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The likely emergence of China and India as new major global players—similar to the rise of Germany in the 19th century and the United States in the early 20th century—will transform the geopolitical landscape, with impacts potentially as dramatic as those of the previous two centuries. In the same way that commentators refer to the 1900s as the “American Century,” the early 21st century may be seen as the time when some in the developing world, led by China and India, come into their own.
A combination of sustained high economic growth, expanding military capabilities, active promotion of high technologies, and large populations will be at the root of the expected rapid rise in economic and political power for both countries.
At the same time, other changes are likely to shape the new landscape. These include the possible economic rise of other states—such as Brazil, South Africa, Indonesia, and even Russia—which may reinforce the growing role of China and India even though by themselves these other countries would have more limited geopolitical impact. Finally, we do not discount the possibility of a stronger, more united Europe and a more internationally activist Japan, although Europe, Japan, and Russia will be hard pressed to deal with aging populations. The growing demand for energy will drive many of these likely changes on the geopolitical landscape. China's and India's perceived need to secure access to energy supplies will propel these countries to become more global rather than just regional powers, while Europe and Russia's co-dependency is likely to be strengthened. Rising Asia
China will continue to strengthen its military through developing and acquiring modern weapons, including advanced fighter aircraft, sophisticated submarines, and increasing numbers of ballistic missiles. China will overtake Russia and others as the second largest defense spender after the United States over the next two decades and will be, by any measure, a first-rate military power. Economic setbacks and crises of confidence could slow China's emergence as a full-scale great power, however. Beijing's failure to maintain its economic growth would itself have a global impact.
The rise of India also will present strategic complications for the region. Like China, India will be an economic magnet for the region, and its rise will have an impact not only in Asia but also to the north—Central Asia, Iran, and other countries of the Middle East. India seeks to bolster regional cooperation both for strategic reasons and because of its desire to increase its leverage with the West, including in such organizations as the World Trade Organization (WTO). As India's economy grows, governments in Southeast Asia—Malaysia, Singapore, Thailand, and other countries—may move closer to India to help build a potential geopolitical counterweight to China. At the same time, India will seek to strengthen its ties with countries in the region without excluding China.
Just like China, India may stumble and experience political and economic volatility with pressure on resources—land, water, and energy supplies—intensifying as it modernizes. For example, India will face stark choices as its population increases and its surface and ground water become even more polluted. Other Rising States? Risks to Chinese Economic Growth Whether China's rise occurs smoothly is a key uncertainty. In 2003, the RAND Corporation identified and assessed eight major risks to the continued rapid growth of China's economy over the next decade. Its “Fault Lines in China's Economic Terrain” highlighted:
RAND's estimates of the negative growth impact of these adverse developments occurring separately on a one-at-a-time basis range from a low of between 0.3 and 0.8 percentage points for the effects of poverty, social unrest, and unemployment to a high of between 1.8 and 2.2 percentage points for epidemic disease.
