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The World in 2050

24 May 2011

The World in 2050

by Gwynne Dyer

The economists, the statisticians and the investment bankers have done their work, and everybody in the financial world now has more or less the same picture of the future in their minds. The predictions are so consistent that even the general public thinks it knows where the trends are leading us: Asia and Latin America up, Europe and North America in a holding pattern, Africa and the Middle East down. But maybe the predictions are wrong.

Goldman Sachs started the game almost a decade ago with its study predicting that the BRICs, the four largest emerging economies (Brazil, Russia, India and China), would overtake the rich countries of the G7 (the United States, Japan, Germany, Britain, France, Italy and Canada) some time in the 2030s. The world’s economic centre of gravity, the study implied, was shifting from the West to Asia.

Hardly anybody disputes this model any more; the pundits just differ on the details, like when China’s economy will pass that of the United States. As soon as 2020, said PricewaterhouseCooper. 2027, says the latest Goldman Sachs prediction. 2035, says the Carnegie Institute. As late as the mid-2040s, according to Karen Ward’s recent study for HSBC. But they all agree it’s going to happen.

Ward’s study, “The World in 2050,” is particularly interesting for two reasons. One, because it is more realistic about China, whose economy is currently the biggest bubble in world history. And two, because it offers predictions for the world’s 30 biggest economies, not just the top ten.

China’s economy, at $25 trillion annually, is only a couple of trillion ahead of the United States in 2050. (All calculations are in constant dollars of the year 2000.) Then there is a long drop to India at $8 trillion and Japan at $6 trillion – and no other country reaches $5 trillion.

Places five to eleven are mostly filled by the rest of the G7 countries, with only Brazil and Mexico breaking into the magic circle. The rest of the Top Twenty, however, are almost all developing countries (Turkey, South Korea, Russia, Indonesia, Argentina, Egypt and Malaysia), with only Spain and Australia from the developed world. So in this model, Asia and Latin America really are taking over, with eleven out of the top twenty slots.

Now, you can quibble with bits of this, like categorising Russia as an emerging economy. In terms of infrastructure, average education level and birth rate, Russia is clearly a developed country. But if these predictions are roughly correct, then it is definitely Asia and Latin America up, and Europe and North America (plus Japan) in a holding pattern.
And are Africa and the Middle East really down? Up and down are purely relative, of course, and there are certainly some large African countries with quite respectable projected growth rates, like Nigeria and South Africa. But despite the world’s highest population growth rates, no African country’s economy makes it into the Top Twenty by 2050.

Of the Middle Eastern countries only Egypt scrapes in at No. 19, just ahead of Malaysia (which has only a third of Egypt’s population). Most of the non-oil economies face virtual stagnation, and there are big question marks over the claimed oil reserves of a number of the oil states. Africa and the Middle East down.

It’s only a game: only the very brave or the very foolish would base major investment decisions on such a long-term extrapolation of current trends. But it’s the sort of thing that the strategists and the geopolitics experts love – and it could be wrong. Not just wrong in detail, but utterly, spectacularly wrong.

All of these predictions assume that global conditions will remain essentially unchanged for the next forty years. That is highly unlikely.

The predictions are not simple-minded straight-line extrapolations. They all assume, for example, that China’s economy, which has grown at ten percent for the past twenty years (and therefore doubled in size every seven years), will drop to about half that growth rate (doubling only every fourteen years) well before 2050. But they do assume that energy – especially oil – will remain plentiful and relatively affordable for the next forty years.

Even more implausibly, they also assume that global warming will not cause serious disruptions in the world’s economies over the next two generations. Yet there is already enough warming locked into the system by past, present and near-future emissions that severe disruption is virtually guaranteed, especially in the tropical and sub-tropical parts of the planet.

The old-rich countries of the G7 are all in the temperate zone, which may get away with relatively minor damage from global warming in the period to 2050. All the big “emerging” economies except Russia and Argentina are located wholly or largely in the tropics and/or the sub-tropics. That means they will almost certainly suffer very serious disruption, including huge losses in food production.

