As the 21st century continues to unfold, we are seeing the convergence of three tectonic shifts: the rise of the middle-class in emerging or emerged economies all wanting to pursue the American Dream; deepening globalization with a linked fate in energy, climate and financial security; and the empowerment of the individual driven by new-age global connectivity. This convergence is offering new perspectives on global issues of climate change, sustainable development, limits to growth, food prices, the Jasmine Revolution reverberating throughout the Arab world and beyond, and the shifting sands of global geopolitics
A number of challenging scenarios are on the horizon :
(a) Ongoing breakneck industrialization in the emerging economies in the course of this decade or so will see problems of protectionism, climate change, rising commodity and food prices, as well as energy and geopolitical rivalry getting worse before they get better.
(b) Rising protectionism will further the impetus of regional trade blocks like ASEAN-plus-three (China, Japan, and Korea), the largest in the world by total population size. Energy security concerns are likely to strengthen regional cooperation organizations like the Shanghai Cooperation Organization. The SCO has a host of Central Asian countries as Members together with Iran, India, Pakistan, Mongolia (as Observers), Belarus and Sri Lanka (as Dialogue Partners) and Afghanistan (as part of a ‘Contract Group’). Most of these have a strong Islamic influence.
(c) Africa as a continent rich in agricultural and mineral resources will continue to be on the ascendant. The footprints of resource-hunger countries especially China will become even more apparent. More infrastructural and financial investments together with helping Africa governments to set up Special Economic Zones are set to boost African economies further. At the same time, China’s African paradigm continues to fuel questions and debate on whether economic growth or democracy should be the pre-requisite to development. (See Dead Aid by Dambisa Moyo, Penguin Books, 2009 and The Dragons’ Gift by Deborah Brautigam, Oxford University Press, 2009.)
(d) Petro-power and ‘petro-authoritarianism’(Thomas Friedman, Hot Flat and Crowded, Penguin Books, 2009, pp. 138-140) will not be disappearing any time soon. As Iraq stabilizes, its potential as a large oil producer with a Iran-Shiite connection will add a new dimension to Middle East geopolitics.
(e) In the process, China will be spending more and saving less as consumption grows from 36% to 50% of GDP by 2025. This growth will be driven by the expansion of Chinese urbanites approaching one
billion by 2030 (McKinsey Global Institute, Preparing for China’s Urban Billion, March, 2008). This is likely to shift the weight of the world’s consumer market more towards the BRIC countries.
(f) Energy, resource and security concerns will force China to redouble her efforts to go Green. Continuing economic growth with a more educated workforce is likely to spawn a whole new generation of green technologies, materials, less energy-intensive industries like informatics, biotechnology, life-sciences, as well as electric cars.
(g) As climate change becomes more up-close and personal with more extreme weather conditions as well as rising energy and fuel prices, Green is spreading from transport, architecture, food, fashion, to lifestyles. Minimalism will be attaining a new level of being chic.
(h) Supported by changing life-styles, the burgeoning car production and car market in China is likely to underpin, if not lead, a worldwide green car revolution that is poised to transform the world’s entire car market as we know it today.
(i) In response to international pressure and to grow domestic consumption, China will be steering a gradual currency appreciation and increasing international acceptance of the RMB (through currency swaps, international trade settlements, and RMB-denominated bond issuance). To relieve pressure on the RMB and to gain international expertise, more outward direct investments will be encouraged, not only to acquire resources but to form equity partnerships with Western businesses. There is likely to be a gradual, if moderate, diversification by China out of what Paul Krugman calls the ‘US Dollar Trap’.
(j) As the world becomes increasingly inter-connected, it is becoming more multi-polar at a time when US leadership remains but her capacity to do so has become more diffused, if not declining. Arising are diverse powerful actors, both state and no-state, with whom any effective leadership in managing a transformed global order will have to work. (Global Trends 2025:A Transformed World, National Intelligence Council Report, Washington D.C., November 2008)
(k) As the world’s middle class grows rapidly, the power of new-age, individual-empowering, global connectivity will expand exponentially. This is likely to challenge non-democratic countries including China on how to manage this dynamic force to serve the best interests of the nation.
Welcome to the Brave New World of the 21st century!
Andrew
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