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Low Birthrate Will Cause Worker Shortage by 2020

B= y Yoon Ja-young
Staff Reporter

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South Korea will see falling economic g= rowth potential due to a dwindling workforce amid low birthrates and an aging population, Finance and Economy Minister Han Duck-soo<= /span> said.

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H= an said the country will lack 1.52 million workers in 2020 as the economically acti= ve population will steadily fall in coming years.

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T= he country’s growth potential, the maximum growth rate a country can att= ain without fanning inflation, is expected to fall to as low as 0.7 percent in = the 2040s from 2.9 percent in the 2020s and 4.6 percent in the 2000s.

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&= #8220;Low birthrate and an aging workforce are big concerns for the economy and socie= ty as a whole,” the finance minister said at a forum Wednesday.

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Korea’s birthrate fell to a record low of 1.16= in 2004, lower than 2.04 of the United States and 1.29 in Japan. As a result, society is aging at an alarming speed.

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A= nalysts believe it will take only 18 years for Kore= a to become an aged society, where people aged 65 and over account for more t= han 14 percent, whereas it will take 72 years for the U.S. and 24 years for Jap= an.

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T= he average age of productive population, those aged between 25 and 64, will so= ar to 47.6 years in 2050 from last year’s 42.4. As a result, economic gr= owth is expected to slow down. “Rate of growth potential will decline from 4.56 percent in 2000s to 0.74 percent in 2040s,” Han said.=

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A= s the population grows old, Koreans’ tax burden will increase and the government will see a fiscal deficit equivalent to 10 percent of gross dome= stic product (GDP) in the 2040s, according to the minister.

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H= e said the government will set up measures to tackle the problems, such as helping= to support working mothers raise children and encouraging senior citizens to j= oin the labor force.

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T= he minister said there is little possibility of a ‘double dip,’ or= a slowdown of the economy after a brief rebound, as it did in 2004. “The economy is backed up by balanced recovery of domestic consumption and expor= t, unlike in 2004 when the economy depended solely on export.”

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&= #8220;In spite of high international oil prices and the strengthening of Korean won,= the economy will achieve five percent growth rate.”

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T= he minister advocated the FTA again, as he does whenever there is an opportuni= ty. “Even when considering losses that the FTA might bring to some econom= ic sectors, an FTA with the U.S. is a must to upgrade our economy.” He pointed out that Korea’s market share in the U.S. decreased to 2.6 percent last year from 3.3 percen= t in 1995, while that of China grew to 14.6 percent from 6.1 percent.=

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&= #8220;When we opened the market in the 1980s, people said domestic confectionaries wou= ld go out of business faced with cookies from overseas. On= the contrary, they (survived) and are even being exported to China and Russia.”

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H= an said the FTA should be based on national harmony instead of groundless criticism= .

<= br> chizpizza@koreatimes.co.kr

04-19-2006 17:23

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