Ambassador (retd.) Kishan S Rana, Honorary Fellow, Institute of Chinese Studies.

The word ‘Japanification’ has come to mean a sharp decline in the population and workforce, as a result from a huge secular decline in the birthrate, to a point where it leads to a contraction of the economy, and a huge threat of a burgeoning number of old age dependents, which alters the very structure of life. In 2005, its ‘total fertility rate’ (TFR), i.e. the number of children per woman) fell to 1.26; it has risen slightly since then, but experts estimate this as a change in the timing of birth, and not a long-term change.

Is that the likely fate of other countries where the TFR has fallen to well below the ‘replacement rate’ of 2.1? This is possible, but perhaps not in that same way. A key difference is that they are more open to immigration; the US is the best example, in that much of its economic dynamism owes to the continual arrival of migrants, driven by a hunger for advancement. Let us consider Japan’s basics.

• The population of 127 million is projected to drop to 82m in 2060. Those in the working age (15 to 64) will crash from 78m to 48m. Yes, many will work till the age of 70 and older, but that does not reverse demography, even though the numbers are projections.
• Innovation gets a boost in such situations, and we may count on Japan’s ingenuity to forge ahead with technology change. But there may be limits to how far this can work.
• Labor force scarcity can be partly overcome by getting more women to work, which would represent major societal change.
• As the article below (The Economist, 20 August 2016) indicates, it has begun to import low-grade labor from South Korea, the Philippines and even China. For a classic monoculture country that has stoutly opposed immigration, this is a major change, implemented quietly. We may imagine the future consequences in the fraught relations with its two immediate neighbors.
• Japan now has 2.23 million foreign permanent residents; very few ever become citizens, much as the situation was in Germany, another country that was intrinsically averse to immigration, which brought in ‘guest-workers’ from Turkey starting in the 1950s.

Other factoids. In 2015, Japan gave citizenship to a mere 9469 foreign residents. In 2013, the population fell by 244,000. In 2014, 12.5% of the population was over 75; this creates a huge need for care-givers for this growing segment of the population.

Demography is destiny.

 

BEGINS

The Economist

Aug 20th 2016 | SHIN-OKUBO |

Immigration to Japan

A narrow passage

Begrudgingly, Japan is beginning to accept that it needs more immigrants

IN THE Shin-Okubo neighbourhood of Tokyo, smells of Korean food and snatches of the language waft in the air. A supermarket selling kimchi sits next to an Indian-run kebab shop—the latter complete with leaflets promoting Islam, the religion of the Calcutta-born owner. A local estate agent advertises staff that speak Chinese, Vietnamese and Thai alongside the floor plans for tiny Tokyo apartments.

Shin-Okubo is a rarity in Japan. The country has remained relatively closed to foreigners, who make up only 2% of the population of 127m, compared with an average of 12% in the OECD, a club of mostly rich countries. Yet Japan is especially short of workers. Fully 83% of firms have trouble hiring, according to Manpower, a recruiting firm, the highest of any country it surveys. And the squeeze is likely to become much worse. The population is projected to drop to 87m by 2060, and the working-age population (15-64) from 78m to 44m, because of ageing. The Keidanren, the Japan Business Federation, and prominent business leaders such as Takeshi Niinami, the head of Suntory, a drinks company, have long called for more immigration.

All this is starting to make a difference. Last year the number of foreign permanent residents reached a record 2.23m, a 72% increase on two decades ago—and the number of people on non-permanent visas is also rising. But the goal seems to be a surreptitious increase in the number of temporary workers and a more accommodating system for skilled workers, not the settlement of foreigners on a grand scale. Only tiny numbers of foreigners become Japanese citizens (see article) and even fewer are granted asylum: only 27 in 2015, a mere 0.4% of applicants.Shinzo Abe, Japan’s prime minister, says he would prefer to raise the relatively low proportion of Japanese women who work, and to keep all Japanese working later in life, before admitting droves of foreigners. But his government has nonetheless taken a few small steps to boost immigration. It has quietly eased Japan’s near-ban on visas for low-skilled workers, with agreements to allow foreign maids to work in special economic zones. It is now talking about relaxing requirements for Filipino carers. The authorities have also made student and trainee visas easier to obtain, and turned a blind eye to those who exploit them to recruit staff for jobs that involve very little study or training at kombinis (the ubiquitous corner stores, often staffed by Chinese) or in forestry, fishing, farming and food-processing. It may extend trainee visas from three years to five. Mr Abe has also boasted that he will reduce the time non-permanent residents need to live in Japan before becoming eligible for permanent residence to the “shortest in the world”—probably to less than three years (far from the shortest) from the current five.

A few voices advocate opening the door more widely. Hidenori Sakanaka, a former immigration chief who now heads the Japan Immigration Policy Institute, a think-tank, reckons Japan needs 10m migrants in the next 50 years. At the very least the country needs a clear policy on bringing in menial foreign workers, rather than ignoring the abuse of student and trainee visas, says Shigeru Ishiba, a prominent lawmaker in the Liberal Democratic Party who is expected to challenge Mr Abe for the party’s leadership in 2018. The government needs to lay out the specifics of how many people it wants to attract and in what time-frame, he says.

Public opinion seems to be gradually shifting. The authors of a recent poll by WinGallup were surprised that more Japanese favoured immigration than were against it—22% to 15%—although a whopping 63% said they were not sure. A warm embrace for lots of foreigners is unlikely. Japan’s nationalists do not have the power of Europe’s broad-based anti-immigrant movements. But the country prides itself on its homogeneity, and although the media no longer reflexively blame foreigners for all social ills, discrimination is still rife. Many landlords will not accept foreign tenants, ostensibly, says Li Hong Kun, a Chinese estate agent in Shin-Okubo, because they do not adhere to rules such as being quiet after 10pm and sorting the rubbish properly (a complex task). Others suggest terrorist attacks in Europe as a reason to keep Japan for the Japanese. Brazilians of Japanese origin, who were encouraged to migrate to Japan in the 1980s, have never really been accepted despite their Japanese ethnicity, notes Tatsuya Mizuno, the author of a book on the community.

Even Mr Sakanaka and Mr Ishiba think all migrants must learn the language and local customs, such as showing respect for the imperial family. But the economic case for a bigger influx is undeniable. For those, like Mr Abe, who speak of national revival, there are few alternatives.

ENDS