Vanishing Act; The Global Challenge Of Shrinking Population

April 2023- India overtook China in the world population, with a whopping total of 1.4 billion inhabitants. While countries like India and China struggle to control the number of citizenry, some nations like Italy and Japan suffer with the wary of shrinking populations. As per the Lancet Study prediction, Japan is estimated to have a population reduced from 61 million to 28 million from 2017 to the end of the century while Iran is projected to be the oldest country in the next 30 years.  

In this article we delve into the origin, socio-economic causes, consequences and the measures taken by these suffering nations.

What Leads To The Warns Of a Jaw-Dropping Fertility Rate?

Be it the ‘ Hum Do Humare Do’ or ‘ One Child Policy’, the dearth of ‘baby-boom’ has been haunting some of the leading nations of the world like India and China respectively. India, as the largest democracy in the world, makes up a total of 18% of the world’s population, with a population density of 481 per sq km. Amid this mismanagement, we have nations like Brazil, Nigeria, Italy, and Japan and countries like Luxembourg, providing land for free to recover their population. 

Some significantly influential factors play a major role in causing this phenomenon.

• Low Fertility Rates with added Migrant Exploitation- 

Japan has the world’s oldest population, with a job force declining by 35%. While a country needs a ratio of 2.1 births per woman to maintain the population, the country only has a poor 1.4 which leads to a severe decline in the same.

• Emigration and Slow Living Pace – 

Italy, whose population is also estimated to be half from 61 million to 28 million from 2017 to the end of the century, has been facing the issue due to emigration reasons. This also includes the subsequent increase in the immigration population which represents 8.75% of the population. Prime Minister Meloni had said to issue 452,000 work visas to non-EU nationals from 2023-2025.

• Economic Hardships-

Poorer countries with low per capita income and weak infrastructure facilities find it difficult to inspire couples to undertake parenthood. Marriage and children within marriage have been rapidly declining in Iran since 2020, with a 1% annual drop in the population. 

• Internal and International Political reasons-

Countries like Bulgaria and especially Ukraine have lost major shares of their population due to the end of communist rule in Bulgaria and warfare reasons in Ukraine respectively. The countries are assumed to sharply decline by 22.5% and 19.5% by 2025 respectively.

The Dynamic Consequences On The Economy Due To This Phenomenon

A declining birth rate can have both a positive and a negative impact depending upon the social scenario of the country. One of the most significant positive impacts is the increase in the GDP per capita and growth in the average standard of living. During the period from 2003-2006, the economies of Germany and Japan recovered, with both the total and per capita GDP increasing massively in the year 2005. More recently, the per capita GDPs of both Japan and the USA were fairly similar in 2023, 0.7 and 0.8 respectively, with Japan crossing the mark in 2017.

Subsequently, the phenomenon also has its share of negative impacts, which get into the highlight. The increased dependency ratio, decrease in innovation capacity, deflation and underpopulation are a few of the most serious consequences. Cuba reported a dependent ratio of 45.9% in 2021 while Japan stood with a dependent population of 71%. The real GDP of Italy contracted by 0.4% by the second quarter of 2023. Even a stable economy like the Netherlands is facing an economic downturn due to a population decline, which is estimated to reach 16% by the end of 2040. In this scenario, the overall turnover decreases, with a significant fall in the growth of the education sector, housing prices and care facilities. Overall the economic activities slow down, leading to a fall in the nation’s real GDP.  Recession and low workforce availability are the issues that affect such kinds of nations the most.  

What Are The World Economies Doing About It?

With the lowest birth rates in the world, these nations undertake innovative and lucrative measures to tackle this growing demographic crisis. The national-level solutions can range anywhere from providing a substantial amount to couples when they produce a child, to providing housing for rates as low as $1.

• Tokyo entitles parents to a monthly allowance of 15000 yen from a new child to two years old. In 2023, when the annual birth rate dropped below 800,000, the country set a new benchmark, planning to provide families with 10,000 yen per child until the age of 10 and offering free higher secondary education. South Korea, which recorded the lowest fertility rate in 2023, is undertaking desperate initiatives to increase the population by 44% by 2050. The government not only provides a 300,000 won bonus to infant parents but also a separate cash bonus of 100,000 won and 2 million won to expectant parents. Authorities, in an eccentric attempt even introduced a policy of turning off the office lights by 1930, so that people could go home early and consummate to produce kids. 

• Turkey on the one hand cashes out actual gold coins to mothers for their firstborn and dissuades women who abstain from entering into motherhood. Italy, on the other hand, provides homes for just 1 euro to expecting couples, paying a large sum to people who agree to reside in towns with a dwindling population. 

• As bizarre as it may sound, vasectomies and abortion are banned in Iran, with contraceptives being offered to women suffering from grave health issues, after much medical speculation. 

• Fertility-promoting government advertisements like – “I am a patriotic husband and you are a patriotic wife, let’s do our civic duty and manufacture life” in Singapore, make it a household responsibility for couples to produce children. 

Notwithstanding the root causes of its origin, the phenomenon of shrinking population, though initially comes as a boon for the economy, increasing the goods and services surplus. It eventually poses an overall economic slowdown and threat to nations, such that even Putin funds a $7600 ‘ maternity capital’ to women, increasing the population density.