The subject of our session held on May 16^th was proposed by business members of the group at the last session, as these demographic changes are beginning to impinge on their long range plans.  It was rated one of the best KBF sessions ever held.

Korea’s birthrate continues to fall, forcing demographers to recalculate the decline in the future population and its age composition, economists to reduce future GDP growth potential and vexing NPS calculations with prospects for unfundable social security provisions by the 2060s.  It also has impending implications for land prices and the type of building appropriate for the future.

In one sense the apocalypse is still a decade away because 50% of Koreans over 65 continue to work.   In another sense it is already here with schools and universities without enough children and students, rural areas with shrinking populations, the armed forces with falling numbers of conscripts and big companies without enough entry level employees. At the same time current elderly poverty levels continue to point towards the majority of elderly people without adequate income in the future.

Over the last  16 years the government spent US$200 billion on increasing fertility without results, and in 2024 will spend $30 billion more. So while there still might be ways to increase the birth rate up towards replacement levels solutions to date are not evident.  It would take 25 years of replacement level births to put the economy and society back on a normal growth path.

Alternatives include increasing immigration, automation, robots, changing society and other ideas.

In the session we drew parallels from Japan in which 2 of the 3 lost decades reflected the decline in population.  We had a recording of an interview with the OECD team which had just completed but not yet published a report on the issue and a remarkable online intervention by Professor Cho Young-tae on the iron hand of demographics.   Looking for solutions Rep Jasmine Lee, the foreign born national assembly member talked about immigration policy and then we looked at job losses in relation to AI replacements and robots and concluded with the meager prospects for the majority of older citizens and the bite this would take out of consumer demand, and the expected implications for falling land and property prices.  We will also gave the usual economic update based round Q1 GDP results and other indicators which will be updated to include May export figures and other recent data..

If you missed the session or want to discuss these issues more please register for this exciting second chance.

Yours sincerely