of fragmentation and integration made Europe an inherently unpredictable actor.”
In a Slow Decline scenario, Europe manages to escape from the worst aspects of the current crisis, but fails to undertake the necessary structural reforms.
As member states endure years of low economic growth, they stick together in order to avoid major political and economic disruptions. EU institutions hang on, but public discontent remains high. The euro survives, but it does not become a rival to the dollar or the renminbi. Given years of low economic growth, Europe’s international presence is diminished;
countries re-nationalize their foreign policies.
Our third scenario, Renaissance, is based on the familiar pattern of crisis and renewal, which Europe has experienced many times in the past. After staring at the abyss, most European leaders agree on a
“federalist leap.” Publics support such a step, given the imminent risks involved maintaining the status quo. A more federal Europe might begin with only a core group of euro zone countries with some choosing to opt out or adopt a wait-and-see policy. Over time, despite the existence of a multispeed Europe, the single market would still be completed and a more united foreign and security policy agreed upon with enhanced elements of European democracy. European influence would increase, strengthening Europe’s role and that of multilateral institutions on the world stage.
sub-saharan afrIca: TurnInG a corner by 2030?
Many African countries have the opportunity to greatly advance while others are likely to be left behind, creating a more diverse Africa in 2030. African countries will be able to choose from the best-proven
rUssIa: PoTenTIal Global fUTUres
russia’s role in the world during the next two decades will be shaped by the rising challenges it faces at home as well as in the global environment.
russia’s economy is its Achilles’ heel. its budget is heavily dependent on energy revenue; efforts to modernize the economy have made little progress;
and its aging of the workforce will be a drag on economic growth.
russia’s population is projected to decline from almost 143 million in 2010 to about 130 million in 2030. Although russia’s fertility rate is similar to that of many european countries and aging populations are also a drag of european economies, life
expectancy is about 15 years lower for russians than for europeans: since 2007 the size of the russian workforce has been declining and it will continue to do so for the next two decades.
however, russia’s greatest demographic challenge could well be integrating its rapidly growing ethnic Muslim population in the face of a shrinking ethnic russian population. there are now about 20 million Muslims in russia, comprising about 14 percent of the population. By 2030, that share is projected to grow to about 19 percent. russia’s changing ethnic mix already appears to be a source of growing social tensions.
to enhance its economic outlook, russia will need to improve the environment for foreign investment and create opportunities for russian exports of manufactured goods. russia’s entry into World trade organization (Wto) should provide a boost to these efforts and help Moscow to diversify the economy: by one estimate russia’s membership in the Wto could provide a substantial boost to the economy, adding 3 percent to GdP in the short term and 11 percent over the longer term.
russia’s relations with the West and China are also likely to be a critical factor in determining whether russia moves toward becoming a more stable, constructive global player during the next two decades. We see three possibilities:
1. russia could become more of a partner with others, most probably, in a marriage of convenience, not of values. russia’s centuries-long ambivalence about its relationship with the West and outside is still at the heart of the struggle over russia’s strategic direction.
2. russia might continue in a more or less ambivalent relationship with the other powers, but over the next 20 years this path would likely be a more troublesome one for international cooperation if russia rebuilds its military strength and must contend with an increasingly powerful China.
3. russia could become a very troublesome country, trying to use its military advantage over its neighbors to intimidate and dominate. this outcome would be most likely if a russian leader were facing rising public discontent over sagging living standards and darkening economic prospects and is looking to rally nationalist sentiments by becoming much more assertive in the near Abroad.
laTIn amerIca: more prosperous buT InherenTly fraGIle
Latin America and the Caribbean have undergone far-reaching change during the past decade, including sustained economic growth and a reduction in poverty.
The greater integration of the Americas through free trade agreements (FTAs) with the North American Free Trade Agreement (NAFTA) has expanded to multiple regional and extra-regional FTAs, especially by Canada, Chile, Colombia, Mexico, and Peru. With annual real GDP growth averaging 4 percent, the ranks of the middle classes have swelled, along with greater economic and political participation by women, indigenous peoples, and minority groups, many of whom have benefited from greater access to education and health services. However, the distribution of these political and economic benefits remains uneven across Latin America and the Caribbean, even though income inequality has been reduced in recent years.
Other trends, such as the spread of criminal violence associated with drug trafficking and criminal
gangs have hurt the region. Two primary factors, one external and the other internal, will drive the economic growth rate and quality of life in Latin America over the next 18 years. The first factor is the pace of world economic growth, which affects the demand for Latin American commodities, goods, labor and other services. China has led in ramping up demand for Latin American commodities to the point that many experts in Brazil and elsewhere worry about an overdependence on commodity exports. Cheap Chinese imports have also undercut the competitiveness of industrial goods, and some of our interlocutors worry about the future of the manufacturing sector.
The second key factor is the extent to which Latin American countries position themselves to capture potential economic gains through investments in education, market-opening reforms, and enhanced rule of law and governing capacity. Assuming that average GDP growth in the region declines to 3.5 with the lower global growth projections, aggregate Latin American GDP will total $9 trillion by 2030, possibly if they do not work to diversify their economies.
