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The 2020 Global Landscape

NIC - Mapping the Global Future: Executive Summary

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Document Cover Image: Mapping the Global Future

Report of the
National Intelligence Council's
2020 Project

Executive Summary
The 2020 Global Landscape

Relative Certainties Key Uncertainties

Globalization largely irreversible, likely to become less Westernized. Whether globalization will pull in lagging economies; degree to which Asian countries set new “rules of the game.”

World economy substantially larger. Extent of gaps between “haves” and “have-nots”; backsliding by fragile democracies; managing or containing financial crises.

Increasing number of global firms facilitate spread of new technologies. Extent to which connectivity challenges governments.

Rise of Asia and advent of possible new economic middle-weights. Whether rise of China/India occurs smoothly.

Aging populations in established powers. Ability of EU and Japan to adapt work forces, welfare systems, and integrate migrant populations; whether EU becomes a superpower.

Energy supplies “in the ground” sufficient to meet global demand. Political instability in producer countries; supply disruptions.

Growing power of nonstate actors. Willingness and ability of states and international institutions to accommodate these actors.

Political Islam remains a potent force. Impact of religiosity on unity of states and potential for conflict; growth of jihadist ideology.

Improved WMD capabilities of some states. More or fewer nuclear powers; ability of terrorists to acquire biological, chemical, radiological, or nuclear weapons.

Arc of instability spanning Middle East, Asia, Africa. Precipitating events leading to overthrow of regimes.

Great power conflict escalating into total war unlikely. Ability to manage flashpoints and competition for resources.

Environmental and ethical issues even more to the fore. Extent to which new technologies create or resolve ethical dilemmas.

US will remain single most powerful actor economically, technologically, militarily. Whether other countries will more openly challenge Washington; whether US loses S&T edge.

At no time since the formation of the Western alliance system in 1949 have the shape and nature of international alignments been in such a state of flux. The end of the Cold War shifted the tectonic plates, but the repercussions from these momentous events are still unfolding. Emerging powers in Asia, retrenchment in Eurasia, a roiling Middle East, and transatlantic divisions are among the issues that have only come to a head in recent years. The very magnitude and speed of change resulting from a globalizing world—apart from its precise character—will be a defining feature of the world out to 2020. Other significant characteristics include: the rise of new powers, new challenges to governance, and a more pervasive sense of insecurity, including terrorism. As we map the future, the prospects for increasing global prosperity and the limited likelihood of great power conflict provide an overall favorable environment for coping with what are otherwise daunting challenges. The role of the United States will be an important variable in how the world is shaped, influencing the path that states and nonstate actors choose to follow.

Relative Certainties Key Uncertainties

Globalization largely irreversible, likely to become less Westernized. Whether globalization will pull in lagging economies; degree to which Asian countries set new “rules of the game.”

World economy substantially larger. Extent of gaps between “haves” and “have-nots”; backsliding by fragile democracies; managing or containing financial crises.

Increasing number of global firms facilitate spread of new technologies. Extent to which connectivity challenges governments.

Rise of Asia and advent of possible new economic middle-weights. Whether rise of China/India occurs smoothly.

Aging populations in established powers. Ability of EU and Japan to adapt work forces, welfare systems, and integrate migrant populations; whether EU becomes a superpower.

Energy supplies “in the ground” sufficient to meet global demand. Political instability in producer countries; supply disruptions.

Growing power of nonstate actors. Willingness and ability of states and international institutions to accommodate these actors.

Political Islam remains a potent force. Impact of religiosity on unity of states and potential for conflict; growth of jihadist ideology.

Improved WMD capabilities of some states. More or fewer nuclear powers; ability of terrorists to acquire biological, chemical, radiological, or nuclear weapons.

Arc of instability spanning Middle East, Asia, Africa. Precipitating events leading to overthrow of regimes.

Great power conflict escalating into total war unlikely. Ability to manage flashpoints and competition for resources.

