Slumping Fertility Rates in Developing Countries Spark Labor Worries; Birthrates Fall in Thailand, Raising Concerns about Aging Population

Slumping Fertility Rates in Developing Countries Spark Labor Worries
Birthrates Fall in Thailand, Raising Concerns about Aging Population
March 19, 2014 10:31 p.m. ET

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BAAN TAM TA KEM, Thailand—Slumping fertility rates aren’t just a problem for wealthy countries anymore.
Birthrates have fallen in Thailand in recent years, making it one of the poorest countries facing the prospect of shrinking labor pools and an aging population. Such problems, while familiar in Europe and Japan, used to be unheard of in the up-and-coming economies of Southeast Asia.Thailand’s fertility rate has fallen to an average of just 1.6 children per woman, from seven in the 1970s, disrupting centuries of tradition in which children care for their parents. That is forcing political leaders to look for new sources of economic growth and community leaders to search for ways to make the elderly more self-sufficient.
Out here among the green rice fields and plantations of rural Thailand, much of the working-age population has migrated to seek higher-paying work in and around Bangkok. “People just used to hang around gossiping or playing the lottery while waiting for their relatives to send home money from Bangkok or elsewhere,” says Chumleang Panrin, 54 years old, who lives in the village of Baan Tam Ta Kem in eastern Thailand. “Now we’re working together to provide ourselves with some security for the future.”
Other pockets of the developing world also have seen sharp declines in fertility rates, including Brazil, Mexico and parts of India and Southeast Asia. Rising prosperity appears to be one catalyst. If the trend continues, the United Nations projects—in its “low-growth” forecast—that the global population will hit 8.3 billion in 2050 before declining to less than the current level of 7.2 billion by 2100. (Its “mid-growth” forecast projects 10.85 billion by century’s end.)
“Aging is occurring nearly everywhere, and it’s happening faster than many people think,” says Babatunde Ostimehin, executive director of the United Nations’ population program. “If governments don’t respond, they could end up facing a crisis.”
Demographers such as Michael Teitelbaum at Harvard Law School and Jay Winter, a history professor at Yale University, note that already more than half the world’s population lives in aging countries where the fertility rate is less than 2.1 children per woman—the rate required to replace both parents, once infant mortality is taken into account.
This is both an opportunity and a threat. On one hand, it could help preserve natural resources in nations that have been taxed by rapid population growth. But some economists blame a slowdown in population growth for contributing to such disparate events as the Great Depression and Japan’s sluggish growth rates in recent decades.
A slowing birth rate in Thailand means fewer young people to take care of the country’s elderly. WSJ’s James Hookway reports on efforts to help Thai seniors become more self-sufficient.
Some developing nations that built their economies on an expanding supply of young people entering the workforce are rethinking their growth plans. China saw its working-age population decline by 3.45 million in 2012 and 2.45 million last year—a cumulative decline of 0.63% since 2011 and a sign that expansion has ended. It is now relaxing its one-child policy and making it easier for people to move to its cities to try to boost productivity.
South Korea, whose economy is more developed than many others in Asia, is trying to reduce the expenses associated with raising children, including looking for ways to expand child care and to curb the cost of education.
Chile’s government last year announced plans for a “baby bonus” for parents who have a third child, following the lead of countries such as France and Australia, which already have incentives for parents to have more children.
Fertility rates rise and fall. The improving economy in the U.S. helped stabilize fertility rates in 2012 at 1.9 after four years of declines, according to the National Center for Health Statistics. When immigration is taken into account, the U.S. population still is growing.
In the developing world, fertility rates are likely to continue falling. More people are moving to crowded megacities where housing and education are increasingly expensive, and the cultural changes sparked by these migrations are difficult to reverse.
“Singapore’s repeated failed attempts to pump up birthrates show that total fertility rates can be very difficult to revive once the social context has changed,” says Sanjeev Sanyal, a global-market strategist at Deutsche Bank. DBK.XE -0.66%
In Thailand, where the workforce no longer is expanding rapidly, much of the textiles industry has migrated to countries with cheaper wages, such as Cambodia and Bangladesh, where birthrates are higher and average ages younger. Countries with more skilled workforces and higher productivity, such as Vietnam, are soaking up a growing share of manufacturing investments.
Retirees make up a significant and visible proportion of the demonstrators who regularly take to the streets in Bangkok, in occasionally violent political displays against the government of the day.
“There are a lot more of us now, and we have a voice,” said Suchakree Somkong, 74 years old, waving a yellow royal banner with his friends at one recent protest. “This is old-people’s power.”
Younger Thais, meanwhile, are struggling to makes ends meet even as unemployment rates remain consistently low. For many, having more children—or any at all—isn’t going to happen soon.
Angsana Niwat, 38, moved to Bangkok 20 years ago from the rural northeast. She says she has no plans to have more children. Raising her 6-year-old son, she says, is a financial strain.