Technological advances in the developed world might reduce demand for African hydrocarbons and other minerals. The high petroleum prices of recent years enjoyed by oil-dependent economies such as Angola and Nigeria might not continue. On the other hand, Africa was largely insulated from the shock of recent international financial crises because African borrowing from private lenders is limited.
The diffusion of power in the international system toward multipolarity is unlikely to give Africa a much stronger voice in global forums by 2030, given its weaker economic weight in the international system.
Global powers will most likely be less able to forge consensus to address African crises if the United States and Europe are less able to assert leadership and provide assistance. Consequently, Africa will need to become more independently able to address regional threats. Opportunities exist to strengthen the African Union and subregional organizations to this end.
Africa will be at risk of conflict and increased violence as development proceeds unevenly among and within African countries. Most African states already face moderate-to-high threats of instability but improved governance, resource management, and economic diversification offer the chance to move to more stable ground. The Sahel region, Congo/DROC, and Somalia will be the most vulnerable and challenged to improve governance and resource management.
In some instances, individual empowerment and disillusionment with the unmet promises of modern democracy, education, and medicine will highlight ethnic and religious divisions at the expense of national unity. Beyond traditional conflict, criminal networks and extremist groups will be able to expand their reach within countries and across borders if the capabilities of national governments do not keep pace.
Despite the strides toward greater stability in Sub-Saharan Africa, substantial outside humanitarian and economic assistance will be needed to ensure these continuing conflicts do not spill over into broader regional and global conflagrations.
overwhelmed by crime and infrastructure strain, and there is no greater investment in education.
The environment could play a critical role in Brazil’s fortunes during the next 15-20 years—the Amazon Basin produces about 20 percent of the Earth’s fresh water flows into the oceans and has a major impact on global weather. An Amazon die-back or deforestation could alter the region’s water cycle in a way that would devastate Brazilian and much of Argentinian agriculture. Recent models suggest a die-back tipping point could be when deforestation reaches 20 percent;
it presently stands at 18 percent.
approaching half the size of the US economy. Given reduced population growth rates, Latin America’s per capital income could reach $14,000—almost 50 per cent more than current levels. At the same time, the emergence of an even larger middle class in Latin America will fuel additional political and economic expectations with which governments must be prepared to cope.
Under more adverse global circumstances,
vulnerabilities in some Latin American countries could generate strategically significant crisis if stability is jeopardized amid spiking insecurity and transnational criminal activity; institutions are undermined by populist politics; and integration, trade, and growth drop precipitously with the contagion spreading more broadly throughout the region. In such a scenario, outside actors such as the US may be confronted with a range of politically and economically costly dilemmas that impose substantial trade-offs for the United States’
and others’ abilities to cope with emergencies in Latin America and elsewhere. Natural disasters—frequent already in Central America and the Caribbean—could have fundamental stability implications in a weaker global economic environment.
Even in the case of a relatively robust global economy, subregions such as Central America and Caribbean will find it harder to cope with security and governance challenges. Rising food and fuel costs are likely to add further strain on the more fragile governance structures in Central America and the Caribbean. In recent years, Mexican drug cartels have increasingly used Central America for transshipment, which also undermines governance and rule of law. Unlike elsewhere in the region, Central America’s lack of competitiveness and continuing sole reliance on US markets means that its economy has not grown at the rate it needs to to attract investment and generate jobs for its large youth population.
Brazil will play an outsized role on the region’s future. Its resources and scale could offer benefits and insulation others lack. However, the country could be challenged if global trade and growth declines, instability grows on its periphery, megacities are
many emerging markets, like China has recently done in photovoltaic panels.
Technological breakthroughs pertaining to the security of vital resources will be necessary to meet the food, water, and energy needs of the world’s population. Key technologies likely to be at the forefront in this arena will include genetically modified crops, precision agriculture, water-irrigation techniques, solar energy, advanced bio-based fuels, and enhanced oil and natural gas extraction via fracturing (see box on page 35).
“ . . . a shift in the technology center of gravity from West to East and South . . . almost certainly will continue . . . ”
Last but not least, new health technologies will continue to extend the average age of populations around the world, ameliorate debilitating physical and mental conditions, and improve overall well-being.
InformaTIon TechnoloGIes
During the next 15-20 years, the hardware, software, and connectivity aspects of IT will experience massive growth in capability and complexity as well as more widespread diffusion. This growth and diffusion will present significant challenges for governments and societies, which must find ways to capture the benefits of new IT technologies while dealing with the new threats that those technologies present.
Three technology developments with an IT focus have the power to change the way we will live, do business, and protect ourselves before 2030: solutions for storage and processing large quantities of data, social networking technologies, and “smart cities”
encompassing a host of urban technologies enabled by enhanced and secure IT systems. Advances in data storage and analysis herald a coming economic boom in North America; advances in a host of urban technologies will be shaped by the giant investments in smart-cities infrastructures in the developing world.