India vs. China: Long-Term Prospects India lags economically behind China, according to most measures such as overall GDP, amount of foreign investment (today a small fraction of China's), and per capita income. In recent years, India's growth rate has lagged China's by about 20 percent. Nevertheless, some experts believe that India might overtake China as the fastest growing economy in the world. India has several factors working for it:
On the other hand, while India has clearly evolved beyond what the Indians themselves referred to as the 2-3 percent “Hindu growth rate,” the legacy of a stifling bureaucracy still remains. The country is not yet attractive for foreign investment and faces strong political challenges as it continues down the path of economic reform. India is also faced with the burden of having a much larger proportion of its population in desperate poverty. In addition, some observers see communal tensions just below the surface, citing the overall decline of secularism, growth of regional and caste-based political parties, and the 2002 “pogrom” against the Muslim minority in Gujarat as evidence of a worsening trend. Several factors could weaken China's prospects for economic growth, especially the risks to political stability and the challenges facing China's financial sector as it moves toward a fuller market orientation. China might find its own path toward an “Asian democracy” that may not involve major instability or disruption to its economic growth—but there are a large number of unknowns. In many other respects, both China and India still resemble other developing states in the problems each must overcome, including the large numbers, particularly in rural areas, who have not enjoyed major benefits from economic growth. Both also face a potentially serious HIV/AIDS epidemic that could seriously affect economic prospects if not brought under control. According to recent UN data, India has overtaken South Africa as the country with the largest number of HIV-infected people. The bottom line: India would be hard-pressed to accelerate economic growth rates to levels above those reached by China in the past decade. But China's ability to sustain its current pace is probably more at risk than is India's; should China's growth slow by several percentage points, India could emerge as the world's fastest-growing economy as we head towards 2020. Experts acknowledge that Brazil is a pivotal state with a vibrant democracy, a diversified economy and an entrepreneurial population, a large national patrimony, and solid economic institutions. Brazil's success or failure in balancing pro-growth economic measures with an ambitious social agenda that reduces poverty and income inequality will have a profound impact on region-wide economic performance and governance during the next 15 years. Luring foreign direct investment and advancing regional stability and equitable integration—including trade and economic infrastructure—probably will remain axioms of Brazilian foreign policy. Brazil is a natural partner both for the United States and Europe and for rising powers China and India and has the potential to enhance its leverage as a net exporter of oil. Experts assess that over the course of the next decade and a half Indonesia may revert to high growth of 6 to 7 percent, which along with its expected increase in its relatively large population from 226 to around 250 million would make it one of the largest developing economies. Such high growth would presume an improved investment environment, including intellectual property rights protection and openness to foreign investment. With slower growth its economy would be unable to absorb the unemployed or under-employed labor force, thus heightening the risk of greater political instability. Indonesia is an amalgam of divergent ethnic and religious groups. Although an Indonesian national identity has been forged in the five decades since independence, the government is still beset by stubborn secessionist movements. Russia's energy resources will give a boost to economic growth, but Russia faces a severe demographic challenge resulting from low birth rates, poor medical care, and a potentially explosive AIDS situation. US Census Bureau projections show the working-age population likely to shrink dramatically by 2020. Russia's present trajectory away from pluralism toward bureaucratic authoritarianism also decreases the chances it will be able to attract foreign investment outside the energy sector, limiting prospects for diversifying its economy. The problems along its southern borders—including Islamic extremism, terrorism, weak states with poor governance, and conflict—are likely to get worse over the next 15 years. Inside Russia, the autonomous republics in North Caucasus risk failure and will remain a source of endemic tension and conflict. While these social and political factors limit the extent to which Russia can be a major global player, in the complex world of 2020 Russia could be an important, if troubled, partner both for the established powers, such as the United States and Europe, and the rising powers of China and India. The potential also exists for Russia to enhance its leverage with others as a result of its position as a major oil and gas exporter. Asia: The Cockpit for Global Change? According to the regional experts we consulted, Asia will exemplify most of the trends that we see as shaping the world over the next 15 years. Northeast and Southeast Asia will progress along divergent paths—the countries of the North will become wealthier and more powerful, while at least some states in the South may lag economically and will continue to face deep ethnic and religious cleavages. As Northeast Asia acts as a political and economic center of gravity for the countries of the South, parts of Southeast Asia will be a source of transnational threats—terrorism and organized crime—to the countries of the North. The North/South divisions are likely to be reflected in a cultural split between non-Muslim Northeast Asia, which will adapt to the continuing spread of globalization, and Southeast Asia, where Islamic fundamentalism may increasingly make inroads in such states as Indonesia, Malaysia, and parts of The Philippines. The diversion of investment towards China and India also could spur Southeast Asia to implement plans for a single economic community and investment area by 2020. The experts also felt that demographic factors will play a key role in shaping regional developments. China and other countries in Northeast Asia, including South Korea, will experience a slowing of population growth and a “graying” of their peoples over the next 15 years. China also will have to face the consequences of a gender imbalance caused by its one-child policy. In Southeast Asian countries such as The Philippines and Indonesia, rising populations will challenge the capacity of governments to provide basic services. Population and poverty pressures will spur migration within the region and to Northeast Asia. High population concentrations and increasing ease of travel will facilitate the spread of infectious diseases, risking the outbreak of pandemics. The regional experts felt that the possibility of major inter-state conflict remains higher in Asia than in other regions. In their view, the Korean Peninsula and Taiwan Strait crises are likely to come to a head by 2020, risking conflict with global repercussions. At the same time, violence within Southeast Asian states—in the form of separatist insurgencies and terrorism—could intensify. China also could face sustained armed unrest from separatist movements along its western borders. Finally, the roles of and interaction between the region's major powers—China, Japan, and the US—will undergo significant change by 2020. The United States and China have strong incentives to avoid confrontation, but rising nationalism in China and fears in the US of China as an emerging strategic competitor could fuel an increasingly antagonistic relationship. Japan's relationship with the US and China will be shaped by China's rise and the nature of any settlement on the Korean Peninsula and over Taiwan.