Environmental and ethical issues even more to the fore. Extent to which new technologies create or resolve ethical dilemmas.

US will remain single most powerful actor economically, technologically, militarily. Whether other countries will more openly challenge Washington; whether US loses S&T edge.

New Global Players

The likely emergence of China and India, as well as others, as new major global players—similar to the advent of a united Germany in the 19th century and a powerful United States in the early 20th century—will transform the geopolitical landscape, with impacts potentially as dramatic as those in the previous two centuries. In the same way that commentators refer to the 1900s as the “American Century,” the 21st century may be seen as the time when Asia, led by China and India, comes into its own. A combination of sustained high economic growth, expanding military capabilities, and large populations will be at the root of the expected rapid rise in economic and political power for both countries.

* Most forecasts indicate that by 2020 China’s gross national product (GNP) will exceed that of individual Western economic powers except for the United States. India’s GNP will have overtaken or be on the threshold of overtaking European economies.

* Because of the sheer size of China’s and India’s populations—projected by the US Census Bureau to be 1.4 billion and almost 1.3 billion respectively by 2020—their standard of living need not approach Western levels for these countries to become important economic powers.

Barring an abrupt reversal of the process of globalization or any major upheavals in these countries, the rise of these new powers is a virtual certainty. Yet how China and India exercise their growing power and whether they relate cooperatively or competitively to other powers in the international system are key uncertainties. The economies of other developing countries, such as Brazil, could surpass all but the largest European countries by 2020; Indonesia’s economy could also approach the economies of individual European countries by 2020.

By most measures—market size, single currency, highly skilled work force, stable democratic governments, and unified trade bloc—an enlarged Europe will be able to increase its weight on the international scene. Europe’s strength could be in providing a model of global and regional governance to the rising powers. But aging populations and shrinking work forces in most countries will have an important impact on the continent. 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.

Japan faces a similar aging crisis that could crimp its longer run economic recovery, but it also will be challenged to evaluate its regional status and role. Tokyo may have to choose between “balancing” against or “bandwagoning” with China. Meanwhile, the crisis over North Korea is likely to come to a head sometime over the next 15 years. Asians’ lingering resentments and concerns over Korean unification and cross-Taiwan Strait tensions point to a complicated process for achieving regional equilibrium.

Russia has the potential to enhance its international role with others due to its position as a major oil and gas exporter. However, Russia faces a severe demographic crisis resulting from low birth rates, poor medical care, and a potentially explosive AIDS situation. To the south, it borders an unstable region in the Caucasus and Central Asia, the effects of which—Muslim extremism, terrorism, and endemic conflict—are likely to continue spilling over into Russia. While these social and political factors limit the extent to which Russia can be a major global player, Moscow is likely to be an important partner both for the established powers, the United States and Europe, and for the rising powers of China and India.

With these and other new global actors, how we mentally map the world in 2020 will change radically. The “arriviste” powers—China, India, and perhaps others such as Brazil and Indonesia—have the potential to render obsolete the old categories of East and West, North and South, aligned and nonaligned, developed and developing. Traditional geographic groupings will increasingly lose salience in international relations. A state-bound world and a world of mega-cities, linked by flows of telecommunications, trade and finance, will co-exist. Competition for allegiances will be more open, less fixed than in the past.

Impact of Globalization

We see globalization—growing interconnectedness reflected in the expanded flows of information, technology, capital, goods, services, and people throughout the world—as an overarching “mega-trend,” a force so ubiquitous that it will substantially shape all the other major trends in the world of 2020. But the future of globalization is not fixed; states and nonstate actors—including both private companies and NGOs—will struggle to shape its contours. Some aspects of globalization—such as the growing global interconnectedness stemming from the information technology (IT) revolution—almost certainly will be irreversible. Yet it is also possible, although unlikely, that the process of globalization could be slowed or even stopped, just as the era of globalization in the late 19th and early 20th centuries was reversed by catastrophic war and global depression.

