TOKYO — The world's richest countries are graying so fast that the combination of fewer workers, lower consumption and the burden on health care may doom many of them to a permanent recession, an expert said Monday.
Paul Hewitt, director of the Washington-based Center for Strategic and International Studies' global aging initiative, said global aging was among the most important problems the world would face in the first half of the 21st century.
"Much of the industrialized world will find itself in permanent recession, what we call aging recession," he told reporters at the start of the CSIS' international conference on the problem of graying societies.
The three-day conference is co-chaired by former U.S. Vice President Walter Mondale, former Japanese Prime Minister Ryutaro Hashimoto and the former president of Germany's central bank, the Bundesbank, Karl Otto Pohl.
Hewitt painted a harrowing picture of the global economy's future as birthrates plummet simultaneously in Europe, Japan — the nation with the world's fastest aging society — and some pockets of the developing world, like China.
Citing Organization for Economic Cooperation and Development figures, Hewitt said economic growth in the industrialized world will be paralyzed by 2010 unless nations radically rethink their labor, tax and social policies.
"The future is going to be essentially 60-year-olds taking care of 80-year-olds," Hewitt said. "We're going to have to redefine what it means to be old."
Maria Cattaui, secretary-general of the International Chamber of Commerce, said it may already be too late to create the legislation necessary to avoid the worst consequences of global graying.
Cattaui said there are growing fears that tax breaks and other incentives for couples to have children are not enough to tackle the problem.
Hewitt said that to grasp the economic effects of the problem, one need only to look at Japan, which is stuck in a decadelong economic slump that shows no sign of easing.
He said that the combination of having the world's lowest birth rate and highest longevity rate condemns Japan to a vicious circle in which financial concerns prevent couples from having babies, which in turn shrinks the labor force and creates fewer consumers.
"Japan is ground zero" in the global aging dilemma, he said. "Japan could be our first country in an aging recession."