Japan and China courting the Philippines

Here's a news report from forbes last January 14, 2017. I think both will win. Both will have greater access to the PH's 

(a) big, young population as consumers or needed migrant labor, 

(b) SE Asia's fastest growing big economy since about 2009, 

(c) nice tropical tourism destination for their people,

(d) both have quarrel over a small island that's obviously closer to Japan than China, so both have issues over international rule of law, 

(e) both have ageing population, so both would need an infusion of young migrant labor from the PH, today or tomorrow.

While many support the state-sponsored population control (aka RH law to prevent "unwanted pregnancies" that become "unwanted babies" that become "unwanted workers" and entrepreneurs someday?), the Japs, Europeans, etc. envy the PH's big, young population. https://www.bloomberg.com/.../japan-turns-to-asia-s...

(f) Both have huge, big governments that are heavily indebted (220%+ of GDP for Japan, 40%+ for China but if the debt of their state corporations and banks, local governments, private corporations are included, about 240% of GDP). So both will need the money of middle class and rich Filipino tourists who can afford to travel to more countries around the world.

Tax Cut 27, The Furusato tax in Japan as possible model in citizen empowerment

A Tokyo-based Filipino friend, Jules, shared this article from Tokyo Weekender:

The program was launched in 2008 as a way for a person to make a charitable donation to a municipality or prefecture of their choice—whether or not it was their hometown. Donors can even specify the purpose for which they want the money to be used: educational projects and helping the elderly are two examples. Beyond the feel-good aspect, though, there are two benefits that make donating all the sweeter.

The first of these is that donations are tax deductible: depending on how much you donate and your household’s income, you can claim back almost the entire donation. In general, the more tax you pay, the more you can claim back under donations to the Furusato Nozei program.

The other benefit… The municipalities and prefectures often send back “thank you” gifts to donors, typically in the form of local products and specialties. A tax break and return goodies into the bargain—what’s not to like?

Jules added his experience, posted in fb last week:

Power over the purse. Taxpayers in Japan decide how their taxes are spent.

Yes that is right. Power over the purse, an authority granted only to politicians, members of Congress( House of Representatives) and local councils( I think) of municipalities, cities and provincial government.

Furusato Tax, as it is popular known in Japan, grants the same power to tax payers. Essentially, it let tax payers decide how their taxes will be spent. At the moment, it only covers a small percentage of ones income tax and limited only to allocating the tax to local government units and or villages.

It is done on an annual basis too. You can decided to donate to a different local government unit next time around. The main purpose of the program is to support development in the countrysides by channeling taxes away from big cities like Tokyo. However, the program also make the intended beneficiaries ( local government units) compete and be more accountable. They would need to 'sell' to tax payers the projects they intend to fund and explain how the money was spent.

As an added appeal to tax payers, local government units who receive your taxes, lavish the donor with 'tokens' of gratitude from as simple as a 'thank you' note to as enticing as a 2 kilograms of sirloin steak, a paraglading tour, and many more.

Just this year, our family was gifted with a 700.00$ voucher that can be use on any MontBelle strore( Japan's largest outdoor product company akin to NorthFace). Already, we've spent 200.00$ of that on a very nice and lightweight down sleeping bag. Tomorrow, we are travelling to a rural village next to the Japan Alps with a 2days/3nights paid for by the village that received our tax donation. Power over the purse.

Who says democracy is limited only to casting ones ballot?!

Good initiative indeed. But I think the best tax policy is zero income tax, governments to survive on their roughly dozen types of consumption-based taxes (VAT, excise tax, travel tax, property tax,...). Then people will have more money in their pockets and they can spend more, like buying more fruits and veggies from Cagayan Valley or Bicol, etc., or visiting those regions and provinces and spend money there. Those provinces and cities of course will be competing with each other to attract more tourists, local and foreign, knowing that people have more money in their pockets than before. A few countries have zero income tax policy -- Brunei, UAE, Monaco,... Some have flat 10%, flat 12%, tax.

The second best tax policy is this type. But I think the national central planners will hate this type of "power to the purse" by the taxpayers. Remember they are so bright, so intelligent, they have so many data, and they are backed by dozens of consultants with PhD, the foreign aid agencies, so they can't be wrong, right?

The third best tax policy perhaps is status quo but income tax will be as small as possible, like 5-10% flat rate.

Nonetheless, this "Furusato tax" would be one of the models in citizen empowerment. 

