2070.
First introduced by the Mussolini regime in the 1920s, in recent years
Italy has increased its pro-natalist measures to incentivise childbirth and
support low-income single women and families. Like Japan, the Meloni Government
through its Ministry of Family, Natality and Equal Opportunities is treating
Italy’s demographic emergency as a top priority. Other pro-natalist countries
include Canada, France, Greece, Hungary, Iran, South Korea, Singapore, Spain
and Sweden.
[2]. R. Goldstein,
T. Sobotka and A. Jasilioniene, ‘The End of “Lowest-Low” Fertility?’, Population
and Development Review 35, no. 4 (2009): 663–699.
[3]. Although
policymakers in China have long been aware of the demographic issue of
fertility decline and rapid ageing, it was mostly dealt with at the provincial
level. In March 2023, the ageing population issue
was moved to the Ministry of Civil Affairs portfolio, raising its status to the
national level.
[4]. The
members of the G20 are: Argentina, Australia, Brazil, Canada, China, France,
Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia,
Saudi Arabia, Türkiye, the EU, the UK, and the US.
[5]. Andrew
Oros, ‘Japan’s Demographic Shifts and Regional Security
Challenges Ahead’, Indo-Pacific Defense Forum, 11 May 2020.
[6]. S. Basten, T. Sobotka, K. Zeman, ‘Future
Fertility in Low Fertility Countries’, Vienna Institute of Demography
Working Papers, May (2013): 39–136. https://doi.org/10.1093/acprof:oso/9780198703167.003.0003.
[7]. Y.
Ono and F. Uchikoshi, ‘“Lowest-low
Fertility” and Gender Inequality: Japan from a Comparative Perspective’, Japan
SPOTLIGHT (Jan/Feb 2023); F. Goldscheider et al., ‘The Gender Revolution: a
Framework for Understanding Changing Family and Demographic Behavior’, Population
and Development Review 41, no. 2 (June 2015): 222 (207–239);
M. Brinton and S. W. Han, ‘Theories of
Postindustrial Fertility Decline: an Empirical Examinations’, Population
and Development Review (March 2022): 303–330.
[8]. R.
Rindfuss, K. Guzzo and S. Morgan,
‘The Changing Institutional Context of Low Fertility’, Population
Research and Policy Review 22, no. 5/6 (2003): 411–438.
[9]. P. McDonald,
‘Gender Equity in Theories of Fertility Transition’, Population and
Development Review, 26, no. 3 (2004): 427–439; P.
McDonald, ‘Societal foundations for explaining low fertility: Gender equity’,
Demographic Research, 28, no. 34 (2013): 981–994.
http://www.demographic-research.org/Volumes/Vol28/34/ DOI:
10.4054/DemRes.2013.28.34.
[10]. B.
Zaidi and S. Morgan, ‘The Second Demographic Transition Theory: a Review and
Appraisal,’ Annual Review of Sociology 43, (2017): 473–492;
R. Leesthaeghe, ‘The Second Demographic Transition 1986–2020:
Sub-replacement Fertility and Rising Co-habitation – a Global Update’, Genus
76, no. 1 (2020): 1–38.
[11]. Goldscheider
et al., ‘The Gender Revolution’; G. Esping-Andersen
and F. Billari, ‘Re-theorizing Family Demographics’,
Population and Development Review 41, no. 1 (2015): 1–31.
[12]. B.
Arpino, G. Esping-Andersen and L. Pessin, ‘How Do Changes in Gender Role
Attitudes Towards Female Employment Influence Fertility? A Macro-Level
Analysis’, European Sociological Review 31, no. 3 (2015): 370–382.
[13]. Esping-Andersen
and Billari, ‘Re-theorizing Family Demographics’; Goldscheider et al., ‘The
Gender Revolution’; B. Okun and L. Raz-Yurovich,
‘Housework, Gender Role Attitudes and Couples’ Fertility Intentions:
Reconsidering Men’s Roles in Gender Theories of Family Change’, Population
and Development Review 45, no. 1 (March 2019): 169–196.
[14]. J.
Yu and Y. Xie, ‘Is There a Chinese Pattern of the Second Demographic
Transition?’, China Population and Development Studies 6 (2022): 237–266.
[15]. J.
Raymo, ‘The Second Demographic Transition in Japan: a Review of the Evidence’, China
Population and Development Studies, 6 (2022): 267–287.
[16]. J.
