Alternative Worlds 2030

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What the world will look like in 2030? One thing is certain: There will be a tectonic shift in global economic and military equations.

By 2030, no country — whether America, China or any other large country — will be a hegemonic power.  And, the world will see a reversal of the historic rise of the West since 1750 and the restoration of Asia’s weight in the global economy, but India might find itself to be a late bloomer.

The most plausible best-case scenario elevates China into the Big League, allowing the communist giant to dictate international affairs along with the United States and Europe. China’s enhanced status will also enable it to play umpire in South Asia.

“This is a world in which the specter of a spreading conflict in South Asia triggers efforts by the U.S., Europe, and China to intervene and impose a ceasefire,” predicts a new study by the U.S. National Intelligence Council.

China, America and Europe will work together on global peace and security. Each side will overrule its domestic constituencies to forge an international  partnership. Over time, trust will develop as China begins a process of political reform, bolstered by the increasing role it will be playing in the international system.

“In this scenario, all boats rise substantially. Emerging economies continue to grow faster, but gross domestic production growth in advanced economies also picks up. The global economy nearly doubles in real terms by 2030 to  $132 trillion in today’s dollars. The American Dream returns with per capita incomes rising $10,000 in ten years. Chinese per capita income also expands rapidly, ensuring that China avoids the middle-income trap.”

China, however, could be trapped in middle-income status, if it fails to transition to a more consumer-driven economy and move itself up the value-added industrial production chain. Many Latin American countries faced a similar situation in the 1980s and were unable to avoid the trap because of income inequality and their inability to restructure their economies.

China is expected to remain ahead of India, but the gap would narrow by 2030. India’s economic growth rate is likely to rise, while China’s will slow. In 2030 India could be the rising economic powerhouse that China is today. China’s current economic growth rate — 8 percent to 10 percent — will probably be a distant memory by 2030.

Tectonic Economic Shift

Overall, Asia will have surpassed North America and Europe combined in terms of global power, based upon gross domestic production, population size, military spending and technological investment. China alone will probably have the largest economy, surpassing that of the United States a few years before 2030.

“In a tectonic shift, the health of the global economy increasingly will be linked to how well the developing world does — more so than the traditional West,” according to the report, “Global Trends 2030: Alternative Worlds,” which is intended to give policymakers some food for thought.

In addition to China, India and Brazil, regional players such as Colombia, Indonesia, Nigeria, South Africa and Turkey will become especially important to the global economy. Meanwhile, the economies of Europe, Japan and Russia are likely to continue their slow relative declines.

The world’s economic prospects will increasingly depend on the fortunes of the East and South. The developing world already provides more than 50 percent of global economic growth and 40 percent of global investment. Its contribution to global  investment growth is more than 70 percent. China’s contribution is now one and a half times the size of the U.S. contribution.

China will contribute about one-third of global growth by 2025, far more than any other economy. Emerging market demand  for infrastructure, housing, consumer goods and new plants and equipment will raise global investment to  levels not seen in four decades.

China has averaged 10 percent real growth during the past three decades; by 2020 its economy will probably be expanding by only 5 percent. The slower growth will mean downward pressure on per capita income growth. China faces the prospect of being trapped in middle-income status, with its per capita income not continuing to increase to the level of the world’s advanced economies.

China’s working-age population will peak in 2016 and decline from 994 million to about 961 million in 2030. In contrast, India’s is unlikely to peak until about 2050. Also of significance, India is most likely continue to consolidate its power advantage relative to Pakistan. India’s economy is already nearly eight times as large as Pakistan’s; by 2030 that ratio could easily be more than 16-to-1.

India, however, may face many of the same problems and traps accompanying rapid growth as China: Large inequities between rural and urban sectors and within society; increasing constraints on resources such as water; and a need  for greater investment in science and technology to continue to move its economy up the value chain.

The changes in the economic arena will result in tectonic shifts in power structures at the international level. The current Western dominance of global structures, such as the U.N. Security Council, World Bank and IMF, probably will have been transformed by 2030 to new economic players. Many second-tier emerging powers will be making their mark — at least as emerging regional leaders.

War and Peace

There are divergent trends in interstate conflict. The risk of intrastate conflict will continue to decline in countries and regions with maturing age structures (median age above 25 years).  War prospects will drop in continental East Asia, where many countries are aging quickly. However, the risk will remain high during the next two decades in parts of the Middle East and South Asia:

“We believe the disincentives will remain strong against great power conflict: too much would be at stake. Nevertheless, we need to be cautious about the prospects for  further declines in the number and intensity of intrastate conflicts, and interstate conflict remains a possibility,” the authors said.

Insufficient natural resources — such as water and arable land — in many countries that will have 

disproportionate levels of young men increase the risks of intrastate conflict breaking out, particularly in Sub-Saharan African and South and East Asian countries, including China and India. Many of these countries — Afghanistan,  Bangladesh, Pakistan and Somalia — also have faltering governance institutions.

South Asia faces several internal and external  shocks during the next 20 years. Low growth, rising food prices and energy shortages will pose stiff challenges to Pakistan and Afghanistan. Afghanistan’s and Pakistan’s youth bulges are large. When these youth bulges are combined with a slow-growing economy, they portend increased  instability.

India will fare better, benefiting from higher growth. But it will still be challenged to find jobs for its large youth population. Inequality, poor infrastructure and education deficiencies are key weaknesses in India. Conflict could erupt and spread under numerous scenarios. Conflicting strategic goals, widespread distrust and the hedging strategies by all the parties will make it difficult for them to develop a strong regional security framework.

Future U.S. Role

How the U.S. international role will evolve during the next 20 years is a big uncertainty. Whether it will be able to work with new partners to reinvent the international wheel will dictate the future shape of  the global order. The relative decline of the United States and other Western nations vis-a-vis the rising nations is inevitable. The degree to which the United States will continue to dominate the world will vary widely.

The United States is likely to remain “first among equals” in the major league because of  its preeminence across many power dimensions. More important than just America’s economic might, its dominant role in international politics has derived from its preponderance in both hard and soft power. Nevertheless,with the rapid rise of other countries, the “unipolar moment” is over and Pax Americana — the era of American ascendancy in international politics that began in 1945 — is fast  winding down.

America’s position in the world will be determined by how successfully it can manage international crises — typically the role of great powers. Should Asia replicate Europe’s 19th- and early 20th-century past, the United  States will be called upon to be a balancer, ensuring regional stability. In contrast, the fall of the dollar as the global reserve currency and substitution by another or a basket of currencies would be one of the sharpest indications of a loss of U.S. global economic position, strongly undermining Washington’s political influence, too.

The replacement of the United States by another global power seems unlikely. No other power is likely to achieve the same panoply of power to push off America to the sideline. However, a collapse or sudden retreat of U.S. power is most likely to result in an extended period of global anarchy.

B. Z. Khasru is editor of The Capital Express in New York and author of “Myths and Facts, Bangladesh Liberation War, How India, U.S., China and the USSR Shaped the Outcome.”  His new book, “The Bangladesh Military Coup and the CIA Link,” is scheduled to be released by Rupa & Co. in New Delhi in July.

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