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Economic Daily News: Defuse demographic bombs

2010/09/26 15:10:22

The administration has two financial bombs to defuse in the faceof an increasingly graying society and a dwindling birth rate.

The bomb of ever-rising expenditure for health and pensionpayments as a result of the aged and aging populations and that ofshrinking revenues as a result of a declining birth rate have begunto eat away at the government's finances.

According to the latest government report on the country'srevenue and expenditure, the government will face debts totalingNT$13.3 trillion (US$415.63 billion) over the next 30 years. Of thatamount, NT$13.1 trillion, or 98 percent, will be for labor pensionand public workers' retirement payments -- both of which are linkedto the aging population.

The labor pension program, which covers 9 million seniorcitizens, began to show substantial deficit in 2009, which puts everynewborn in Taiwan in debt at birth.

The national labor pension program is forecast to go bankrupt in18 years, due to the soaring number of pensioners and dwindlingnumber of younger people who will be the major earners.

Based on the United Nations definition, Taiwan officially becamea "graying" society in 1993 when its 65 and over population reached 7percent of the total -- a figure that has now risen to well over 11percent.

Meanwhile, at the other end of the demographic scale, Taiwan'sbirth rate has been declining over the last few decades and haddropped to an average of 1.03 births per woman last year from 3.09recorded in 1976. Taiwan's birth rate, among the lowest in the world,is too low for sustainable development of the society.(Editorial abstract -- Sept. 26, 2010)

(By Deborah Kuo)
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