McDonald, ‘Gender Equity in Theories of Fertility Transition’, Population
and Development Review 26, no. 3 (September 2000): 427–439.
[17]. Raymo, ‘The Second Demographic Transition’.
[18]. M.
Atoh, ‘Family Changes in the Context of Lowest-Low Fertility: the Case of
Japan’, Japanese Journal of Sociology 17, no. 1 (2008): 14–29.
[19]. M.
Brinton, X. Bueno, L. Olah and M. Hellum, ‘Postindustrial Fertility Ideals,
Intentions and Gender Inequality: a Comparative Qualitative Analysis’, Population
and Development Review 44, no. 2 (2018): 281–309. The authors analysed
interviews with married couples in 4 wealthy countries – Sweden, the US, Spain,
and Japan – with a focus on gender inequality on fertility intention. See also
Brinton and Han, ‘Theories of Postindustrial Fertility Decline’.
[20]. M.
Brinton and E. Oh, ‘Babies, Work, or Both? Highly Educated Women’s Employment
and Fertility in East Asia’, American Journal of Sociology 125, (2019):
1.
[21]. A. Klein and H. Mosler,
‘The Oldest Societies in Asia: the Politics of Ageing in South Korea and Japan’,
Global Political Demography (August 2021): 195–217.
[22]. P.
McDonald and M. Hosseini-Chavoshi, ‘What Level of Migration is Required to Achieve
Zero Population Growth in the Shortest Possible Time? Asian Examples’, Frontiers:
Human Dynamics, Migration and Society Section 4, (2022).
[23]. Y.
Korekawa, ‘Foreign Women’s Fertility in Japan; an Analysis by Micro-data of the
Japanese Population Census’, Journal of
Population Problems 69, no. 4 (2013): 86–102. 人口問題研究69-4.ren
(ipss.go.jp)
[24]. The Japanese Government responded to pressure from the
United Nations Human Rights Council Working Group (based on a September
2020 report on long-term detention of asylum
seekers in Japan) by reintroducing an amendment Bill to the country’s
Immigration Control and Refugee Recognition Act, which allows the authorities
to detain irregular migrants indefinitely. This includes people who enter to
seek asylum or attempt to seek asylum after entering the country. Despite this,
in early 2021, the death
from medical neglect of Wishma Sandamali, a
33-year-old Sri Lankan student, while she suffered a stress-induced stomach
condition in a Japanese detention centre increased international opprobrium.
[25]. E.
Asis and R. R. Carandang, ‘The Plight of Migrant Care Workers in Japan: a Qualitative
Study of Their Stressors on Caregiving’, Journal of Migration and Health
1–2, (September 2020): 100001; G. Farcchini, Y. Margalit and H. Nakata,
‘Countering Public Opposition to Immigration: the Impact of Information
Campaigns’, Institute of Labor Economics (IZA), Deutsche Post Foundation
Discussion Paper Series 10420, (December 2016): 1–50.
[26]. For further details on population
ageing and growth in the Indo-Pacific region, see Andrew L. Oros and Bailey Brya, ‘New
Census Results Underscore Security Challenges of Aging in the Indo-Pacific’, Asia
Dispatches (June 3, 2021), www.wilsoncenter.org/blog-post/new-census-results-underscore-security-challenges-aging-indo-pacific.
[27]. For
a brief summary on Japan’s military recruitment needs, see, Gabriel Dominguez,
‘Recruitment
issues undermining Japan’s military buildup,’ The Japan Times, 2
January 2023; David Axe,
‘Japan
Is Running Out Of People For Waging War’, Forbes, 15 July 2020. For
more in-depth studies, see, for example,
Brad Glosserman, Peak Japan: The End of Great
Ambitions (Washington: Georgetown University Press, 2019); Tom Phuong
Le, Japan’s Aging Peace: Pacifism and
Militarism in the 21st Century (New York: Columbia University Press,
2021).
[28]. For brief
outlines on Japan’s military advancements see, Xiao Liang and Nan Tian, ‘The proposed hike in Japan’s military
expenditure,’ Stockholm International Peace Research Institute, 2 February 2023; Takeshi
Sakade,
‘Japan's fighter jet ambitions soaring with GCAP,’ Asia Times, 22 May 2023; Tim Kelly, Sakura Murakami,
‘Pacifist Japan unveils biggest military build-up since
World War II’, Reuters, 16 December
2022.
[29]. Grant Wyeth,
‘Australia’s
Population Dilemma’, The Diplomat, 12 January 2023.