This is monstrously unfair. Just when the poorer countries finally start to catch up economically with their former imperial masters, the warming caused by two centuries of greenhouse gas emissions by the rich countries knocks them back yet again. Which may also knock all those predictions that the emerging economies will soon overtake the developed ones into a cocked hat.
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To shorten to 725 words, omit paragraphs 7, 8 and 9. (“Now…down”)

Gwynne Dyer is a London-based independent journalist whose articles are published in 45 countries.

2009 Year-Ender

29 December 2009

2009 Year-Ender

By Gwynne Dyer

The year 2009 was most notable for the three bad things that didn’t happen. Firstly, the financial melt-down of late 2008 did not plunge us all into a 1930s-style depression, although there were plenty of pundits predicting that less than a year ago.

As Stephen Schwarzman, head of the private equity company Blackstone Group, said last March: “Between 40 and 45 percent of the world’s wealth has been destroyed in little more than a year and a half.” But all he was really saying was that a very specific kind of financial bubble has burst. All the land and houses are still there, and so are most of the factories and jobs.

There has certainly been a deep recession in the developed countries, and the current slow recovery may be a false dawn: a “double-dip” recession is still entirely possible. Moreover, the vast amounts of money spent by Western governments to save the banks has left them with a staggering burden of debt. But the worst has been avoided, and in the developing countries there was scarcely even a recession.

The second predicted disaster that did not come to pass was a killer global pandemic like the 1918 strain of influenza. Something of that order is probably still lying in wait for us down the road, but the swine flu turned out to be much less lethal than was initially feared. Considerable credit should go to those who made a vaccine available much faster than was thought possible, but basically we just got lucky.

And the third bad thing that didn’t happen? The same bad thing that hasn’t happened every year since 2001. There was no mass loss of life (by which I mean more than a thousand people murdered in a single incident) due to terrorist action in any Western country.

Even a relatively large death toll like that should not be a reason for any government to go berserk and start invading foreign countries. A thousand people is a lot to lose, but it really isn’t the end of the world. A thousand people die of natural and accidental causes in the United States (to pick a country not entirely at random) about every three hours. Terrorism is different, of course, but a rational and measured response is still required.

You know very well that it would be neither rational nor measured. Although an over-reaction is precisely what the terrorists are seeking to provoke, domestic political realities in the target country still make it likely that the response would be hugely stupid and violent. So we go from year to year waiting for the terrorists to succeed again on the scale of 9/11, knowing that Western countries will go crazy again if they do. But it didn’t happen in 2009.

What did finally happen at the beginning of 2009 was the long-overdue departure of the Bush administration. Almost everybody outside the United States, and many people within it, were profoundly relieved by that, but it imposed a huge burden of expectation on the shoulders of his successor as president, Barack Obama.

It has been a difficult first year for Obama, who presumably expected to have both his healthcare reforms and a climate change bill through Congress by now. His problems with Afghanistan, however, are largely of his own making.

Calling Afghanistan the “good war” (in contrast to Iraq) during the election campaign was a useful tactic to deflect accusations that he was too peace-loving, but now he’s stuck with it. He has already ordered a doubling of US troop numbers in Afghanistan, and he is now on a very slippery slope. This war is unwinnable, and it could destroy him politically.

In the meantime, Obama does small but useful things that do not require Congressional assent, like cancelling the Bush plan to put a missile defence system into eastern Europe. Or at least that do not need Congressional assent in advance, like a new and better Strategic Arms Reduction Treaty with Russia (although that is still being negotiated). He even tried to launch a new Middle East peace initiative, although that was doomed from the start.

The Middle East, with only a tenth of the world’s people, continued to generate more than its fair share of the news. The Israeli punishment attacks on the Gaza Strip that began on 27 December, 2008 continued through most of January, leaving over 1,300 Palestinians dead. More than half of them, according to all estimates except the Israeli military’s own, were civilians. Israeli fatalities from all causes, including friendly fire, were thirteen.

