Newcomers drive for new world order

Published Mar 17, 2013

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“Mountains” describes a world of relative stability, in which the world’s governments and multi-lateral institutions embark on a series of measured political, financial and economic reforms.

Although restrained, the reforms are sufficient to ensure that government institutions survive, and evolve gradually over time.

Popular pressures are relatively subdued.

Social stresses and discontent simmer under the surface, partly alleviated by the philanthropic endeavours of the wealthy.

Governments retain the authority and stability they need to implement firm and wide-ranging policies – a central feature of the “Mountains” scenario.

Sluggish economic growth is another defining feature of “Mountains”, especially in the 2020s and 2030s.

The piecemeal nature of economic reform holds back the advanced economies.

The Eurozone undergoes a period of prolonged stagnation, as political gridlock persists.

The US continues to be hampered by political polarisation over its fiscal arrangements.

It also experiences stagnating middle-class earnings and declining social mobility.

In industrialised countries, unemployment insecurity grows, as production becomes less labour intensive.

This triggers employment protectionism, as governments attempt to maintain stability.

The pace of globalisation is checked.

To offset creeping popular unease, governments act as a bulwark against global market-driven insecurity.

The emerging economies see growth plateau after a significant proportion of their populations reach the middle-income bracket, which also weakens social mobility.

Faster global economic growth resumes only in mid-century, when several large economies emerge from the so-called “middle-income trap”.

The economic crisis in the advanced economies accelerates the shift of geopolitical and economic influence from West to East.

And rising powers assert their interest against the established powers.

There’s a pervasive fear of imminent conflict, as countries engage in aggressive diplomacy.

The old multi-lateral institutions, established in the post-World War II era, weaken, as the rivalry between China and the US moves to centre-stage.

But the 2020s see a growing recognition of mutual interests between the US and China.

They form a de facto Group of Two (G2) to manage the global system.

There’s a further shift in the 2030s, with the rise of new powers, such as India, Turkey and Brazil, which creates the impetus for a new world order.

A core group of great powers emerges, echoing the Concert of Europe of the 19th and early 20th centuries.

Critically, this provides a new platform for international co-operation and addressing shared challenges, such as climate change.

The “Oceans” scenario depicts a more volatile and prosperous world.

The financial turbulence of the early 21st century unleashes an era of ambitious political, fiscal and legal reforms.

In many countries, this is driven by a frustrated and rapidly expanding middle class.

All of this results in a much more powerful economic recovery: international markets grow and prosper, and different sections of society realise their productive potential.

On average, GDP levels are considerably higher than in “Mountains”.

The emerging economies maintain strong growth in the 2020s and 2030s.

They avoid the middle income trap, moving to balanced growth.

As India and China become wealthier, they succeed in becoming more economically inclusive and allow more citizens to share in the rising prosperity.

There follows the rapid emergence of today’s less developed economies, such as Bangladesh.

The success of the emerging economies stimulates the advanced economies in the 2020s and 2030s. Europe, for example, enjoys something of a renaissance on the back of deep-rooted political reforms.

The fast pace of reform in many countries leads to rising expectations, as citizens expect continuous improvements in living standards and social welfare.

All this contributes to a much more assertive and vigorous civil society than in “Mountains”.

An expanding and empowered middle class throws up a succession of new leaders and interest groups, including a revitalised NGO sector.

In a crowded political playing field, achieving consensus on important issues is much harder.

The sheer strength of popular pressure leads to a rapid turnover of governments.

And cynicism about governments and big business is widespread, amplified by social media.

All this leaves governments on weaker ground than in “Mountains”, and constrains their ability to develop effective policies.

Globalisation develops apace, unfettered by protectionism.

This adds to the volatility, especially in the 2020s: many countries see clashes between popular movements and the wealthy minorities they perceive as the beneficiaries of globalisation.

The basis of international co-operation is even weaker than in “Mountains”.

The geopolitical order grows more complex, and global rules are hard to apply.

Large-scale, multi-lateral initiatives fall by the wayside. Instead, the world sees the emergence of “mini-lateralism” – the smallest possible number of nations needed to ensure the largest impact.

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