CaliToday (05/7/2025): On the brink of an unprecedented demographic crisis, the South Korean government has just announced a bold financial intervention plan worth nearly $65 billion. This massive budget package is expected to be a decisive "push" to tackle the nation's alarmingly low birth rate, a challenge that directly threatens its economic future and social stability.
An Alarming Reality: When the Birth Rate Hits Rock Bottom
For many consecutive years, South Korea has held the title of the country with the world's lowest birth rate. According to the most recent data, the total fertility rate (the average number of children a woman has in her lifetime) has fallen below 0.7, a figure far below the 2.1 required to maintain population stability.
The consequences of this trend are already apparent and growing more severe:
A Shrinking Workforce: The working-age population is rapidly declining, putting immense pressure on economic growth and the nation's competitiveness.
The Burden on Social Welfare: The number of elderly people is increasing while the number of young taxpayers is decreasing, threatening the sustainability of the pension and healthcare systems.
National Security Concerns: A shortage of young men eligible for mandatory military service is also a major concern for national security.
A Comprehensive Solutions Package: Where Will the Money Go?
The nearly $65 billion plan is not just a simple subsidy but a multi-pronged strategy targeting the root causes believed to be barriers to marriage and childbirth. The main components include:
1. Housing Support for Young Couples: Providing ultra-low-interest mortgages and prioritizing newly married couples and families with young children in applications for public housing. High real estate prices in major cities have long been a primary financial burden.
2. Expanding and Upgrading the Childcare System: Investing in the construction of more public daycare centers, subsidizing tuition for private institutions, and improving the quality of teachers and facilities. The goal is to reduce the financial and time burden on parents.
3. Promoting Parental Leave: Strengthening policies that allow both fathers and mothers to take leave to care for their children without jeopardizing their careers. The government will partially subsidize salaries and implement measures to encourage companies to facilitate leave for their employees, especially men.
4. Increasing Direct Financial Support: Expanding programs that provide monthly cash allowances for each child until they turn seven, aimed at directly sharing the costs of child-rearing.
Challenges and Expectations
This is not the first time South Korea has spent large sums to encourage childbirth. Over the past two decades, hundreds of billions of dollars have been invested with little success. Experts argue that the problem lies not only in finances but also in deeply ingrained socio-cultural factors such as intense work pressure, a culture of overtime, fierce educational competition, and gender inequality.
However, this latest package is considered the most comprehensive and largest in scale ever. It demonstrates strong political will from the government to confront the most urgent "national task."
The international community is now closely watching South Korea's $65 billion gamble. Will this massive effort finally be able to reverse the alarming demographic trend? The answer will not only determine the fate of South Korea but also serve as a valuable lesson for many other developed nations facing similar challenges.
Nguyen Anh.
