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We prepared Global Trends 2025: A Transformed World to stimulate strategicthinking about the future by identifying key trends, the factors that drive them, wherethey seem to be headed, and how they might interact. It uses scenarios to illustrate someof the many ways in which the drivers examined in the study (e.g., globalization,demography, the rise of new powers, the decay of international institutions, climatechange, and the geopolitics of energy) may interact to generate challenges andopportunities for future decisionmakers. The study as a whole is more a description ofthe factors likely to shape events than a prediction of what will actually happen.By examining a small number of variables that we judge probably will have adisproportionate influence on future events and possibilities, the study seeks to helpreaders to recognize signposts indicating where events are headed and to identifyopportunities for policy intervention to change or lock in the trajectories of specificdevelopments. Among the messages we hope to convey are: “If you like where eventsseem to be headed, you may want to take timely action to preserve their positivetrajectory. If you do not like where they appear to be going, you will have to develop andimplement policies to change their trajectory.” For example, the report’s examination ofthe transition out of dependence on fossil fuels illustrates how different trajectories willentail different consequences for specific countries. An even more important message isthat leadership matters, no trends are immutable, and that timely and well-informedintervention can decrease the likelihood and severity of negative developments andincrease the likelihood of positive ones.Global Trends 2025 is the fourth installment in the National Intelligence Councilledeffort to identify key drivers and developments likely to shape world events a decadeor more in the future. Both the product and the process used to produce it benefited fromlessons learned in previous iterations. Each edition of Global Trends has tapped largerand more diverse communities of experts. Our first effort, which looked out to 2010,relied primarily on expertise within the US Intelligence Community. There was someoutreach to other elements of the United States Government and the American academiccommunity. For Global Trends 2015, we engaged more numerous and more variedgroups of non-US Government experts, most of whom were American citizens.For the third iteration, Global Trends 2020, we greatly expanded the participationof non-American specialists by convening six seminars on five continents. We alsoincreased the number and varied the format of meetings in the United States. Thesesessions enhanced our understanding of both specific trends and drivers and the waysthese factors were perceived by experts in different regions of the world.

Chapter 6: Will the International System Be Up to the Challenges?Multipolarity without MultilateralismHow Many International Systems?A World of NetworksGlobal Scenario IV: Politics is Not Always LocalChapter 7: Power-Sharing in a Multipolar WorldDemand for US Leadership Likely to Remain Strong, Capacities Will ShrinkNew Relationships and Recalibrated Old PartnershipsLess Financial Margin of ErrorMore Limited Military SuperioritySurprises and Unintended ConsequencesLeadership Will Be Key808182848992939394979898ii

Textboxes:The 2025 Global LandscapeComparison Between Mapping the Global Future: Report of the IntelligenceCouncil’s 2020 Project and Global Trends 2025: A Transformed WorldLong-Range Projections: A Cautionary Tale 5Globalization at Risk with the 2008 Financial Crisis? 10Science and Technology Leadership: A Test for the Emerging Powers 13Latin America: Moderate Economic Growth, Continued Urban Violence 15Women as Agents of Geopolitical Change 16Higher Education Shaping the Global Landscape in 2025 17The Impact of HIV/AIDS 23Muslims in Western Europe 25Timing is Everything 44Winners and Losers in a Post-Petroleum World 46Technology Breakthroughs by 2025 47Two Climate Change Winners 52Strategic Implications of an Opening Arctic 53Sub-Saharan Africa: More Interactions with the World and More Troubled 56A Non-nuclear Korea? 62Middle East/North Africa: Economics Drives Change, but with Major Riskof TurmoilEnergy Security 66Another Use of Nuclear Weapons? 67Why al-Qa’ida’s “Terrorist Wave” Might Be Breaking UpThe Changing Character of Conflict 71End of Ideology? 73Potential Emergence of a Global Pandemic 75Greater Regionalism—Plus or Minus for Global Governance? 83Proliferating Identities and Growing Intolerance? 86Future of Democracy: Backsliding More Likely than Another Wave 87Anti-Americanism on the Wane? 95iv26569iii

