Bo-eun leads the digital content team. She has covered foreign affairs, North Korea, tech, economy and gender issues at The Korea Times. She did a short stint at the South China Morning Post in Hong Kong, where she obtained a new perspective on news production and life. Small sources of joy for her are lounging in the sun, having a good latte and swimming.
Demographic crisis looming large over Korea
By Kim Bo-eun
Embracing foreign talent, raising birthrate key to tackling challenges
By Kim Bo-eun
Korea often refers to the course Japan's economy has taken, as the slowdown in growth and diminishing population that preceded in the neighboring country is currently taking place here as well.
Japan's population has been shrinking for over a decade, and the world's third-largest economy is the most-aged society, with the highest percentage of elderly people among countries around the world.
Its population of people aged 65 and above comprised a record 28.41 percent of Japan's population last year, and the birthrate stood at 1.42 in 2019, in a fourth consecutive year of decline.
Korea's situation is not much different. While the people aged 65 and above account for 15.7 percent of the population, as of this year, the figure is forecasted to rise to 20 percent in five years.
Korea's total birthrate, the total number of children that would be born to a woman if she were subject to the prevailing rate of age-specific fertility in the population, however, is lower than that of Japan. The figure stood at 0.92 percent in 2019, in a fourth straight year of decline since 2016.
An influx of immigrants is regarded as a key means to tackle the population crisis, but forecasts show the percentage of foreigners in the Korean population will remain at less than 5 percent in 2040.
According to recent data from Statistics Korea, foreigners are set to account for 4.5 percent of the total population two decades from now. The figure is up from the current 3.3 percent as the agency predicts a growing foreign population from 2017 to 2040.
"The forecast figure for foreigner among the total population in 2040 is based on the assumption that the number of incoming foreigners increase," a Statistics Korea official said.
She said the growing percentage of foreigners among the population here is also due to the shrinking number of Koreans. The agency forecasts Korea's population will shrink by 1 million over the same period.
While foreigners are set to account for a slightly higher percentage of the population in 2040, views are that this will be insufficient to tackle the problem of a shrinking working population owing to the falling birthrate and aging population.
A dwindling workforce is critical to the country's productivity and GDP growth.
The effects are expected to hit the economy starting next year, based on a fall in private consumption. Data from the presidential committee on tackling low fertility and aging population shows private consumption is expected to fall as the student population shrinks and education expenses decrease accordingly. This is against Korea's backdrop, where fees for private academies and lessons outside of school constitute a large part of household expenditure.
Ha Joon-kyung, a professor of economics at Hanyang University, who has conducted studies for the Presidential Committee on Aging Society and Population Policy, said the declining population crisis should be tackled by bringing up the birthrate.
“Rather than policies with temporary effects, the focus should be on policies with lasting effects, which is why the government should focus on bringing up the fertility rate. The reason women do not give birth is because under the current system, they take on most of the burden of child rearing,” he said.
“The government should assume more of the burden, by setting up greater public infrastructure for childcare and education. The reason why the fertility rate is still low is because the government's expenditures for policies on tackling the issue remains low _ it is less than 2 percent of the GDP,” Ha said.
Institute for Global Economics Chairman Jun Kwang-woo, said, "Rather than placing a focus on the number of incoming foreigners, the focus should be shifted to what kind of skilled workers Korea will attract."
"Currently, a large portion of foreign workers in Korea are in jobs that do not require a particularly high level of skill. There have been talks of setting up a separate immigration agency to attract more foreigners, but there are other means Korea could and has already taken into consideration as well, such as shifting production to overseas markets."
"Policies surrounding attracting foreign talent should be considered from a bigger picture that takes into account the development of new technology, including artificial intelligence. Future strategies should be centered on two pillars ― securing talent and developing national competitiveness," the economist, who also served as chairman of the Financial Services Commission, said.