The Future, Declassified. Mathew Burrows, 2014

 

mathew burrows

A member of the European Parliament went on to describe how Internet has ruined her life. Constituents were overly demanding and relentless; it had become a 24/7 world where longer term goals could no longer be worked on. It was clearly a trend. Everyone agreed that individual empowerment was the number one megatrend and the right starting for looking at the future. However, more and more voices sounded the alarm. Individual empowerment comes at a high risk. Ethnic affinity is a reality of life, but can be politicised and become a weapon for conflict. Populism that’s anti-market, anti-welfare, anti-government is on the rise. Growing fragmentation comes with individual empowerment.

Over the next couple of decades, a majority of the world’s population won’t be impoverished, and the middle class will be the most important social and economic sector – not in the West but in the vast majority of countries around the world.

2015 is the first time in three hundred years in which the number of Asian middle class consumer will equal the number in Europe and North America. China could become the largest single middle class market in 2010. But China might be overtaken by India in the following decade thanks to the country’s more rapid population growth and more even income distribution. Much of this global middle class will be lower middle class by Western standards. The top half of this new middle class – likely to be more in line with Western standards – will be substantial, rising from 350 millions in 2010 to 679 millions in 2030.

Poverty won’t disappear, and the fear of slipping back is likely to haunt many in the new middle class.

Today about 1 billion people are living in extreme poverty (less than $1.25 a day) and 1 billion are undernourished. The number of those living in extreme poverty has been stable for a long time, but the rate has been declining with population growth. Absent a global recension, the number of poor could drop by 50% by 2030 as incomes continue to rise in most part of the world but could still remain substantial – nearly 300 million in Africa alone.

Under any scenario, there will still be plenty of poor people: the problem may be harder to solve because many of these people are concentrated in countries with few inherent sources of economic opportunities.

AIDS appears to have hit its global peak – around 2.3 million deaths per year – in 2004.

The main symbol of the new middle class (in Brazil) has been the explosion in formal employment – workers with a formal employment contract rather than a cash-only arrangement. During the 2000s, formal job creation outpaced informal job growth by a 3 to 1 ratio. People were not only consuming but investing in their future. The growth rate in education was very high.

Slower economic growth in the West will ingrain the perception of a struggling middle class that faces greater competition from an increasingly global employment market, including competition for job requiring higher skills.

Some estimates (ADB) see middle class consumption in North America and Europe only rising by 0.6% a year over the next couple of decades. In contrast, spending by middle class Asian consumers could rise 9% a year through 2030.

Samuel Huntington has talked about the middle class that tends to be born revolutionary and become conservative by middle age. Middle classes are defenders of social and political order, but only if it serves their interest. In this day and age, that means the state must provide good public services. In Brazil, there was a growing resentment because the middle class did not see their taxes translated into better services, especially in health and education.

Senior UAE officials told us of their worries about satisfying growing expectations for democratic rights despite the high standard of living. They worry that western NGOs interested in advancing democratic and human rights could prey on this sense of public dissatisfaction with the lack of rights and increase the level of political discontent. They also see religious extremism as a symptom of growing dissatisfaction and link any outside effort to bolster democracy and human right groups as helping religious extremists.

China is slated to pass the threshold of US$15.000 per capita in the next five year or so. The US$15.000 per capita is often a trigger for democratisation, especially when coupled with high level of education and a mature age structure.

Democracy is a goal for many Chinese, including, oddly enough, some in the Communist party. The Party School has held conferences on democracy. It is not a matter of if, but when. The problem is that no one had an idea of how to undertake political reform without major disruption or disorder. Individuals will be ‘more important’ in determining the future. At the same time, the rising middle class is seen as a ‘destabilising factor’ in rich countries as well in developing countries .In China, new problems have been created, with growing demands and higher expectations of government.

The economics of globalisation have spread the West’ ideas of scientific reason, individualism, secular government, and primacy of law to societies seeking the west’s material progress. But many citizens in these states are reluctant to sacrifice their cultural identities. Religion is likely to be at the center of these ideological debates within and across societies. Islam especially has strengthened owing to global increases in democratisation and political freedoms that have allowed religious voices to be heard, and owing as well to advanced communications technologies and the failure of governments to deliver services that religious groups can provide. A 2013 Pew poll underlines the overlap between the strong belief in democracy and the desire by Muslim publics for religion to play a prominent role in politics. A large number of Muslims across the world say religious leaders should have influence over political matters.

