[LETTERS to the editor]Inclusiveness: the new imperativeThe birth of a prince saved the Japanese monarchy from a succession crisis and shelved the intense debate about matrilineal succession. Does this event have any implications for the population dynamics of a nation faced with a plummeting birth rate and an aging population? Yes, as long as it induces raising the birth rate and catalyzes economic growth.
It needs to be seen in a broader perspective. Few will dispute the adverse consequences of a declining population. By United Nations estimates, Japan’s population will decline by 17.5 million by 2050, with the 60+ population rising to 43 percent. Population in the working-age-group, 15-59, is projected to fall from 62.1 percent to 45.2 percent. The fertility rate is 1.3 live births per woman. The aging index is projected to rise from 157.9 in 2000 to 338.2 in 2050.
In South Korea, the fertility rate was 1.5 in 2005. The birth rate has fallen to its lowest level. The proportion of the 15-59 age-group will fall to an estimated 50.4 percent in 2050. The population aged 60 and above will rise to 33.4 percent in 2050. By 2050, the population is projected to shrink to 40 million. According to Finance Minister Kwon O Gyu (IHT, Sept. 13, 2006), the economy needs “a fundamental paradigm shift to ride out new challenges from a declining population, decline in labor force and decreasing national savings.”
Why is a stagnant population worrisome? Using classical supply-demand framework, one can see the impact ― the rise in wages, fall in GDP, decline in national saving, and low level of investment, resulting in low productivity. Anything that induces higher birth rates would be welcome.
Alternatively, increasing labor participation could mitigate its adverse effects. Estimates show that Japan would need 10 million immigrants per year until 2050 for the ratio of the working-age population to retirees to remain at the “desirable” 1995 level. Robert Holzmann (World Bank) observes that “[without] further immigration, the total labor force in Europe and Russia, the high-income countries of East Asia and the Pacific, China, and, to a lesser extent, North America is projected to be reduced by 29 million by 2025 and by 244 million by 2050. The demographic policy scenarios to deal with the projected shrinking of the labor force . . . include moving the total fertility rate back to replacement levels, increasing labor force participation of the existing population . . . and filling the demographic gaps through enhanced immigration.” Policymakers promoting free trade should recognize that global integration gnaws at immigration control just as much as it does on capital controls. To start the developmental path in a society, the approach should be bottom-up, encompassing unskilled immigrants at the lower rungs. Taking pride in the homogeneity of indigenous people is good so long as it does not hinder effective assimilation of aliens. A society needs to embrace other ethnic groups for harnessing their latent potential and eradicating cultural and ethnic barriers. Luigi Guiso, Paola Sapienza, and Luigi Gonzales of the University of Sassari, Northwestern University, and the University of Chicago (2005) have argued that “plain prejudice affects trade.”
Under the aegis of globalization, “inclusiveness” is a sine qua non for economic prosperity. Take the example of South Korea. Many excellent practices are undertaken in Korea for assimilating “the aliens” for their participation in the gentry. This is paving the way for the influx of skilled professionals into the “land of the morning calm.” Among a panoply of noble Korean attributes, the trinity of self-esteem, hard work, integrity has worked in tune for her economic development.
However, on the flip side, there are some discrepancies. For example, proscribing a typical subset of work as something inferior and categorizing them as “3D” meaning “Dirty, Dangerous, and Difficult,” reserved primarily for workers at the lower end of the productive spectrum, is paradoxical in the highly valued work culture.
A holistic approach based on work ethics and a philosophy of motivating the worker is essential. Thus, for instance, “3D” could stand for “Dignity (of labor),” “Devotion (to work)” and “Diversification (of opportunities).” Unless a laborer feels worthy of the job while undertaking his/her rightful employment, in an honorific society no one could have self-esteem. Every profession has its own merits. What is important is devotion to work. A sense of dignity gives an individual self-confidence. Diversifying work opportunities is important to break the shackle of counterproductive dirty and dangerous work. Only when this trinity works could they perform with great aplomb.
When the fever of globalization is gripping and trans-border migration is a dominant trend, one should tread a globalist path with a pluralistic attitude. Shedding “pride and prejudice” will instill a sense of mutual trust between aliens and domestic workers, foster competition and enforce efficiency. Embracing the foreigners rather than alienating them will promote fair competition that will usher in a new work ethic, change the social fabric and remove xenophobia. The opposite, skewed economic patterns resulting from prejudiced preconceptions will jeopardize the mission, damage goodwill and demoralize the competent foreigners.
by Gouranga Gopal Das