The Israeli election in February delivered Binyamin Netanyahu, the leader who had buried the Oslo accords in the late 1990s, back into the prime minister’s office, and any remaining hope for an Israeli-Palestinian peace deal evaporated. Netanyahu is politically dependent on right-wing Jewish settlers in the occupied territories, and would be most unlikely to compromise on their demands even if he were personally so inclined (which he is not).

So the twenty-five-year dream of a “two-state” solution gradually fades, and the prospect of a third intifada grows. It didn’t happen this year, and it probably won’t happen next year either. But the Israeli military occupation has entered its fifth decade, and another generation of Palestinians is growing up so full of rage that they will confront Israeli power despite the obvious fact that they cannot win.

At the other end of the Middle East, Iran was hardly ever out of the news in 2009. The old question of whether or not it is seeking nuclear weapons stayed high on the international agenda, but it was overtaken by the new question of whether the present leadership could stay in power. President Mahmoud Ahmedinejad’s implausibly high level of voter support in the June election ignited protests that have shaken the regime’s hold on power.

If it is a revolution, it’s a very slow-motion one: the protesters are not out on the streets every day, or even every month. Most of them do not even want to overthrow the Islamic system; just to reform it. But they keep coming out, most recently just this week, and they are not deterred by mass arrests and systematic rape of detainees, nor by Revolutionary Guards shooting to kill in the streets.

This is the way that the Shah was overthrown: by slow degrees, over a period of many months. It may not end the same way this time, but it looks like the same pattern – and the best thing everybody else can do is not to meddle. Iranian protesters do not need foreign support, and they certainly do not need foreign trade sanctions to be applied right now, because that makes them look like foreigners’ puppets.

In Iraq Prime Minister Nouri al-Maliki emerged as a genuine strongman, centralising power in his own office, staffed by his own party and clan. In Afghanistan another American nominee, President Hamid Karzai, embarrassed his patrons by rigging his re-election last August too blatantly, but they had to accept him in the end. And in Fantasyland-on-the-Gulf, aka Dubai, they could not make interest payments on some $50 billion in loans until Abu Dhabi bailed them out.

Europe had a quieter year (as it generally does). Chancellor Angela Merkel of Germany swept back into a second term in September with a “dream coalition” that freed her from having to compromise with the left. France became the largest economy to impose a carbon tax on individuals and businesses using coal, gas or oil, with the explicit intention of changing people’s patterns of energy use. The tax is seventeen euros (US$24) per tonne of emissions now, but it will rise over the years.

Italian Prime Minister Silvio Berlusconi had a miserable year, being accused (probably correctly) of consorting with minors and with high-class prostitutes, sued for divorce by his wife, and struck in the face by a model of Milan cathedral. More seriously, an Italian court struck down the umpteenth law he had pushed through parliament to allow him to escape prosecution for corruption. But he would win another election today. Italian voters are very tolerant, or something.

At one extremity of Europe, Northern Ireland was threatened with a slide back into chronic violence, as radical Catholic groups who reject the IRA’s commitment to power-sharing tried to lure the Protestants and the British army back into the fight by committing random acts of terrorism. At the continent’s other extremity, the Georgian government was found guilty of starting last year’s war with Russia by an investigating commission of the European Union

The EU as a whole finally ratified the Treaty of Lisbon, which streamlines the operation of the organisation to cope with a membership that has now expanded to 27 countries. It took eight years, two Irish referendums (they got the answer wrong the first time), and some face-saving concessions to the Czech president to get it through. The EU, it would appear, is still not ready for prime time.

The principal political events in Asia were the Indian election in May, which gave the ruling Congress Party a resounding vote of confidence, and the August election in Japan, which brought the opposition Democratic party to power after 52 years of almost uninterrupted rule by the Liberal Democratic Party. But there was almost no connection between these two elections in anybody’s mind: Asia is still little more than a geographical expression.

