Seoul (AsiaNews) – With the dramatically falling birth rate in South Korea, the country's population is projected to diminish by two-thirds in the next century,  dropping to 16 million from 48 million,  and creating a national economic and labor-shortage disaster. To head off the crisis, the government's National Strategy for a Low-Birth Rate and Ageing Society has proposed offering cash incentives, and child-care subsidies to parents. Parents of newborn children would be given a 200,000 won (circa 135 Euro) grant and families with three or more children would be given priority when bidding for a new apartment.

According to the Korea Institute for Health and Social Affairs, South Korea has the lowest birth rate in the world. The average woman has 1.17 children, significantly below the 2.3 rate needed to keep the population at its current level. This compares to Japan's 1.32 figure , and their well-documented problem with an old population.

Cultural trends have played a role in the declining number of babies born. Forty years ago, South Korean women married young and had, on average, 6 children. Now many women are marrying later, or choosing to remain single, while those who do have a child prefer to spend all their resources on one.

"We need to construct the appropriate social and institutional environment to raise the fertility rate in the country," said Kim Seuong-Kwon, director of social policy research at the Korea Institute for Health and Social Affairs. "For example, cash payments on the birth of a child and regular cash payments for every second and subsequent birth up to the age of 5, and an expansion of child care facilities." 

Tackling the population shortage from both ends, Seoul has proposed raising the retirement age to 60 by the year 2008, and then further raising it to 65 by 2033. On average, South Korean workers retire at 57. Under the new proposals, the city would remove barriers facing older workers seeking employment, and toughen laws against discrimination of older workers.

South Korea is Asia's fourth largest economy

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