South Africa will continue to be challenged by AIDS and widespread crime and poverty, but prospects for its economy—the largest in the region—look promising. According to some forecasts, South Africa's economy is projected to grow over the next decade in the 4- to 5-percent range if reformist policies are implemented. Experts disagree over whether South Africa can be an engine for more than southern Africa or will instead forge closer relationships with middling or up-and-coming powers on other continents. South African experts adept at scenario-building and gaming see the country's future as lying with partnerships formed outside the region. The “Aging” Powers Opinion polls indicate growing public support for Japan becoming a more “normal” country with a proactive foreign policy. Experts see various trajectories that Japan could follow depending on such factors as the extent of China's growing strength, a resurgence or lack of continued vitality in Japan's economy, the level of US influence in the region and how developments in Korea and Taiwan play out. At some point, for example, Japan may have to choose between “balancing” against or “bandwagoning” with China.
By most measures—market size, single currency, highly skilled work force, stable democratic governments, unified trade bloc, and GDP—an enlarged Europe will have the ability to increase its weight on the international scene. Its crossroads location and the growing diversity of its population—particularly in pulling in new members—provides it with a unique ability to forge strong bonds both to the south with the Muslim world and Africa and to the east with Russia and Eurasia. The extent to which Europe enhances its clout on the world stage depends on its ability to achieve greater political cohesion. In the short term, taking in ten new east European members probably will be a “drag” on the deepening of European Union (EU) institutions necessary for the development of a cohesive and shared “strategic vision” for the EU's foreign and security policy.
Defense spending by individual European countries, including the UK, France, and Germany is likely to fall further behind China and other countries over the next 15 years. Collectively these countries will outspend all others except the US and possibly China [8] . EU member states historically have had difficulties in coordinating and rationalizing defense spending in such a way as to boost capabilities despite progress on a greater EU security and defense role. Whether the EU will develop an army is an open question, in part because its creation could duplicate or displace NATO forces. While its military forces have little capacity for power projection, Europe's strength may be in providing, through its commitment to multilateralism, a model of global and regional governance to the rising powers, particularly if they are searching for a “Western” alternative to strong reliance on the United States. For example, an EU-China alliance, though still unlikely, is no longer unthinkable. Aging populations and shrinking work forces in most countries will have an important impact on the continent, creating a serious but not insurmountable economic and political challenge. Europe's total fertility rate is about 1.4—well below the 2.1 replacement level. Over the next 15 years, West European economies will need to find several million workers to fill positions vacated by retiring workers. Either European countries adapt their work forces, reform their social welfare, education, and tax systems, and accommodate growing immigrant populations (chiefly from Muslim countries) or they face a period of protracted economic stasis that could threaten the huge successes made in creating a more United Europe. According to US Census Bureau projections, about half of the world's population lives in countries or territories whose fertility rates are not sufficient to replace their current populations. This includes not only Europe, Russia, and Japan, where the problem is particularly severe, but also most parts of developed regions such as Australia, New Zealand, North America, and East Asian countries like Singapore, Hong Kong, Taiwan, and South Korea. Certain countries in the developing world, including Arab states such as Turkey, Algeria, Tunisia, and Lebanon, also are dropping below the level of 2.1 children per woman necessary to maintain long-term population stability. [9] China is a special case where the transition to an aging population—nearly 400 million Chinese will be over 65 by 2020—is particularly abrupt and the emergence of a serious gender imbalance could have increasing political, social, and even international repercussions. An unfunded nationwide pension arrangement means many Chinese may have to continue to work into old age. Migration has the potential to help solve the problem of a declining work force in Europe and, to a lesser degree, Russia and Japan and probably will become a more important feature of the world of 2020, even if many of the migrants do not have legal status. Recipient countries face the challenge of integrating new immigrants so as to minimize potential social conflict.