Elsewhere in Asia, the most important military events were the Sri Lankan government’s decisive victory over the Tamil Tiger insurgency in May, which brought a 26-year civil war to an end, and the North Korean nuclear weapons test in the same month. The North Korean regime was mainly using the test as a way to blackmail the major powers into guaranteeing its future, and those powers are playing along as usual. They have no choice.

Thailand is caught up in a deepening struggle between the poor majority and the old royalist anti-democratic elites, incarnated in the recurrent street clashes between the Red Shirts and the Yellow Shirts. In Burma, pro-democracy leader Aung Sang Suu Kyi, though still under house arrest, has supported efforts by the United States to open up channels of communication with the military junta. A military mutiny was successfully put down in Bangladesh in February.

In Pakistan in December, an amnesty for corruption charges that had protected hundreds of politicians including Prime Minister Asif Ali Zardari was overruled by the Supreme Court, and the country was plunged into fresh political turmoil. The Maldives held a full cabinet meeting underwater in scuba gear to dramatise the threat posed to the low-lying island country by rising sea levels. The Nepalese cabinet, not to be outdone, held a meeting on the slopes of Mount Everest to dramatise the threat posed to the country by melting glaciers.

China’s emergence as a world player continued, with attention focussed in particular on its expanding investments in Africa. The ex-imperial powers saw this as neo-imperialism, but the ex-colonies themselves mostly took a different view. They understood that China was trying to secure long-term supplies of food, fuel and minerals for a future in which it believed that all those commodities would be scarcer, but at least the Chinese paid well and didn’t subject their suppliers to hypocritical lectures on human rights.

A blow-by-blow list of all the things that went wrong in Africa in 2009 is depressing: a military massacre in Guinea, a coup in Madagascar, blood-drenched anarchy in Somalia, mini-wars between the police and extreme religious sects in northern Nigeria, and much more in the same vein. But it feels less hopeless if you recall that most of Africa’s 52 countries are at peace – and that African economies have been growing at an average of five percent a year since 2000, compared to only one percent in the previous decades since independence.

Much the same observation applies, in a minor key, to Latin America. What little news makes it out of the continent tends to be bad: the brutal war between the state and the drug cartels in Mexico, the alleged threat of war between Venezuela and Colombia, the messy sort-of-coup in Honduras, and so on. But most of the region is at peace, more or less democratic, and even making progress economically. Which may explain why it exports so little news.

Finally, Copenhagen. The vast, 192-country conference on climate change in December was a total failure in terms of its declared objectives. There is no new treaty to replace the Kyoto accord. Even modest Kyoto-style national targets for cutting greenhouse gas emissions were omitted from the vague declaration that was cobbled together by the two biggest emitters, the United States and China, on the last day. Neither are there any deadlines for further action.

“The Chinese hate numbers,” as one participant put it – and the United States was quite happy to let China get the blame for killing a deal that Washington couldn’t have delivered on either. The problem is that nobody really knows where we go from here, and time is running short. If there is one thing that 2009 is remembered for, it may be for the historic failure at Copenhagen.

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This article is 2200 words. It’s written in modular form, for the most part, and you’re free to cut it wherever you want. If you need to write something to bridge the gap where you cut, just do it. Experience has taught me that people’s news priorities in different parts of the world are so different that it makes no sense for me to try to do the job.

Not the Noughties

27 December 2009

Not the Noughties

By Gwynne Dyer

Decades don’t usually have the courtesy to begin and end on the right year. The social and cultural revolution that Western countries think of when they talk of the “Sixties” only got underway in 1962-63, and didn’t end until the Middle East war and oil embargo of 1973-74. But this one has been quite neat: the “Noughties” began with the Islamist terrorist attacks on the United States in 2001, and they ended with a global financial melt-down in the past year.