-------------

See also:

Tax Cut 24, Tax reform forum in Ateneo, March 26, 2016 

Tax Cut 25, Presentation at Ateneo Ignite's Tax Exchange, June 04, 2016 

Tax cut 26, Excise tax on petrol products should be reduced/abolished, not increased, September 12, 2016

Demography 25, Ageing societies, Japan's depopulation

Human population, whether rising or declining, should be left as individual and parental decision and responsibility, not government decision and responsibility. Should there be population explosion or population control/depopulation, it should not be government-sponsored.

Thus, in ageing societies, instead of government giving subsidies to households for having new babies, government can reduce income taxes, relax rigid labor laws, so that people will have more money for their kids, or they can hire a nanny to help them raise kids.

In countries where the growth of population is flat or declining, there are two solutions: have more robots, or have more migrants. Welfarism is an ideological enemy of free migration.

Here are some old news reports.

(1) "Germany's 82 million residents will dwindle to 74.7 million by 2050 and their average age will rise to nearly 50, assuming unchanged levels of migration, according to EU statistics agency Eurostat. Some projections are even more dire, putting the German population as low as 65 million by 2060.

At present, the age dependence rate is 27.5 on average in the 28-nation EU, but Germany and Italy are well above that level. The rate is projected to jump to 49.4 in 2050, when there will be only two people of working age for every retiree.

Most EU countries have raised their retirement age to 65 or beyond and are making citizens contribute longer for a full pension - but further increases lie ahead."

http://www.interaksyon.com/.../aging-europe-needs-the...

(2) "Globally, an estimated 44.4 million people suffer from dementia and the figure is projected to triple to 135.5 million in 2050 as the population ages, Alzheimer’s Disease International estimates. Nowhere is the problem more acute than inJapan, where an estimated 8 million people have dementia or show signs of developing it. By 2060, 40 percent of Japanese will be over 65, up from 24 percent today, according to National Institute of Population and Social Security Research.

When the national program, called Dementia Support Caravan, began in 2005, apartment managers were the first to join. They were dealing with tenants who complained about elderly neighbors banging the wrong doors, failing to sort bins, stealing newspapers and rubbing human waste on communal walls, said Hiroko Sugawara, who runs the program. Now demand is rising across corporate Japan." http://www.bloomberg.com/.../bank-tellers-serve-as...

(3) "Japan's birth rate hit a record low in 2014 at just 1,001,000 infants. When combined with 1.3 million deaths in the same year, that's a deepening population crisis. According to Japan's population institute, the overall population could dip to 107 million by 2040 — or 20 million lower than today.

At the same time, Japan's population is shrinking and graying, setting up a "demographic time bomb" that could radiate out globally through the country's Greece-level national debt and deep economic ties with China and the US." July 1, 2015.

http://www.businessinsider.com/half-of-japanese-people...

(4) "Despite an explosion in population greater than Malthus could have ever imagined, global living standards are higher than ever.

.. the precautionary principle, which this book rightly castigates. Based on a confusion between the sensible precept “be careful” and the nonsensical proposition that you can’t be too careful, it insists on taking the worst-case scenario as the outcome that should dictate policy. On that basis, one would never get in a car. And the massive technological advances that we have seen since the Industrial Revolution, and the reduction in global poverty that has followed, would never have occurred.

Another factor is the quasi-religious appeal of these prophecies, which may help to explain the papal encyclical to which I referred at the start. Even more recently, the Church of England at its latest synod called for all vicars to be trained in “eco-theology” as well as the Bible. It also called for churchgoers to do without lunch on the first day of each month, as a fast against climate change. Perhaps this should not be mocked: It might help combat obesity, which is probably more damaging than climate change.

“The End of Doom” is not quite in the same class as Matt Ridley’s classic, “The Rational Optimist,” but it is a good book and deserves to be widely read." July 27, 2015.

http://www.wsj.com/articles/apocalypse-later-1438039375...

(5) "Only 1.001 million babies were born in Japan in 2014 — a record low — and 1.269 million people died.

That's an overall loss of 268,000 people, and a signal of a population crisis in one of the world's most developed and debt-ridden economies."

http://www.techinsider.io/herbivore-men-in-japan-are-not... 

"TCOR and later UNEP’s Agenda 21 adopted and expanded the Malthusian idea of overpopulation to all resources making it the central tenet of all their politics and policies. The IPCC was set up to assign the blame of global warming and latterly climate change on human produced CO2 from an industrialized expanding population. They both developed from false assumptions, used manipulated data and science, which they combined into computer models whose projections were, not surprisingly, wrong. The result is the fallacy of global warming due to human CO2 is a subset built on the fallacy of overpopulation."

http://wattsupwiththat.com/.../overpopulation-the.../

Japan depopulating, something like 100,000 to nearly 300,000 people a year. Japan will be forced by circumstances to have more migrant workers, and/or more robots. The same thing will happen to China. So the China commie government should be more realistic now -- it should not alienate big population countries like India, Pakistan, Bangladesh, Philippines and Vietnam. Soon, these 5 countries will supply many of its manpower requirements. Or it may accept more people from Nigeria, Ethiopia, other African countries.