However, today one-half of Nigerian-born medical doctors and PhDs reside in the United States. Most experts do not expect the current, pronounced trend of “brain drain” from the Middle East and Africa to diminish. Indeed, it could increase with the expected growth of employment opportunities, particularly in Europe. Growing Demands for Energy
The International Energy Agency assesses that with substantial investment in new capacity, overall energy supplies will be sufficient to meet growing global demand. Continued limited access of the international oil companies to major fields could restrain this investment, however, and many of the areas—the Caspian Sea, Venezuela, West Africa and South China Sea—that are being counted on to provide increased output involve substantial political or economic risk. Traditional suppliers in the Middle East are also increasingly unstable. Thus sharper demand-driven competition for resources, perhaps accompanied by a major disruption of oil supplies, is among the key uncertainties. Could Europe Become A Superpower? According to the regional experts we consulted, Europe's future international role depends greatly on whether it undertakes major structural economic and social reforms to deal with its aging work-force problem. The demographic picture will require a concerted, multidimensional approach including:
The experts felt that the current welfare state is unsustainable and the lack of any economic revitalization could lead to the splintering or, at worst, disintegration of the European Union, undermining its ambitions to play a heavyweight international role. The experts believe that the EU's economic growth rate is dragged down by Germany and its restrictive labor laws. Structural reforms there—and in France and Italy to lesser extents—remain key to whether the EU as a whole can break out of its slow-growth pattern. A total break from the post-World War II welfare state model may not be necessary, as shown in Sweden's successful example of providing more flexibility for businesses while conserving many worker rights. Experts are dubious that the present political leadership is prepared to make even this partial break, believing a looming budgetary crisis in the next five years would be the more likely trigger for reform. If no changes were implemented Europe could experience a further overall slowdown, and individual countries might go their own way, particularly on foreign policy, even if they remained nominal members. In such a scenario, enlargement is likely to stop with current members, making accession unlikely for Turkey and the Balkan countries, not to mention long-term possibilities such as Russia or Ukraine. Doing just enough to keep growth rates at one or two percent may result in some expansion, but Europe probably would not be able to play a major international role commensurate with its size. In addition to the need for increased economic growth and social and welfare reform, many experts believe the EU has to continue streamlining the complicated decision-making process that hinders collective action. A federal Europe—unlikely in the 2020 timeframe—is not necessary to enable it to play a weightier international role so long as it can begin to mobilize resources and fuse divergent views into collective policy goals. Experts believe an economic “leap forward”—stirring renewed confidence and enthusiasm in the European project—could trigger such enhanced international action. China and India, which lack adequate domestic energy resources, will have to ensure continued access to outside suppliers; thus, the need for energy will be a major factor in shaping their foreign and defense policies, including expanding naval power.
