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MENAFN - Khaleej Times - 09/10/2012

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(MENAFN - Khaleej Times) AS JAPAN'S population shrinks and China grays fast, a battle is shaping up in the Philippines, pitching its demographic and economic future against orthodoxy. The issue: Fewer babies or more?

A global demographic dichotomy is coming into focus in the Philippines where the Congress is to vote soon on legislation known as the Reproductive Health Bill, which would enable government clinics to provide contraceptive advice and devices. President Benigno S. Aquino III supports the bill, and for this he's been denounced by the Catholic Bishops' Conference of the Philippines, representing the celibate hierarchy of a politically powerful church in this majority Catholic country. The issue of government support for contraception has been raised many times over the past four decades, and this bill has been in the works for two years already. Opinion surveys suggest that the majority of Filipinos favor the bill, and Aquino's current high popularity should help its passage. But opposition remains formidable.

The Philippines fertility rate is 3.1 births per woman. High population growth - 35 per cent of the population is under 15 - is often cited as the reason why per capita income growth in the Philippine has lagged far behind that of neighbouring countries such as Thailand and Indonesia.

All the countries in East Asia with rapid declines in fertility have benefited by enjoying high savings rates and falling dependency ratios. But that is now changing so future growth will be much harder to achieve and several countries face future aging shocks more severe even than Japan's. The median age of Japan's population is now 45 and despite Japanese longevity, the total population has begun to decline. South Korea and China will likely be in the same position by 2030 or earlier. Meanwhile, the Philippines is struggling to keep economic growth far enough ahead of population to raise living standards significantly.

At the other end of the fertility policy spectrum from the Philippines is China, which has had three decades of its one-child policy, using penalties and forced abortions to reduce its population growth. The crudity of China's enforcement is emphasised by the fact that its neighbours saw equally steep falls in fertility with no compulsion.

The consequences of both too many and too few babies show up in dependency ratios " the young and old dependent on those of working age. A higher ratio of young dependants usually correlates with increased poverty. China currently has a low overall ratio of around 38 per cent, but this is set to rise to 45 per cent by 2030. Thailand is roughly similar. Both nations already have almost static working-age populations. At the other end of the scale, the Philippines dependency ratio is 63 per cent " assuming a gradual decline in fertility that would still be 55 per cent by 2030.

If there is a middle way between the baby boom and baby bust, it's provided by Indonesia, which has seen a gradual fall in fertility, now around the long-term stabilisation level. Its total population should stop growing in about 30 years.

Projections of median age reveal the challenges ahead. By 2030 the median age will be just 22 in the Philippines, half that of South Korea, 47; China's will be 43 while Indonesia will be at 35 " the same as China and Thailand today. Thus while today's problem is the high level of poverty in the Philippines due to high fertility, tomorrow's problem will be avoiding a decline in living standards in countries with aging populations and declining workforces.

East Asia falls behind Western Europe in fertility rates despite government exhortations in Japan, Korea and Singapore, even some financial inducements to having children. There appears to be no easy answer, but the experience of north European countries plus Australia and New Zealand may provide a guide. France, the United Kingdom, the Netherlands and all of Scandinavia and the antipodean countries have rates of 1.9 and above, yet all show high female participation in the workforce " not as high as China's, but higher than Japan and Korea " and strong gender equality laws and practices.

In most of East Asia not only are the opportunity costs of children high, but there's reluctance on the part of many employed and well educated women to marry and risk submission to male assumptions of superiority. Demographic changes are unpredictable, and fertility may recover without government help or social change. But don't count on it.

Philip Bowring is a Hong Kong"based columnist and a former editor of the Far Eastern Economic Review


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