Despite Demographic Decline, the Sky Isn’t Falling in Japan
An economist’s refreshing perspective on the typically anxiety-inducing issue of Japan’s falling population — and the detrimental effects often predicted for its economy as a result.
(May 25, 2016, OTTAWA, ON.) In a departure from the usual fears and admonitions on Japan’s falling population, the co-director of the Australia-Japan Research Centre, Shiro Armstrong, suggests it would be more practical for Japan’s government to accept that its economy is going to contract given present demographic trends, and to shift its focus on maintaining living standards and increasing per capita incomes. This is a philosophy Population Institute Canada would fully endorse.
“What does negative GDP growth…mean when the population is shrinking?” he asks.
“Perhaps not as much as we thought. If GDP does not grow, per capita incomes may rise as the population falls. And Japanese have saved and invested overseas so they hold assets abroad that return income. Gross national income may differ considerably from gross national product…”
Japan today is a model of the challenges that await many developed countries.Thus it’s important to note Mr. Armstrong’s observation that despite a contracting economy, the Japanese people “remain rich, live very long lives…and Japan is safe, clean, comfortable and modern. There is no sense of crisis among the Japanese people and no feeling of urgency driving drastic changes.”
Ballooning human population (an additional 80 million people annually) coupled with over consumption are major contributors to the increasing environmental stresses of our planet. They diminish quality of life globally while engendering political instability and national security concerns. PIC believes it crucial that we shift away from the traditional prescription that prosperity and economic growth are primarily tied to population growth — a model that is unsustainable on a planet with finite resources.
This article offers a sober, welcome — too rare — perspective in economic thinking in this regard.
Contact: Madeline Weld, PhD
President, Population Institute Canada