The Geopolitics of Gas. Both oil and gas suppliers will have greater leverage than today, but the relationship between gas suppliers and consumers is likely to be particularly strong because of the restrictions on delivery mechanisms. Gas, unlike oil, is not yet a fungible source of energy, and the interdependency of pipeline delivery—producers must be connected to consumers, and typically neither group has many alternatives—reinforces regional alliances.
Europe's energy needs are unlikely to grow to the same extent as those of the developing world, in part because of Europe's expected lower economic growth and more efficient use of energy. Europe's increasing preference for natural gas, combined with depleting reserves in the North Sea, will give an added boost to political efforts already under way to strengthen ties with Russia and North Africa, as gas requires a higher level of political commitment by both sides in designing and constructing the necessary infrastructure. According to a study by the European Commission, the Union's share of energy from foreign sources will rise from about half in 2000 to two-thirds by 2020. Gas use will increase most rapidly due to environmental concerns and the phasing out of much of the EU's nuclear energy capacity.
Deliveries from the Yamal-Europe pipeline and the Blue Stream pipeline will help Russia increase its gas sales to the EU and Turkey by more than 40 percent over 2000 levels in the first decade of the 21st century; as a result, Russia's share of total European demand will rise from 27 percent in 2000 to 31 percent in 2010. Russia, moreover, as the largest energy supplier outside of OPEC, will be well positioned to marshal its oil and gas reserves to support domestic and foreign policy objectives. Algeria has the world's eighth largest gas reserves and also is seeking to increase its exports to Europe by 50 percent by the end of the decade. US Unipolarity—How Long Can It Last?
Most countries are likely to experiment with a variety of different tactics from various degrees of resistance to engagement in an effort to influence how US power is exercised. We expect that countries will pursue strategies designed to exclude or isolate the US—perhaps temporarily—in order to force or cajole the US into playing by others' rules. Many countries increasingly believe that the surest way to gain leverage over Washington is by threatening to withhold cooperation. In other forms of bargaining, foreign governments will try to find ways to “bandwagon” or connect their policy agendas to those of the US—for example on the war on terrorism—and thereby fend off US opposition to other policies. Fictional Scenario: Pax AmericanaThe scenario portrayed below looks at how US predominance may survive radical changes to the global political landscape, with Washington remaining the central pivot for international politics. It is depicted as the diary entry by a fictitious UN Secretary-General in 2020. Under this scenario, key alliances and relationships with Europe and Asia undergo change. US-European cooperation is renewed, including on the Middle East. There are new security arrangements in Asia, but the United States still does the heavy lifting. The scenario also suggests that Washington has to struggle to assert leadership in an increasingly diverse, complex, and fast-paced world. At the end of the scenario, we identify lessons learned from how the scenario played out.
UN Secretary General Private Diary Entry September 11, 2020 It has been exactly nineteen years today since the view from the 38th floor changed with the destruction of the Twin Towers. I was remarking when the President of the United States phoned that more than the skyline has been altered since. Not only has a new structure been built, partially obscuring the devastation of 9/11, but the US has risen like a phoenix—albeit a beleaguered one—and it again seems to be the bedrock of the international order. I would say it started when Europe and America began to get together again. It turns out Venus and Mars cross each other's orbits from time to time. The 2010 terrorist attacks in Europe had a lot to do with it. They changed attitudes, and suddenly the Europeans had a better appreciation of catastrophic terrorism—a whole different kettle of fish from what they had known. Publics quickly became energized, particularly as the attacks were seen as totally unjustified. The seriousness of the attacks was such that Europe and America got beyond the name-calling and, in fact, Europeans began imploring America to get tough on terrorism. The closing of transatlantic ranks was prompted by more than this. One thing that became clear is that Europe was more unified than some of our American friends imagined. New Europe turned out to be not that much different from Old Europe, once it joined the EU club and began hanging out in Brussels. NATO went through some rough times but is now working better with the EU. There is grudging acceptance on both sides that NATO has the necessary military tools while