The downfall of the Korean economy (1) — South Korea’s Korea’s CRAZY Birth Rate (0.78), History of Compressed Growth in Korea and Diagnosis of Low Birthrate Problems
“South Korea will lose about half of its population every generation” by Elon Musk. The highly compressed growth of the “Miracle on the Han River” has greatly improved the quality of life for Koreans, but it is now facing a huge downturn.
In contrast to the Bill & Mullin Gates Foundation’s multibillion-dollar efforts to combat light poverty in low-income countries, the population of low-income countries decreases as the quality of life improves and low birthrates.
Demographic Changes
Most countries in Europe, North America, and Asia have experienced demographic changes such as declining birth rates and aging after the universalization of popular education and improved quality of life following urbanization, explosive population growth and technological progress.
Korean Development History
Based on President Syngman Rhee’s introduction of six-year compulsory elementary education in 1948 and land reform that resolved inequality, the Park Chung-hee administration promoted an industrialization and export-led national development strategy for “liberation from the fear of poverty and war.” In 1967, the population increased to 30 million, and the population structure of young people, an educated human resource, led to rapid economic growth in Korea over the past 60 years.
In the 1990s, Korea’s catch-up strategy, which seemed forever impossible as the future vision of “industrialization but let’s go ahead of the information age,” was successful, and in 2011, it became a member of a club of 50 million and $1 trillion in trade.
Population Decline in Korea
However, due to the government’s failure in population policy, the total population began to decline in 2021, along with changes in the demographic structure caused by ultra-low birth rates and rapid aging over the past 20 years.
Challenges in the 2020s
As the U.S.-China trade dispute and tax evasion are in full swing, it is difficult for the Korean economy to take another leap forward due to falling exports and sluggish domestic consumption. In the 2020s, low growth and long-term stagnation of the Korean economy and decline of national power are expected due to increased youth unemployment, increased social security costs for the elderly, and local extinction due to population concentration in the Seoul metropolitan area.
Global Population Outlook
According to the UN’s 2022 Population Outlook Report, the global population, which reached 8 billion in November 2022, is expected to peak at 10.4 billion in 2100 and gradually decrease afterwards.
As the world’s average fertility rate has continued to decline since it hit 2.4 in 2021, the increase in the number of children, including births, will stop, the productive population aged 15 to 64 will increase by 1.4 billion, and the elderly population aged 65 or older will increase by 1 billion.
By continent, Europe and North America’s population, which stood at 1.12 billion in 2020, will remain the same in 2100 (decreased by 120 million in Europe, increased by 120 million in North America), and the Asian population of 4.64 billion in 2020 will remain almost the same in 2100.
Africa, on the other hand, is expected to undergo a low birth rate and aging process after escaping poverty due to population explosion and economic growth, which increased from 1.34 billion in 2020 to 4.2 billion in 2100.
Labor Force and Aging
As the world-class baby boomers retired at the age of 65 in the 2020s, the population structure of 38 OECD advanced countries, including Korea, will be changed to a thicker population structure than children due to labor shortages.
Korean Population Projection
In 2100, the Korean population is expected to decrease to 13 million, and one in two Koreans is expected to change to an elderly country over the age of 65 (Korea Collapse, 2022). The problem of population decline in Korea, whose total fertility rate fell to 0.78 in 2022, is the most serious in the world, and has become a task for the future of Korea and the survival of the people.
Challenges of the Fourth Industrial Revolution
In the 2020s, the fourth industrial revolution, in which big data processing capabilities such as artificial intelligence (AI), drones, robots, the Internet of Things (IoT), unmanned vehicles, and bio are directly related to national competitiveness, is expected to make progress. With the emergence of artificial intelligence, jobs are expected to disappear, and income inequality and polarization are expected to intensify, fostering the middle class is also important for sustainable growth.
Korea’s Competitiveness
Currently, Korea is far behind the U.S., Europe, and Japan in terms of competitiveness in the fourth industrial revolution. Along with technological innovation such as artificial intelligence and the Internet of Things, there is a great shortage of industrial field labor, including high-quality personnel in charge of creative innovation in all areas such as economy and society and education.
Fundamental innovation in university education is required to secure manpower for the fourth industrial revolution as soon as possible in the future and to provide the cause of population problems and economic crisis.
Population Policy
Since 2006, Korea’s population policy has established a “Basic Plan for Low Birthrate and Aging Society” and introduced family support population policies that European countries such as France and Sweden have developed over decades, including “low-income family and childcare support,” “work-family balance,” and “youth jobs and housing.”
Failure of Population Policy
Only the appearance of population policy was introduced to formally list tasks, and the budget was overpacked, so the actual family policy budget was significantly smaller than that of European countries, and the continuous decline in fertility rates was not suppressed. In the end, in 2018, policymakers wasted time and budget by aiming to “improve the quality of life” of individuals instead of abolishing the policy goal of suppressing low birth rates (1.5 people).
Quality of Life and Happiness
The “quality of life” of Koreans, who have grown into the world’s 10th-largest trading power, ranks among OECD countries in terms of quality of life and happiness, including child abuse, suicide (the number one cause of death for young people) and elderly poverty.
Impact on Economic and Social Reform
The failure of population policy and low public happiness index with a record ultra-low fertility rate (0.78 people) in 2022 is fundamental to the failure to boldly launch economic and social reform measures to restore the middle class and alleviate inequality and polarization after the IMF in 1998.
Youth Unemployment and Social Issues
In reality, the birth rate is plummeting due to the increase in unmarried and late marriages for economic reasons, such as the high youth unemployment rate and the increase in non-regular workers who do not guarantee a stable income for the majority of young people cannot hope for the future.
Future Challenges(What should we do?)
Even if childbirth, parenting, and education expenses are increased, it will be difficult to increase the fertility rate for a short period of time. As the number of single-person households for young people and the elderly increases, the family is disbanded and the sense of community collapses, showing signs of generational conflict over resource allocation. There is a need for a leading population policy that goes beyond the population policies of France, Germany, Sweden, and Japan.
