The future ain't what it used be: how world will look in 2020
WHAT will our world look like in 2020? Crystal ball gazing can be a dangerous thing to do, not least because some predictions almost inevitably end up being completely wrong and leave those making them looking foolish. But imagining the future is a useful exercise in understanding the bigger picture and sifting the important from the unimportant.
The best, and possibly only real guide to what the future might hold is trend analysis: first, identify the most significant current trends; and then make a judgement on whether each one will persist into the future.
Here are some of the important and/or enduring trends that will shape the world to decade's end and beyond.
The global economy increasingly reflects population
Since humans populated every inhabitable corner of the world millennia ago, East and South Asia have always been the most densely populated parts of the planet. But unlike today, lots of people living in close proximity in ancient times did not generate much additional wealth. From what economic historians know, living standards didn't differ very much across the world.
As a result, the biggest economies for almost all of human history have been those with the biggest populations. China and India were, therefore, the world's biggest economies for aeons. Europe, by contrast, was relatively unimportant, while the vast emptiness of North America was a tiny and isolated economy.
Then came the industrial revolution, and everything changed. As it spread across Europe and the US, output per head soared and the West pulled away from the rest. But from the middle of the 20th Century the West's dominance began to wane, very slowly at first and more rapidly in recent decades. That has been caused by both an acceleration of growth in the developed world and a simultaneous slowdown in rich countries.
There is very little reason to believe that either of these well-established trends will change much over the rest of the decade. The result is that by 2020 inequality among the nations of the world will have declined further, Europe and America will be less significant economically and Asia will be closer to its long-run position as the dominant part of the global economy.
The decline of war between states
At a time when Russian troops are massed on the Ukrainian border, it might seem strange to be optimistic about world peace, but one of the most significant trends (if little remarked upon outside scholarly circles) since the end of the Second World War has been decline in conflicts between states.
The reasons put forward to explain the trend are many and diverse including: the rising costs of war and the declining gains, fewer border disputes, the discrediting of communist and fascist ideologies, "civilianisation" of military power, a declining willingness of populations to be treated as cannon fodder, and – most broadly – a capacity to learn from the mistakes of the past.
While war remains possible while the likes of Russia and Iran aggressively increase their regional influence, and historical legacies continue to cause friction – as they do very dangerously between China and Japan – the cost/benefit calculus of going to war should continue to deter countries from resorting to violence. The remainder of the decade will be mostly peaceful.
Global governance in multipolar world
Because military conflict has been resorted to less frequently does not mean that brotherly co-operation has broken out across the world.
If anything, as power is becoming more diffuse and as the clout of many big developing countries increases, arriving at decisions that cut across national borders has become more difficult.
And as more issues are tending to have cross-border dimensions, the world needs more global governance on a widening range of issues and more effective global governance where it exists.
There has been some progress in achieving this. The emergence of the Group of 20, or G20, has been an important institutional innovation at global level, and longer-established international institutions have helped prevent bad things happening – without the World Trade Organisation, for instance, protectionism might easily have increased following the Great Recession.
But from life-and-death security issues, such as the civil war in Syria, to bean-counting issues like deciding on how multinational companies' taxes are treated, co-ordinated international responses remain weak.
More than any other issue on which the difficulties of the co-ordinating responses to a challenge that affects everyone is climate change. The next major international conference on the issue will take place in Paris at the end of the next year.
Since the issue emerged as a real threat in the 1980s, various agreements to tackle it have been largely ineffective. It is hard to see that trend change. By 2020, the risks of runaway climate change are likely to have risen.
G2: the surprisingly stable US-China relationship
The most important single relationship in the world today is between the two biggest national economies – the US and China. By some measures China will overtake the US as the world's largest national economy this year, and it is catching up on other measures of power too.
Despite some predictions in the past that the relationship would become more like America's with the Soviet Union, US-China relations have been remarkably good – the rising Asian power has generally been restrained in how it uses its growing clout and the US has been accepting of China's rise and has not hindered it. The capacity of both sides to avoid friction augurs well for the equalisation of power between the established and emerging superpowers.
The polarisation of US politics
Since the 1980s, political scientists' measures of polarisation in US politics have been showing a growing divide. Observers attribute this to many factors – demographic, social, economic and how the media functions – but regardless of the cause (on which there is little consensus), it is making the US less effective domestically and eroding its capacity to act in the world.
If a divisive figure – a Clinton or a Bush – were to win the White House in 2016, polarisation would likely become more extreme.
With signs of the US becoming more isolationist as a result of its politics and because its own energy revolution (which could end its dependency on imports), the relative decline of the US is more likely than not to be hastened by the country becoming more inward looking.
The European question
Predicting where Europe will be by 2020 is particularly difficult because of the profound weakness in some parts of its economy and the very unusual nature of its politics.
The EU has no historical precedent and it has suffered its first genuinely existential crisis with the sovereign debt debacle of recent years. The roots of the crisis have only partially been addressed, divisions are still deep, and chronic economic underperformance threatens to cause another acute phase of crisis – further deepening divisions and triggering another downward cycle.
It is possible that the incipient recovery will prove durable enough to allow Europe – and the eurozone – to grow out of its problems without rupture, but that is far from assured (Italy is one country to watch out for the next few years, given its huge size, levels of indebtedness, political failings and two decades of economic stagnation).
Of the world's main regions, we are unfortunate to live in the one which faces the highest risk of being in a considerably worse place – politically, socially and economically – than anywhere else by 2020.
- Twitter @danobrien20
Sunday Indo Business