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Fastest-Aging Society Greets Re-elected Ma

Chinmei Sung Bloomberg.com 01/17/2012 18:00
Taiwan's President Ma Ying-jeou

Taiwan's President Ma Ying-jeou

Ma Ying-jeou’ssecond term as president of Taiwan, secured in an election win three days ago, may be one of the island’s last opportunities to address the consequences of something unmentioned on the campaign trail: the world’s fastest-aging society.

Ma’s push for closer ties with China won a fresh mandate as he defeated Tsai Ing-wen, who said the tighter bonds may risk Taiwan’s autonomy. While Taiwan’s top planning body predicts the island’s population will start falling in 11 years, coping with an aging society and low birth rates were absent from the debate because the challenge is intractable, said Chuang Meng-han, an industrial economics professor at Tamkang University in Taipei.

Failure to tackle the change, by reducing the cost of raising families or allowing immigration, will leave Taiwan’s labor force shrinking, putting pressure on growth and asset prices. The economy’s trend rate of expansion is poised to fall to about 3.5 percent annually in the next decade, from 5.1 percent in the 20 years through 2010, according to DBS Bank Ltd.

“The impact will be huge,” said Chuang, who has analyzed the housing market. “Most people aren’t well-prepared for the aging society. The later the government faces the consequences, the more difficult they will be to deal with.”

Taiwan’s 2010 total fertility rate was 0.9 babies per woman, according to baseline estimates compiled by Taiwan’s Council for Economic Planning and Development. That’s less than in the 196 other countries and territories tracked by the United Nations. Taiwan’s 23 million population will fall to less than 19 million by 2060, according to the council.