KEY POINTS:
If you think mobile phones already rule your life, consider NTT DoCoMo's latest offering: One that tells you to rush home and have sex.
Yes, Japan's biggest mobile-phone operator is going where presumably none has gone before: The bedroom. A service it is providing rings to tell would-be mothers when they are at the most fertile point in their monthly reproductive cycle and that it's time to procreate.
Lest you think it amounts to inappropriate or crass marketing, Japan is likely to see more such innovations.
The population last year shrank for the first time since World War II, a period when Japan lost more than two million people. Excluding the war years, the population has not fallen since Japan began compiling data in 1899. The birthrate in 2005 fell to a record 1.25 babies per woman, down from 1.29 in 2004.
The Government says a birthrate of 2.1 is needed to maintain today's population of 127 million.
The trend has far-reaching economic consequences. Demographics rarely fit easily into investment decisions, yet comments this year by Jim Rogers, who co-founded the Quantum Hedge Fund with George Soros in 1970, explain why investors should care. "If the present birthrate, which is the lowest in the major developed countries, continues, there will be no Japanese," Rogers said. "Who will pay the enormous debt?"
It's an important question that explains why Rogers said in January he wouldn't be increasing his Japanese stock holdings.
With fewer people, it's harder for Japan to pay a national debt that the OECD estimates at 170 per cent of annual gross domestic product.
It's difficult to imagine another nation in which a mobile-phone fertility service tracking ovulation trends would be offered. Surely, its mere existence would seem to underscore how much attention the birthrate is getting in the world's No 2 economy. Yet not where it matters most: The Government.
Yes, Japan is back. The economy is growing faster than 2 per cent, banks are sound, corporate balance sheets are stronger and companies are hiring again. And as Shinzo Abe, prime minister since September, is focusing on the reduction of public debt.
Strangely, the connection between debt and demographics is scarcely under consideration. Japan's problem is far more acute than just the estimated US$9 trillion ($13.45 billion) of public debt outstanding.
As the number of working people shrinks while the number dependent on welfare and social services grows as the population ages, Japan has a fiscal timebomb on its hands. Fewer people mean a smaller workforce and lower tax revenue, making it harder to reduce Japan's debt.
Japan has two options: Increased immigration or more babies.
It would be best if Japan did both, yet a cultural aversion to opening the floodgates to foreigners puts the onus on churning out more kids. It's easier said than done.
Persuading people to procreate is a tall task for governments, not to mention an awkward one. Singapore created a government-sponsored dating programme that has drummed up more ridicule than births. Australian Treasurer Peter Costello raised eyebrows in 2004 urging citizens to have "one for mum, one for dad and one for the country".
Governments have no business telling citizens to have babies. What they should do is create economic environments that help those who want more children to have them.
It's an especially touchy subject in Japan, where public officials want to avoid echoing wartime nationalist calls to increase the birthrate. Yet efforts have so far been too timid and unsuccessful to keep the population stable.
In late 2004, an official "white paper" concluded that if present trends continue, the population will be 100 million by 2050.
There's one hitch: It's not clear how much sex the Japanese are having. The most recent annual Durex survey - the 2005 study involved more than 317,000 people worldwide - found that the Japanese have the least-active sex lives.
Also, the paltry birthrate is a form of rebellion against discrimination in male-dominated Japan. Too few women rise to senior management positions and motherhood is most often a career-ending decision. And so, many women are delaying or avoiding pregnancy.
Bold government action is required. To his credit, Abe has been talking about empowering working women but he has been too vague on the issue to inspire much hope.
To boost the birthrate, Abe should work to change the mindset of corporate executives so more women can have a career and a family. He also should offer fresh thinking on investments and tax initiatives to make childcare more affordable. If not, Abe will have no more success than his predecessor, Junichiro Koizumi, in better utilising the female labour force and improving the fiscal outlook.
So far, the Government doesn't appear to grasp the urgency of all this. A wake-up call is needed like DoCoMo's new service.
- BLOOMBERG