Nationalism is another force that is intensifying particularly in regions where there are unresolved territorial disputes and countries’ fortunes may be rapidly changing. Pew’s research showed that beliefs in moral and cultural superiority are strongly held everywhere. This sentiment is particularly strong in developing countries. Fully 9 in 10 in Indonesia and South Korea and more than 8 in 10 in India are strong boosters of their own culture.

The move to the city is leading to increased expression of religious identity. Immigrants – mostly Muslims in Europe and Russia for example – are coalescing along religious lines. Urbanisation is driving demands for social services provided by religious organisations. Islamic and Christian activists have been effective in using this to bolster cohesion and leverage.

2012 European Union study on the global middle class showed that around four in every five people worldwide believe that democracy is the best available system of government.

From 2000 to 2012 BRICS grew on average by 6.2% a year. This won’t happen again as BRICS did not push ahead with structural reforms. The recession in the west affected the developing countries which still look the West as trade and investment partners.

There is no longer a country or a group of countries like the G7 that have the political and economic leverage to drive the international community toward collective actions. This adds up to global cooperation being difficult to forge in the best of times and breakdown becoming increasingly likely.

The BRICS are so diverse – some autocratic, other firmly democratic – and have so many competing interests that they are highly unlikely now or in the future to share a unified vision.

Doctor Watson is the IBM robot that beat two human champion to Jeopardy in 2011… To keep up with the state of the medical literature would take a human 180 hours a week according to one estimate – an impossible feat. However, it’s child’s play for a superendowed robot. Watson provides doctors recommendations for treatment based on its surveying of all the available literature and what is in the patient file.

The rapid growth of Asian and African minority in low fertility West Europe states risks increasing erosion of social cohesion and growing reactionary politics.

Soon a lot more things will be connected to the internet; some estimates place the current figure at over 15 billion internet connected objects – the Internet of Things-, everything from smartphone, PCs to sensors monitoring agriculture production, city functions, medical devices, forests and individual trees.

In general, the countries most vulnerable to food inflation will be import dependent poor countries, the primary line of defence to cope with rising food prices will be to expand existing subsidies on basic foodstuff. This is difficult proposition, especially as many of these countries are waging a battle against ballooning budgets.

The amount of land that was acquired between 2000 and 2010 equals an area eight times the size of UK.

The Fund for Peace’s failed state Index.

In late September 2013, millions in Dakar, Senegal, were left stranded without drinking water when a pipeline carrying water over 155 miles to the city residents burst. Their plight provides a taste of the possible scale of urban disruption if infrastructure is not kept in good repair.

The United States has more than enough natural gas for domestic needs for decades to come, and potentially substantial exports. With the new super fracking technologies, recovery rate could dramatically increase.

The IEA see renewables becoming the second largest source of electricity before 2015, approaching coal as primary source by 2035, but 2/3 of the increase in power generation from renewables [will be] in non-OECD countries…the increase in China will be more than that in the EU, US and Japan combined.

Butterfly Solar Farms in Botswana that had simple in-field assembly and panels with double efficiency of normal ones. It could be used for desalinisation systems, for crop drying, and to power freezers in slaughterhouse of dairy farms.

These good ideas (energy saving ideas) need some sort of government help. Poor countries won’t be able to manage it. They are not only coming from behind – not having adequate infrastructures to begin with – but they also face the greatest challenges going forward, including rapid population growth, deleterious climate change, and environmental devastation that hits food and water supplies. For them, without assistance, the future does look Malthusian.

Four game changers stand out for me: a China that can’t manage the next development leap, the growing possibility of war, possible runaway technology and a United States that can’t stay on top of an increasingly complex world.

The bigger question may be whether China wants to rewrite the current rules for how the international system operates. Although ambivalent and even resentful of the US-led international order, I don’t think Chinese leaders have a vision for a new international order. Along with other emerging powers, they are eager for a greater say in the running of the global institutions like the UN or the IMF.