On April 4, 2019, GWIKS hosted its very first Korea Policy Forum with Troy Stangarone, Senior Director of Congressional Affairs and Trade at Korea Economic Institute of America (KEI) on “The Implications of Demographic Decline for South Korean National Security”. Moderated by Professor Celeste Arrington, Korea Foundation Assistant Professor of Political Science and International Affairs at George Washington University, Mr. Stangarone began his lecture by introducing two theories on demographics and national security: geriatric peace and increase in instability. He explained that, according to the Geriatric Peace theory, as the population ages, economic growth will slow down, with the decline in the population in the workforce and more capital spent on welfare. This is problematic in that the government has less to spend on defence. He also pointed out that not all countries will age at the same rate, leading to weakening of security in countries with lower birth rates, particularly South Korea. According to the Increasing Instability theory, countries with younger population will likely transition to neo-authoritarianism (for example, China or Russia), but will not transition to high-income states (for example South Korea and Taiwan), causing international instability. In countries with multi-ethnicity, some ethnicities will rise while others decline, based on their rate of aging population.
Mr. Stangarone then presented a graph of prospects on South Korean demographic trend. The graph displayed three possible trends in South Korean population from 2015 to 2040. As he pointed out that in 2018, South Korea’s total fertility rate had reached below 1 at 0.98, predicted that the potential trend in South Korean population will be somewhere between medium and low trends predicted by the UN. He revealed concern that if South Korea’s population trend moves closer to the low variant, by 2040, 16.5 million people leaving the workforce, decreasing South Korea’s labor pool by half. When added with South Korea’s relatively long life expectancy, there will be less people in the workforce to support the aged population, while more aged population will be in need of support. This is critical in that it will decline economic growth and increase health care costs. He then mentioned that South Korea has the highest level of aged poverty in OECD at 45.7%, along with high rate of old age suicide. South Korea’s declining birth rate can result in social and economic problems in more ways than one.
As far as security, such trend will lead to less capital to spend on national defense and decline in the young population to serve in the military. With South Korea currently confronting North Korea, the size of South Korean military is particularly crucial. Mr. Strangarone then listed some of the Moon administration’s initiatives to resolve the issue: downsizing the military, reducing mandatory service time, shifting reliance from manpower to artificial intelligence, replacing some jobs formerly held by the military with civilians, and budget increase of 7.5% for five years. As he continued to list some of other potential options, he clarified that these suggested solutions are not silver bullets to resolve the problem. The potential options he mentioned includes: tax, healthcare, and pension reforms, labor market reform and raising the retirement age, increased female economic participation, defence reforms, artificial intelligence, and immigration. Among these options, he found that defence reforms to be the most promising. By eliminating the requirement of eight years in reserves, semi-professionalizing the reserves and providing greater income source for the core group of dedicated professionals, the efficiency of the military will increase.