the EU can bring to the table a capacity for nation-building. On the European side, a lot had to do with Turkish accession—something I never expected to see. With the prospect of Turkey coming in, the Europeans realized that their border was now squarely in the Middle East and that meant they had to be more prepared to deal with all the problems of terrorism, fundamentalism, youth bulges, etc. Coming together as they did, Europe helped to persuade the US that something had to be done to stop the spiraling violence in Palestine. For the Europeans, that had always been the root of the problem, but divisions and a lack of will always got in the way of any concerted action. Energy and climate change are also playing an increasing role in the US-European dynamics, but not the way one would have expected. For a while, the Europeans looked like they were trying to isolate the US and insist on Washington playing by EU rules. But that was never really going to happen, and European leaders did not factor in their own publics' increasing resentment of China's and other developing countries' flaunting of environmental standards. Kyoto was suddenly out and a new framework had to be thought up with the Americans inside. The US role changed even more dramatically in Asia. China was rising and, while not directly challenging the US, was certainly displacing it in the region, particularly economically. America's preoccupation with Iraq and terrorism looked set to diminish the US role even more. Japan stood close to the US on Iraq but was conflicted too because of its economic dependence on China. In South Korea, the younger generation blamed the US for the division and problems with the North. It seemed only a matter of time before the US would be pushed to the sidelines. This is hardly a marriage made in Heaven and both the US and China have to work hard to keep from going off the rails. I see more storm clouds over Taiwan on the horizon. Nationalism appears to afflict everybody. The rising Chinese middle class turns out to be less interested in democracy and more in nationalism. Worries about energy supplies have also redounded in America's favor. A stable Middle East is a must for China on energy grounds just as it is for Europe. The US also is increasingly a balancer between the Shia and the Sunnis. Washington may not have been prepared for how a free and Shia-dominated Iraq began to swing the balance and raise tensions right in the region where most of the world's oil comes from. Not an enviable position to be in for the Americans. I get the feeling at times that a lot of Americans are getting tired of playing the world's policeman. The security burden is still on their shoulders; this is the source of their frustration with the Europeans, who just want to focus on the EU. The Americans thought they had a deal—Washington would do the heavy lifting with Israel, but the Europeans would be prepared to pony up money and troops for a Middle East peacekeeping force. But that looks to be in tatters. How long will Pax Americana last? I'm not sure. It hasn't meant much institution-building. Sure, the UN works a little better because there is more cooperation among the members, but we've done little on reform. India is getting more frustrated. The Africans, Latin Americans and poor Asians still feel underappreciated and some even are resentful of China and India's rise, which has squeezed out opportunities for them. The Human Rights Commission, which morphed a few years back into the Human Rights and Ethics Commission, is stymied over human cloning, GMOs and whether energy consumption should be globally regulated. For all the practical cooperation there has been on terrorism, we still don't have an agreed-upon definition which could unite countries around a counterterrorism strategy. To top if off, I am in a vicious fight on two fronts in order to stay here in New York, both against the "America firster" groups calling for the UN's removal and large numbers of Europeans and Asians who think the UN is too much under the thumb of Washington. I often wonder just how much real progress there has been. I must talk to the US President about this the next time we "girls" get together…
"Lessons Learned" A geopolitical environment in which US power dominates would become more complex.
Competing coalitions would be likely to fight over moral and ethical issues. The US would be looked to for leadership, but the scenario suggests it would take dexterity to achieve consensus. And the Pax Americana would not necessarily be a "sweet" deal for the United States.
[6] CIA, Long-Term Global Demographic Trends: Reshaping the Geopolitical Landscape, July 2001. [7] Asia's Shifting Strategic Landscape, Foreign Policy Research Institute, 26 November 2003. [8] Strategic Trends, Joint Doctrine and Concepts Centre, March 2003. [9] Nicholas Eberstadt, “Four Surprises in Global Demography,” Foreign Policy Research Institute's Watch on the West, Vol 5, Number 5, July 2004.
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