Barring such a turn of events, the world economy is likely to continue growing impressively: by 2020, it is projected to be about 80 percent larger than it was in 2000, and average per capita income will be roughly 50 percent higher. Of course, there will be cyclical ups and downs and periodic financial or other crises, but this basic growth trajectory has powerful momentum behind it. Most countries around the world, both developed and developing, will benefit from gains in the world economy. By having the fastest-growing consumer markets, more firms becoming world-class multinationals, and greater S&T stature, Asia looks set to displace Western countries as the focus for international economic dynamism—provided Asia’s rapid economic growth continues.

Yet the benefits of globalization won’t be global. Rising powers will see exploiting the opportunities afforded by the emerging global marketplace as the best way to assert their great power status on the world stage. In contrast, some now in the “First World” may see the closing gap with China, India, and others as evidence of a relative decline, even though the older powers are likely to remain global leaders out to 2020. The United States, too, will see its relative power position eroded, though it will remain in 2020 the most important single country across all the dimensions of power. Those left behind in the developing world may resent China and India’s rise, especially if they feel squeezed by their growing dominance in key sectors of the global marketplace. And large pockets of poverty will persist even in “winner” countries.

The greatest benefits of globalization will accrue to countries and groups that can access and adopt new technologies. Indeed, a nation’s level of technological achievement generally will be defined in terms of its investment in integrating and applying the new, globally available technologies—whether the technologies are acquired through a country’s own basic research or from technology leaders. The growing two-way flow of high-tech brain power between the developing world and the West, the increasing size of the information computer-literate work force in some developing countries, and efforts by global corporations to diversify their high-tech operations will foster the spread of new technologies. High-tech breakthroughs—such as in genetically modified organisms and increased food production—could provide a safety net eliminating the threat of starvation and ameliorating basic quality of life issues for poor countries. But the gap between the “haves” and “have-nots” will widen unless the “have-not” countries pursue policies that support application of new technologies—such as good governance, universal education, and market reforms.

Those countries that pursue such policies could leapfrog stages of development, skipping over phases that other high-tech leaders such as the United States and Europe had to traverse in order to advance. China and India are well positioned to become technology leaders, and even the poorest countries will be able to leverage prolific, cheap technologies to fuel—although at a slower rate—their own development.

* The expected next revolution in high technology involving the convergence of nano-, bio-, information and materials technology could further bolster China and India’s prospects. Both countries are investing in basic research in these fields and are well placed to be leaders in a number of key fields. Europe risks slipping behind Asia in some of these technologies. The United States is still in a position to retain its overall lead, although it must increasingly compete with Asia to retain its edge and may lose significant ground in some sectors.

More firms will become global, and those operating in the global arena will be more diverse, both in size and origin, more Asian and less Western in orientation. Such corporations, encompassing the current, large multinationals, will be increasingly outside the control of any one state and will be key agents of change in dispersing technology widely, further integrating the world economy, and promoting economic progress in the developing world. Their ranks will include a growing number based in such countries as China, India, or Brazil. While North America, Japan, and Europe might collectively continue to dominate international political and financial institutions, globalization will take on an increasingly non-Western character. By 2020, globalization could be equated in the popular mind with a rising Asia, replacing its current association with Americanization.

An expanding global economy will increase demand for many raw materials, such as oil. Total energy consumed probably will rise by about 50 percent in the next two decades compared to a 34 percent expansion from 1980-2000, with a greater share provided by petroleum. Most experts assess that with substantial investment in new capacity, overall energy supplies will be sufficient to meet global demands. But on the supply side, many of the areas—the Caspian Sea, Venezuela, and West Africa—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.

* China, India, and other developing countries’ growing energy needs suggest a growing preoccupation with energy, shaping their foreign policies.

* For Europe, an increasing preference for natural gas may reinforce regional relationships—such as with Russia or North Africa—given the interdependence of pipeline delivery.

February 28, 2006 at 11:46 AM in World affairs | Permalink | Top of page | Blog Home