“If you want to work, you need to find somebody and pay them to look after the kids,” says Ms. Angsana, who no longer works. “Then you have to think about paying for extra tuition to make sure they get into a good university. It’s a struggle to make ends meet.” She is dipping into her savings from her old job in public relations, she says, because her husband’s business installing mirrors barely pulls in enough money to cover mortgage payments.
Some academics such as Therdsak Chomtohsuwan, an economics professor at Bangkok’s Rangsit University, have suggested levying punitive taxes on single people and childless couples, much as former Romanian dictator Nicolae Ceausescu used to do. As income-tax revenue threatens to trail off along with the working-age population, government finance officials are considering increasing consumption taxes such as sales taxes.
In rural villages, community leaders are trying to devise ways to cope with the changes.
In Baan Nong Thong Lim, a 35-year-old monk at the local Buddhist temple began teaching elderly villagers last July how to adjust to life with fewer young people around to care for them. The monk, Phra Weera Sripron, gave lessons on how to coax lime trees to yield fruit all year round by constraining their roots in upturned cement pipes, and how to grow mushrooms, a cash crop, in homemade, darkened gazebos.
“At the same time we teach them about self-sufficiency and other Buddhist principles,” says Phra Weera, who sports close-cropped salt-and-pepper hair with his saffron robe. “There are many more people coming in to the temple now.”
Local villagers agree. “When we came to the temple before, we would just contribute merit for the next life,” says Sanit Thipnangrong, a 58-year-old grandmother. “But by doing this, we can improve our prospects in this life and not wait around for anybody else to help us.”
Some Thais contend that rather than trying to persuade people to have more children, the nation needs to figure out how to make do with fewer.
Mechai Viravaidya, a veteran health campaigner, picked up the nickname “Mr. Condom” in the 1980s when he launched a program to encourage Thai women to have fewer children and to protect against AIDS. He traveled the country teaching the proper use of contraception to nudge down birthrates and improve living standards.
“People aren’t going to start having more children,” he says. “That horse has already left the stable. What we are doing here is teaching elderly people in rural communities to learn more, earn more and increase their own productivity.”
To that end, Mr. Mechai founded the Mechai Bamboo Development School four years ago a short drive from the temple at Baan Nong Thong Lim. In addition to their academic curriculum, students learn about agriculture techniques to boost yields and produce marketable items such as limes all year round.
The goal is to teach Thai youngsters—and their parents, grandparents and guardians, who drop in frequently—how to produce more. Lecturers from nearby colleges stop in regularly to tell students how to find markets for their products and earn cash. Mushrooms and bean sprouts are potentially big earners, Mr. Mechai says. “The yield on bean sprouts is 700%,” he says. “That’s better than marijuana.”
The school also aims to redress some of the shortcomings of the country’s education sector. In last year’s Program for International Student Assessment tests, run by the international Organization for Economic Cooperation and Development, Thailand, with a per capita income of just over $5,000 a year, lagged far behind competitors such as China, South Korea and Singapore, ranking 48th of the 65 countries participating.
In the nearby village of Baan Tam Ta Kem, Ms. Chumleang has organized the residents to adopt many of the smart-farming techniques pioneered at Mr. Mechai’s school.
A decade ago, the area was mostly thick jungle. But now land has been cleared to raise a variety of crops, including limes and orchids. The villagers also produce local delicacies such as crickets fried with rock salt and fiery chili peppers, and homeopathic remedies such as pillows stuffed with herbs that they sell as far away as Bangkok.
Prisoners at a nearby jail were taught new agricultural techniques while in detention, and police chief Col. Narongchit Maneechote put his latest batch of recruits from the police academy to work digging out weeds and planting saplings on the police station’s grounds.
“When people used to see police officers with some extra money, they thought we were getting it from protection rackets for illegal lotteries,” Col. Narongchit said. “Now they know it comes from farming.”
Such self-help programs are small steps. “But it’s getting closer to the answer,” says Mr. Therdsak of Rangsit University. “There is still a lot to do. But people need to learn to upgrade their skills if they are going to support themselves into old age.”
In Hua Ngom, a village of about 6,000 in Chiang Rai province in Thailand’s far north, community leader Winai Kurengchai began a special learning program for older residents called “Be Proud to Be Old” after noticing a series of suicides among older residents.
“At first we thought it was something to do with the crisis,” says Mr. Winai, referring to the Asian financial problems in the late 1990s that threw Thailand’s economy into recession. Eventually, he says, he realized the victims were mostly elderly people left alone when their children moved away to cities and began having smaller families.
One 73-year-old woman, he recalls, flung herself down a water well. “She wasn’t poor,” he says. “She was wearing several gold necklaces. But deep down she was overcome by the pressure of living on her own.”
There have been no suicides in recent months, he says, as older residents learn about home farming and study languages such as English. But birthrates remain stubbornly low. Last year, only three children were born in Hua Ngom.


About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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