Japan is running out of babies. If this trend continues, soon there will only be two workers available to support each pensioner in Japan, writes David McNeill

Battered by recession, weighed down by crushing public debt and skippered by a lumbering gerontocracy that seems powerless to stop the country's slow decline, it's tough times for leaky old Japan Inc. Now the country faces potentially its most serious problem yet - it is quickly running out of babies.

After years of steadily declining birthrates, Japanese women now have an average of about 1.3 children in a lifetime, fewer than their counterparts in Ireland (1.9) or Britain (1.6), and well below the level needed to maintain Japan's population of 127 million.

If the trend continues, the population will plummet to just over 100 million by 2050, shrinking the country's labor pool by more than a third and dragging down the country's national wealth.

Government bureaucrats are nervously eyeing the other end of the population pyramid, where life expectancy rates continue to stretch ahead of the rest of the world, meaning the contracting workforce will be asked to support a growing army of pensioners. By 2005, there will be just two younger workers supporting each retired person, down from 11 in 1960, claims veteran Japan watcher Alex Kerr.

"This is a terribly serious situation," warns Ritsuko Wada, an economist at Nomura Research Institute. "Working-age people pay for the elderly. Many people think the pension they pay today is saved by the government and comes back to them when they retire, but actually it's spent right away, so my children will have to pay for me. If the number of elderly people keeps rising, the system will collapse."

The solutions to the problem seem obvious enough; either somehow persuade women to have more babies or throw the country open to millions of immigrants, mainly from China and the rest of Asia.

Both approaches promise to be a hard sell.

For one thing, Japanese women are working longer, having babies later, and enjoying freedoms their mothers never dreamt of. The idea of giving all this up for motherhood in a cramped flat with a workaholic husband, almost two million of whom work over 60 hours a week, doesn't hold much appeal, even when the sting of child-rearing comes with the salve of higher family allowances.

"Many women rightly think it is a very lonely road having a baby,"says Yuko Kawanishi, a sociologist specialising in family issues at Tokyo Gakugei University. "Until recently, we had a wider family and community that helped rear children. Now we have life in small isolated apartments and a husband who is not there to give support. It's too much hard work and too lonely."

Despite the looming birthrate crisis, working mums get little support. State day-care centres are scarce, although the government has announced plans this year to build 50,000 more. Women struggling to climb up the greasy corporate ladder find maternity leave spells career suicide in a country where, according to Kawanishi, less than 4 per cent of senior managerial posts are held by females. It is for this reason, observers say, that many women ignore the option of paid maternity leave, available since 1992.

"The working environment means many women are reluctant to have babies because they think their boss and male colleagues won't accept it," says Wada. "In their 30s, women start really enjoying their job and taking on more responsibility, so if they then turn around and ask for a year off in their 30s, they think the boss will say "that's women for you".

Those intimidated by the prospect of millions of working mothers are turning their attention instead to the massive pool of cheap labour on Japan's doorstep to alleviate the fertility crisis. The chairman of Japan's top business federation, Hiroshi Okuda, said last November his organisation was in favour of as many as 6.1 million foreign workers in the near future.

But is Japan really ready for mass US-style immigration? With only about 1 per cent of its people classed as "foreign", Japan remains unique, and uniquely homogenous, among the advanced industrial countries, all of which have large immigrant populations.

FOR generations, Japanese bureaucrats have made a virtue of the country's isolation and social harmony, making life tough for the small numbers of immigrants who crept under the bar. Until recently, even the Japanese-born children of Chinese and Korean labourers brought to the country as slave labourers in the second World War had to register and fingerprint as "aliens".

"The nationalistic impulse is in conflict right now with the hard-headed commercial impulse," says Prof Tom Gill, a sociologist at the University of Tokyo who has done research on immigrants in Japan. "Despite the recession, there is a lot of demand for unskilled labour. And universities are worried stiff about the falling birthrate, so the obvious place to look is China and Asia for workers and students. But there hasn't been a national debate at all, so there is this large category of illegal but tolerated immigration."

The result of the failure to confront the issue is some odd compromises: young Chinese who pay huge fees to universities where they will never study, disappearing instead into the illegal economy; thousands of foreigners on "technical trainee" visas who are helping to prop up the small-business sector; and a quarter of a million people who live in permanent fear of being deported.

But Japan's tortuous attitude to immigration is best seen in the recent influx of South Americans, many of whom are the children of Japanese who themselves immigrated after the second World War.

"Allowing thousands of Brazilians, Peruvians and Bolivians to come in after 1990 was an opening of the door, but the authorities still stuck to what was literally a blood-relation approach," says Prof Gill. "The more Japanese you were, the more you could stay, and the more you could be trusted. If you could prove you had two Japanese parents, you got a longer working visa than if you had one, if you had a parent, you could stay longer than if you had a Japanese grandparent, and so on."

Whatever happens, the looming birth rate crisis will have to be tackled properly - and soon, as even the country's most conservative leaders now realise. Tokyo's notorious governor, Shintaro Ishihara, who has built a political career in part on the racist baiting of Chinese and Koreans, recently told a Japanese magazine that he favoured "controlled, legal immigration". As a sign that things might be changing, it would be hard to beat.