Migrant workers will eventually flood in, Japan will have no choice. Between ageing Japanese with dementia who cannot find their way home, would walk and get lost in the cold and die, and get foreign workers to take care of their ageing parents and grandparents, the latter should be preferable to more Japanese.

Liberalize travel and migration, relax those work visa restrictions. We should be moving towards a globalize and borderless world. That is what the Maddison data show -- as human population expands, as they move from one country/continent to another, to improve their lives and the new communities they adopted, per capita income rises. Visa restrictions and border sealing were 1900s thinking of governments that persist until now. But further human modernization, FTAs among countries, and demographic realities will force those governments to slowly tear down those strict border restrictions.

------------

See also:
Demography 21: China Overtaking the US' GDP Size in 2014?, May 02, 2014 
Demography 22: Japan's Depopulation and Migration Policy, May 11, 2014  
Demography 23: The UN, Depopulation and Climate, May 03, 2015 
Demography 24, The Maddison Project data, August 13, 2015

Demography 22: Japan's Depopulation and Migration Policy

A good article here from WSJ last Wednesday. The author is arguing for a more liberal or freer immigration policy by the Japanese government because of the huge manpower requirements by the ageing population. Something like 650,000 new immigrants a year.

In Japan, Taiwan, S. Korea, other developed economies in Asia, Europe and N. America, flat or declining population is a problem while in developing economies like the Philippines, India and Indonesia, their rising population is considered by certain sectors as a big problem, big liability, instead of looking at it as a big asset. While Japan can invent more robots to run its many manufacturing plants, robots cannot smile and give "human touch" when replacing adult diapers or guiding old people to walk and stroll in a park.

Government-sponsored population control in developing countries is wrong. And government strict immigration policies that restrict if not prevent private enterprises and households to get the necessary immigrant labor they want is also wrong. If the host governments are wary about possible crimes or health opportunism by the migrant workers, then government should simply do their basic function, to enforce the rule of law. And let the local employers, companies or households, provide private health insurance for their migrant workers.

Below is the article. Enjoy.
--------------

Trade in a Land Without Chhldren

Discussions about Japan's economy generally focus on GDP growth, consumer confidence, business sentiment, unemployment, wages, investment and the like. Those are all useful markers, but if you want a clue about the country's long-term prospects, a far more significant statistic was released recently: The number of children in Japan has just declined for the 33rd straight year, and is now at its lowest level since data collection began in 1950.

Young people between birth and 15 years old constitute only 12.8% of Japan's population; in the U.S. it's closer to 20%. Those over age 65 make up more than 25% of the population, a record high. The overall population has declined for the past decade.

The litany of baleful consequences of population decline is familiar. Fewer children today means fewer workers tomorrow to support the non-working young and old. Fewer workers also means less growth, especially in an already advanced economy like Japan.

Neither of the two most commonly cited solutions to this problem is satisfactory. Increasing the proportion of the working-age population that is actually working, especially by boosting the shockingly low female labor-force participation rate, will help in the near term. So will raising the retirement age so that Japan's wondrously healthy elderly stay in the labor force longer.

Elderly Japanese women stand in front of Hina dolls displayed on the steps at a Shinto shrine in Katsuura city, Chiba prefecture, Japan. European Pressphoto Agency.

But there's a limit to the long-term efficacy of either measure. Both women and the elderly die the same way today's cohort of working-age men eventually will. A consequence of having too few babies is that even if the labor participation rate reaches an unrealistic 100% in the future, the number of Japanese who are working will still eventually fall to below the number who are working today.

Immigration is the obvious solution, and also the one that seems to be least politically viable. Only in recent months has Prime Minister Shinzo Abe's government dared to leak word to the press that a plan to allow up to 200,000 immigrants per year may be in the works. This would more or less stem depopulation by mid-century—if Japanese can also be prevailed on to increase their birth rate to a blistering 2.07 children per woman from the current 1.39. Good luck with that.

Otherwise, Japan needs to let in around 650,000 immigrants per year to achieve the same population outcome. Good luck with that, too. One feature of Japan's population debate is how blasé the Japanese themselves sound about it. Reporters can reliably find (elderly) interview subjects to aver that life won't really be so bad. It will be less crowded, and per-capita incomes will be stable. And allowing foreigners in, the subtext goes, will make the country's famously orderly existence far too chaotic.