The “Noughties” is just a recent journalistic invention to make it easier to write end-of-the-decade articles like this. The term was launched several times in the last ten years, but it never took off. Just as well, really, because it sounds a bit frivolous – whereas this was actually a decade when the tectonic plates moved into a new pattern.

Never mind the terrorism. About half a billion people died during the past decade, and fewer than fifty thousand of them were victims of terrorism – say, one in every ten thousand deaths. At least forty thousand of those fifty thousand victims of terrorism lived in India, Pakistan or Iraq, and fewer than four thousand lived in the West. You can hardly make that a defining quality of the decade.

The terrorist threat to the West was minor, but the West’s hugely disproportionate and ill-considered response was a key factor in the great shift that defines the decade. The “War on Terror,” the invasion of Afghanistan and Iraq and all the rest, did not deter a Muslim Nigerian student from trying to blow up an airliner over Detroit last Saturday. It motivated him to do so. But it also accelerated the rise of Asia and the relative decline of the West.

That shift was happening anyway. When China and India, with forty percent of the world’s population between them, are growing economically three to four times as fast as the major Western countries, it’s only a matter of time until they catch up with the older industrial economies.

Back in 2003, however, the researchers at Goldman Sachs predicted that the Chinese economy would surpass that of the United States by the mid-2040s. By the middle of this year, they were predicting that it would happen in the mid-2020s – and this year, for the first time, China built more cars than the United States. That acceleration is in large part a consequence of the huge diversion of Western attention and resources that was caused by the “War on Terror.”

Prestige is a quality that cannot be measured or quantified, but a reputation for competence in the use of power is a great asset in international affairs. After the centuries-old European empires wasted their wealth and the lives of tens of millions of their citizens in two “world wars” in only thirty years, their empires just melted away. Nobody was in awe of them any more, and they lacked the resources to hold onto their overseas possessions by force.

Something similar has happened over the past decade to the United States. Unwinnable wars fought for the wrong reasons always hurt a great power’s reputation, and wars fought amidst needless tax cuts, burgeoning deficits and financial anarchy are even more damaging if the country’s power depends heavily on a global financial empire.

The United States spent the past decade cutting its own throat financially, ending with the near-death experience of the 2008-2009 financial meltdown. The Europeans made all the same mistakes, only more timidly, and the Japanese sat the decade out on the sidelines, mired in a seemingly endless recession. The old order is passing, the US dollar is on its way out as the only global currency, and the real power is shifting to mainland Asia.

Or is it? There are two trends that could slow or even stop this shift. They seemed quite distant at the start of the decade, but now they look very big and frightening. One is peak oil; the other is global warming.

In Europe, North America and Japan, energy consumption is growing slowly or not at all, and it is relatively cheap and easy to reduce dependence on imported oil. Just the fuel efficiency standards already mandated by the Obama administration could reduce American oil imports by half by 2020. Whereas Chinese and Indian dependence on imported oil is soaring. So is their use of coal.

That’s unfortunate, because for purely geographical reasons these countries are far more vulnerable to high temperatures than the older industrial nations. At even two degrees C (3.6 degrees F) higher average global temperature, they face floods, droughts and storms on a massive scale, probably accompanied by a steep fall in food production. That sort of thing could abort even the Chinese and Indian economic miracles.

So we’re back in the old world where the future is uncertain. Of course. What else did you expect? We can only observe the trends, and try to remember that they are always contingent. But at the moment, it looks like the decade when the West finally lost its domination over the world’s economy.

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To shorten to 725 words, omit paragraphs 2 and 3. (“The Noughties…decade”)

Gwynne Dyer is a London-based independent journalist whose articles are published in 45 countries.

Lifeboat Japan

5 December 2009

Lifeboat Japan

By Gwynne Dyer

Japan is a lucky country. When the global average temperature has gone up by 2 degrees Celsius
and most of mainland Asia is ravaged by famines, when civil wars and failed states and waves of climate
refugees are the norm from Tehran to Hanoi and from Madras to Beijing, Japan will still be at peace
and eating regularly.

