It's become an annual ritual. Every year about this time, when the government releases the latest demographic figures, the nation goes into a collective funk over its declining population.In the most recent report, the Ministry of Health and Welfare reported that the number of Japanese births fell further behind the number of deaths. The number of births, just over 1 million, was offset by 1.27 million deaths.Extrapolating these figures into future decades indicates that, unchecked, the country's current 127 million population, will drop by a third to around 100 million by 2060, falling by two-thirds in 2110.The declining population is a direct result of the fertility rate, now at 1.4 percent, that is far below the 2.1 percent that is needed simply to replace the existing population.Japan first fell below the replacement rate as far back as 1974 but the cross-over year, when deaths began to exceed births, was not until 2005. Every year since, newspaper headlines have written: "Japan's Population Suffers Biggest Fall in History."The country is seen as a kind of harbinger of what could happen to other nations with low fertility rates. While many other countries in Asia and Western Europe have low fertility rates, and others in Eastern Europe have declining populations, Japan's decline is the most advanced.The consequences of falling population are already being felt throughout the country. The declining number of workers supporting older people on social security, for example, was the primary reason for the decision to increase in the national sales tax to 8 percent - with most proceeds going to support social security - that put Japan into recession.House building and automobile sales, a traditional indicator of a healthy economy, are also being increasingly impacted by aging. In many rural areas of Japan, the problem is not a need to build new houses but what to do with vacant homes. Meanwhile, automobile sales may begin to falter as increasing numbers of older people give up driving. People who know only Tokyo and a few other major cities might wonder what all the fuss is about. After all, there seem to be plenty of young people and, most importantly, children on the streets and in schools and playgrounds. Here the population decline has been minimal.But depopulation is unmistakable in rural or coastal centers, where the average age might be 60. In some small villages everyone is over 60.In these communities there are fewer young people to take care of the elderly or work the rice fields - the average age of farmers in Japan is more than 60 - and it is common to see abandoned houses and fallow fields due to the lack of people.The consequences and possible solutions to the birth crisis fall heavily on women. Last year, a new word entered the Japanese lexicon - matahara, short for "maternity harassment."Yet, women resist being hounded by middle-aged men into having children, especially if there is no guarantee they can re-enter the work force later on.Abe has a more subtle approach. Recognizing that many women want to have both children and a career, he has urged companies to liberalize their employment practices so more women can return to work.His "Abenomics" approach addresses two important issues. It better utilizes the human resources necessary to counter the effects of declining birth rates while at the same time giving women incentives to have more children."In the right environment women have children whether or not they are working," says Masako Mori, one of Abe's female ministers.Greater acceptance of immigration would also partially ameliorate the problem of a declining population, experts say, but any kind of serious increase would run into Japan's difficult cultural prejudices. Abe remains flatly opposed to opening the door for immigration any wider.Such prejudices, however, may begin to fade as the decline continues. In the end, many Japanese may prefer to give up some of their cherished racial homogeneity to import the workers they no longer are producing themselves.