Key point: Not an easy problem to fix?
Threats to South Korea’s survival are not only from the North. Even as Seoul seeks detente with its communist neighbor while engaging in an increasingly bitter row with Japan, the nation’s demographic decline could see its economy facing a similar structural slowdown that puts a permanent brake on growth.
The challenge facing Korean policymakers was highlighted by a recent government report, which showed that its falling fertility rate could see its population start declining as early as 2020.
Previous estimates in 2016 suggested the population would peak in 2023 under only the most pessimistic scenario.
Released in March this year, the report by Statistics Korea predicted South Korea’s population could peak at around fifty-one million this year, before dropping to the 1972 level of around thirty-four million by 2067 under the most pessimistic scenario.
Seniors aged sixty-five and older would account for nearly half the population by 2065 under even the medium-growth scenario, making it the grayest developed nation in the world and potentially threatening its military capabilities.
In contrast, immigration-friendly countries such as the United States, Canada and Australia are seen having a quarter or less of their populations who are sixty-five years old or older over the same period.
South Korean women are clearly having fewer children, according to the latest figures, with a fertility rate—the average number of children born per woman—dropping to a record low of 0.98 in 2018. This was lower than Japan’s 1.43 and well below the estimated “replacement-level fertility” rate of around 2.1 for most nations.
In 2017, just 14 percent of South Korea’s population was sixty-five years old or older—around half Japan’s share. Its proportion of working-age people between fifteen and sixty-four was 73 percent, but this could shrink to just 46 percent by 2065 under the medium-case scenario, putting it even below Japan’s 51 percent ratio.