Ageing, shrinking population not burden but incentive: Abe

NEW YORK: Prime Minister Shinzo Abe said Japan’s ageing, shrinking population was not a burden for the world’s third largest economy, but an incentive to boost productivity through innovations like robots, wireless sensors, and Artificial Intelligence.

Abe’s comments on Wednesday come just days after official data showed that Japanese aged 65 and older totalled 34.6 million, or 27.3 percent of the population - a record and the highest among advanced nations.

"I have absolutely no worries about Japan’s demography," Abe said in a prepared speech at a Reuters Newsmaker event, noting that nominal gross domestic product had grown despite losing 3 million working-age people over the last three years. "Japan may be ageing. Japan may be losing its population.

But, these are incentives for us," he said.

"Why? Because we will continue to be motivated to grow our productivity," Abe added, citing robots, wireless sensors, and Artificial Intelligence as among the tools to do so.

"So, Japan’s demography, paradoxically, is not an onus, but a bonus," he said.

Abe has said he wants to halt the slide in Japan’s population at 100 million people by 2060, about one-fifth below the current level.

The government also aims to raise the fertility rate to 1.8 births per woman from 1.4 - still below the 2.1 needed to prevent a population from shrinking.

Abe has also focussed on mobilising women and the elderly to compensate for a shrinking workforce rather than tackle head-on the politically touchy topic of immigration, although some changes are being considered on that front.

Abe, who returned to office in December 2012 for a rare second term pledging to reboot the economy with his "Abenomics" mix of ultra-easy monetary policy, fiscal spending and reforms, reiterated that the economy remained his top priority.

Critics worry Abe will instead devote his main attention to trying to revise Japan’s post-war pacifist constitution, even as Abenomics seems to be running out of steam.

In a closely watched move, the Bank of Japan earlier on Wednesday added a long-term interest rate target to its massive asset-buying programme, overhauling its policy framework and re-committing to reaching its 2 percent inflation target as quickly as possible.

The prime minister also said his government would seek quick approval by parliament of the Trans-Pacific Partnership (TPP) pact and urged the United States to do the same.