However, the desperate people of the rest of Asia will all know that Japan is among the industrialised
countries that created the disaster with their greenhouse gas emissions, and that it has nevertheless
largely escaped the consequences of its actions. Maybe they will be in a forgiving mood, but maybe not.

This is an extreme scenario, and it may never happen. If the climate summit that opened in
Copenhagen on Monday agrees on early, deep cuts in greenhouse gas emissions worldwide,
global warming may never reach plus two degrees.

Few people believe that the Copenhagen conference will produce a treaty that adequately addresses
the reality of climate change, but more serious measures will doubtless follow a few years later, so
let’s be optimistic. Let us suppose that global heating is halted before we reach the two-degree level,
and that the warming never goes runaway.

Even then, the average global temperature will still rise by at least one-and-a-half degrees. The
greenhouse gases to produce that effect are already in the atmosphere or will be put there in the
next ten years, before we can hope to cut our emissions radically enough. They won’t produce
their full heating effect right away, but it will arrive in due course.

No matter what we do from now on, the amount of greenhouse gases that we have put into the
atmosphere will eventually raise average global temperature by 1.5 degrees, and average temperatures
over land by more like 2.5 degrees. The main impact of that will be on the food supply.

In the tropics, the heat itself will be the main problem: rice yields fall drastically, for example, if the
temperature is above 35 degrees during the critical fertilization period. In the sub-tropics, drought
will be the crop-killer, as the rainfall shifts further away from the equator. Even the rain that does
fall is likely to evaporate again from the hot soil rather than soaking in.

The closer a country is to the equator, the worse will be its plight. A few countries in the high
latitudes like Russia and Canada will still be exporting grain, but most of today’s major grain exporters
will be out of the business (Australia is already on the way out).

The world grain supply is already tight. Assume a 15 percent loss of global food production and
a billion more people by 2030, and we can expect recurring famines in the tropics and the
sub-tropics – famines that cannot be averted by importing grain, because there is not enough left on
the international market. South and South-East Asian countries would suffer greatly, but China would not
escape either, even though most of it lies in the temperate zone.

Once the glaciers up on the Tibetan plateau have melted, the great glacier-fed rivers of south and
central China will be half-empty in the summer. The north-eastern monsoon that waters the wheat
crop of northern China is already failing. And the low-lying river deltas along the east coast where
so much of China’s food is grown face repeated inundation by storm tides as the sea level rises.

Hungry people move, across borders if necessary, and people in less afflicted countries may use
force to stop them. Regimes that cannot feed their people tend to collapse: failed states and civil wars
will multiply. There may even be regional wars between countries that share the same river system,
as access to water becomes a life-or-death matter.

Amidst this pan-Asian chaos and misery, Japan would be an island of order and prosperity. Not
only is it well within the temperate zone, but the seas that surround it would keep the average temperature
down. With a maximum effort, it could probably just about feed the 100 million people who live in Japan
in 2030 from its own resources. Lucky Japan.

Britain is lucky in much the same way as Japan. It has a geographical position that will keep the heat
down and the rain reliable; it has enough land to feed its own people, if only just; and it is an island,
which makes it easy to keep the refugees out. In strategic circles in Britain, one now sometimes hears
the phrase “Lifeboat Britain.” The same phrase applies to Japan – and lifeboats often cannot afford to
take everybody aboard.

But the rest of Asia will know that Japan, the first industrialised country in the continent, bears
a heavy responsibility for the disasters they are currently suffering because of its past emissions.
They will see Japan itself escaping the consequences, and find it unfair. As they watch their own
hopes for the future disappear, they may become very angry about it.

Some of this future may be avoided if there is early and effective action to reduce and eventually
eliminate greenhouse gas emissions. But it would have to be very radical action, very soon – and
some of disasters would still happen. For Japan, climate change will become a security issue.
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Gwynne Dyer is currently in Japan promoting the Japanese version of his new book, “Climate Wars,”
published by Shinchosha.