LONDON Pensions in danger Britain is the latest Western country to wake up to the threats that longer lifespans and an aging population pose to its pension system. As in most of the West, however, there is an almost total reluctance to discuss one of the key ingredients of the problem: the low birthrate. In contrast, there is no such taboo in East Asian countries, which are facing similar demographic shocks. This could well be another case where Asia is learning from Western experience. Britain's problem is fairly typical, though far from being the worst in Europe. According to an exhaustive, government-commissioned report published this month, there is a hole of $100 billion in provisions required to meet current levels of pension commitments, assuming existing levels of savings, current retirement ages and predicted advances in longevity. Its prescription is an unremarkable mix of advancing the retirement age, eventually to 70, increasing taxes to pay more pensions and using incentives or compulsion to increase the rate of private savings. The eventual mix will be a political decision, so the report does not make any specific suggestions. But it does assume that these issues can and must be urgently addressed by society and government. So why, it must be asked, does the report just accept low fertility as a given and not consider birthrates as a factor susceptible to policy-making in the interests of society? Should we not consider why the fertility rate in Britain is just 1.7, compared with the 2.1 needed to ensure a naturally stable population, considering the consequences of a continual aging process and massive population shrinkage? Should we not consider the merits of policies that might reverse the trend? Should we not consider major rewards for those who invest in a new generation and produce the human factors of production necessary to ensure that any pensions are paid? One can hear the outrage at the very suggestion that Western governments should try to influence free choice in parenthood. But governments have been doing so for years. It is implicitly racist for self-styled liberals to object to pro-natal policies now needed in rich countries while continuing to advocate policies in poor African and Asian countries aimed at raising living standards by lowering birthrates. Population policies do not in themselves strike at free choice. Only China has made a habit of using force to reduce births through a state-imposed one-child policy. Elsewhere, people have responded to family planning education and availability. What is now needed in countries with very low birthrates is to help families and individuals choose the numbers of their children by presenting them with the realistic economic consequences of those choices. In turn, those will be set by tax incentives and pension policies determined democratically and in the long-term interests of society. High birthrates in the developing world have been associated with the need to provide social security for the old. Likewise today, very low birthrates are partly a consequence of the divorce of social security from parenthood. Extended family systems cannot be recreated in urban nuclear family societies. But that does not mean totally severing the link between parenthood and provision of security in old age. It means using tax and benefit systems to replicate its economic effect. Asian countries such as Singapore, Thailand and South Korea were among the most successful in the 1960s and 1970s in promoting family planning to reduce birthrates. Resources generated by a smaller population of dependent youth were shifted into raising living standards, with dramatic results. So it is not surprising that these societies are beginning to look at preventing the erosion of living standards when the number of old dependents absorbs so much income. Birth rates in South Korea are at about the European level, and in Singapore and Hong Kong they are even lower. Japan is already suffering the consequences of its rapid post-1945 demographic transition. All these countries are only beginning to grope for solutions. But at least the topic is actively being discussed - and not just because of hostility to migration as a solution. Europe talks about immigration, but the levels needed to offset low birthrates would be far in excess of anything politically and socially acceptable. Europe also talks about encouraging people to save more, but any big increase in savings in economies with declining populations would be self-defeating, causing recession and lowering returns on investment. Unless it can face up to and reverse its neglect of parenting, Europe's economic future is grim, regardless of savings levels or pension systems.