Japan eyes stop-gap demographic solutions as economic woes pile up

The Japanese government is planning to tackle its mounting demographic problems by introducing subsidies for fertility treatment as well as financial provisions to aid single-parent families, local media reported Saturday.

Under the new measures and as part of Prime Minister Shinzo Abe's campaign to push his "dynamic activation of all citizens" campaign, to tackle Japan's rapidly aging and shrinking population, a panel of experts have been convening on implementing new policy measures to be announced next week, against a backdrop of worsening economic languor amid concerns in some quarters that the government's solutions are short-sighted.

The panel, comprised of government ministers, has been charged with ways to enhance couples' chances of having kids by increasing subsidies for both male and female fertility treatments, the latter of which, particularly in vitro fertilization (IVF) is notoriously expensive in Japan, with current costs being a prohibitive factor for some couples looking to start or expand their families.

In addition to tackling fertility issues in the country, the government is also planning to unveil new provisions for single-parent families, including an increase in childcare benefits, as well as boosting financial assistance for those taking time off work to tend to family matters, including childbirth, child rearing as well as taking care of the elderly.

The move by the government comes as Abe is struggling to balance the economy's tepid recovery with ballooning social welfare costs, as economists have recently taken aim at his "Abenomics 2.0" -- newly-launched economic policy mix aimed at beating deflation and expanding Japan's nominal GDP by 20 percent to 600 trillion yen (4.88 trillion U.S. dollars) over five years.

With the world third-largest economy slipping into a technical recession on Nov. 16 in the third quarter, owing to waning business investment and inventories, marking the second time since Abe came into office in 2012 that the economy has entered a technical recession, the prime minister is under increasing pressure to deliver on the economic promises that saw him voted into power for the second time.

Underscoring Japan's urgent need to tackle its ever-pressing demographic problems, the latest data released by the Cabinet Office showed that Japan's economy contracted an annualized 0.8 percent in the July-September quarter of 2015, marking a second straight quarterly contraction, following a revised 0.7 drop in the second quarter.

Atsushi Takeda, an economist at Itochu Corp. in Tokyo, has said that further stimulus may be imminent as the prime minister has laid out lofty growth goals of expanding Japan's nominal GDP by 20 percent to 600 trillion yen over five years, and the central bank is under increasing pressure to hit a 2 percent inflation target, following decades of Japan's economy being mired in deflationary pressure and public debt at twice the size of Japan's economy -- the worst in the industrialized world.

"Japan's economy is in a soft patch, and even though it may rebound in the coming months, the momentum will probably be very weak. The government will probably have no choice but to take action to stimulate the economy, and pressure for additional monetary easing will likely build up again," Takeda said.

Takeda added that business spending was unlikely to increase in the near future, owing to concerns about a slowdown in emerging economies, and despite Japan's Economics Minister Akira Amari maintaining that the economy was on a "moderate recovery path" despite some weakness and that it would "continue to improve gradually" even though overseas economies "posed downside risks," economists remain concerned about Japan's mid-to-long-term prospects.

Concerns have been raised from both financial and anthropological camps here, with experts from both sides calling for Japan to ease its rigid immigration restrictions and invite labor solutions from overseas to ease an impending demographic nightmare, that threatens not only the health of the world's third-largest economy, but, by virtue, that of its immediate neighbors and the global community at large.

Thus far, however, the government has flatly rejected such obvious measures as evidenced by Japan's on-going, yet largely unspoken "no immigration" policy, highlighted by Justice Minister Mitsuhide Iwaki's recent skittish remarks on the subject when quizzed on Japan's stance towards the Syrian refugee crisis. Endit