Riches and risk: Welcome to the world of tomorrow

The season of goodwill has made way for the new year torrent of predictions. Most are quickly forgotten — mercifully so, given the hit rate of the commentariat. Today’s world spins too quickly for the sharpest crystal-ball gazer. A better way of looking at what lies ahead is to chart some of the underlying forces shaping the global landscape. The outline that emerges is one of rising prosperity and opportunity and of diminishing security.

For all the gloomsters, the world is still getting richer. Europe may be wrapped up in the euro crisis and the US in political gridlock — and the withdrawal of its unprecedented monetary stimulus will doubtless cause problems elsewhere. Yet, the story remains one in which steadily rising global output is transforming the life chances of billions of people. There are as many opportunities for the West as for the rest.

The redistribution of economic power to rising nations presages another fundamental shift. Within a couple of decades, a world that is still predominantly poor will be mostly middle class. Mexico, Indonesia, Vietnam, Brazil, Turkey and others now have a firm place in a narrative that was once about China and India. Investors are discovering Africa in much the same way as they once did Asia and Latin America. By 2020 or so, another one billion consumers may join the ranks of middle classes in these economies.

The march of the global middle class points to the second of the megatrends: The rising demand in emerging economies for accountable government. Subjects are asking to be treated as citizens. Optimism about democracy may seem counter-intuitive, given the way events in Syria, Egypt, Libya and Iraq have mocked the idea of an Arab Spring. China’s resilience in the face of global economic turbulence likewise offers succour to those who proclaim the merits of an alternative model.

Egypt aside, military coups have just about gone out of fashion. Parts of Africa are witnessing peaceful constitutional transitions and Latin America has begun shaking off left-wing populism. Surely, it is instructive that there is no one more fearful than the Chinese leadership of the political and social upheaval promised by growing affluence.

The third of the megatrends is worrying or welcome depending on where you stand. The US is stepping back from the global responsibilities it assumed after the collapse of the Soviet Union. American power is increasingly contested, so the “hyperpuissance” of recent French nightmare is now a mere superpower.

There is nothing to replace the Pax Americana. Instead, the neat symmetry of the Cold War and the brief interlude of unipolarity are being replaced by a fragmented mosaic of global power.

Circumstance and choice have eroded America’s capacity and willingness to act as guarantor of the global commons. The circumstance comes in the form of the challenge to US hegemony from the rise of China and others and in the costly lessons learnt in Iraq and Afghanistan. The choice has arrived in the form of war weariness, budget constraints and approaching self-sufficiency in energy. All have damped America’s enthusiasm for solving other people’s problems.

The lesson of Syria is that, as a selective superpower, the US applies a tougher national-interest test before committing blood and treasure to foreign adventures. The effect has already been felt in capitals around the world, where allies as well as adversaries question Washington’s resolve to safeguard the status quo against the claims of over-assertive rising powers.

A consequence of this — the fourth of the megatrends — is the progressive erosion of the postwar global system. Geo-economics and geopolitics are striking out in different directions. The first presumes greater cohesion, while the second witnesses a splintering of the old security order. Economic integration continues apace as ties spanning advanced and rising economies are overlaid with expanding trade and investment between emerging nations. More than half of Asia’s trade is now with Asia. Yet, on the geopolitical side of the coin, there is precious little appetite for more global governance.

The US no longer sees the happy coincidence of its national and the wider international interest that provided the spur for construction of the postwar order. Europe has given up on the idea that its unique model of integration can be exported beyond its own region. As for the emerging powers, most are wedded to a view of national sovereignty that defies the realities of interdependence.

War in the Middle East, tension in the East and South China seas, climate change and resource sources — the pressures for conflict in this more disordered world are there for all to see. Which leaves the big question: How will China behave? The signs are that Beijing sees the fragmentation of global security as the opportunity for expansionism. Yet, during this, the centenary year of the First World War that ended the first great era of globalisation, it must also know the perils of overreach.

— Financial Times