The 2025 Global LandscapeRelative CertaintiesA global multipolar system is emergingwith the rise of China, India, and others.The relative power of nonstate actors—businesses, tribes, religiousorganizations, and even criminalnetworks—also will increase.The unprecedented shift in relativewealth and economic power roughlyfrom West to East now under way willcontinue.The United States will remain the singlemost powerful country but will be lessdominant.Continued economic growth—coupledwith 1.2 billion more people by 2025—will put pressure on energy, food, andwater resources.The number of countries with youthfulpopulations in the “arc of instability” 1will decrease, but the populations ofseveral youth-bulge states are projectedto remain on rapid growth trajectories.The potential for conflict will increaseowing to rapid changes in parts of thegreater Middle East and the spread oflethal capabilities.Terrorism is unlikely to disappear by2025, but its appeal could lessen ifeconomic growth continues in theMiddle East and youth unemployment isreduced. For those terrorists that areactive the diffusion of technologies willput dangerous capabilities within theirreach.Likely ImpactBy 2025 a single “international community”composed of nation-states will no longer exist.Power will be more dispersed with the newerplayers bringing new rules of the game while riskswill increase that the traditional Western allianceswill weaken. Rather than emulating Westernmodels of political and economic development,more countries may be attracted to China’salternative development model.As some countries become more invested in theireconomic well-being, incentives towardgeopolitical stability could increase. However, thetransfer is strengthening states like Russia that wantto challenge the Western order.Shrinking economic and military capabilities mayforce the US into a difficult set of tradeoffsbetween domestic versus foreign policy priorities.The pace of technological innovation will be key tooutcomes during this period. All currenttechnologies are inadequate for replacingtraditional energy architecture on the scale needed.Unless employment conditions change dramaticallyin parlous youth-bulge states such as Afghanistan,Nigeria, Pakistan, and Yemen, these countries willremain ripe for continued instability and statefailure.The need for the US to act as regional balancer inthe Middle East will increase, although otheroutside powers—Russia, China and India—willplay greater roles than today.Opportunities for mass-casualty terrorist attacksusing chemical, biological, or less likely, nuclearweapons will increase as technology diffuses andnuclear power (and possibly weapons) programsexpand. The practical and psychologicalconsequences of such attacks will intensify in anincreasingly globalized world.1 Countries with youthful age structures and rapidly growing populations mark a crescent or “arc of instability”stretching from the Andean region of Latin America across Sub-Saharan Africa, the Middle East and the Caucasus,and through the northern parts of South Asia.iv

Key UncertaintiesWhether an energy transition away fromoil and gas—supported by improvedenergy storage, biofuels, and cleancoal—is completed during the 2025time frame.How quickly climate change occurs andthe locations where its impact is mostpronounced.Whether mercantilism stages acomeback and global markets recede.Whether advances toward democracyoccur in China and Russia.Whether regional fears about a nucleararmedIran trigger an arms race andgreater militarization.Whether the greater Middle Eastbecomes more stable, especiallywhether Iraq stabilizes, and whether theArab-Israeli conflict is resolvedpeacefully.Whether Europe and Japan overcomeeconomic and social challenges causedor compounded by demography.Whether global powers work withmultilateral institutions to adapt theirstructure and performance to thetransformed geopolitical landscape.Potential ConsequencesWith high oil and gas prices, major exporters suchas Russia and Iran will substantially augment theirlevels of national power, with Russia’s GDPpotentially approaching that of the UK and France.A sustained plunge in prices, perhaps underpinnedby a fundamental switch to new energy sources,could trigger a long-term decline for producers asglobal and regional players.Climate change is likely to exacerbate resourcescarcities, particularly water scarcities.Descending into a world of resource nationalismincreases the risk of great power confrontations.Political pluralism seems less likely in Russia in theabsence of economic diversification. A growingmiddle class increases the chances of politicalliberalization and potentially greater nationalism inChina.Episodes of low-intensity conflict and terrorismtaking place under a nuclear umbrella could lead toan unintended escalation and broader conflict.Turbulence is likely to increase under mostscenarios. Revival of economic growth, a moreprosperous Iraq, and resolution of the Israeli-Palestinian dispute could engender some stability asthe region deals with a strengthening Iran andglobal transition away from oil and gas.Successful integration of Muslim minorities inEurope could expand the size of the productivework forces and avert social crisis. Lack of effortsby Europe and Japan to mitigate demographicchallenges could lead to long-term declines.Emerging powers show ambivalence toward globalinstitutions like the UN and IMF, but this couldchange as they become bigger players on the globalstage. Asian integration could lead to morepowerful regional institutions. NATO faces stiffchallenges in meeting growing out-of-arearesponsibilities with declining European militarycapabilities. Traditional alliances will weaken.v

Executive SummaryThe international system—as constructed following the Second World War—will be almostunrecognizable by 2025 owing to the rise of emerging powers, a globalizing economy, anhistoric transfer of relative wealth and economic power from West to East, and the growinginfluence of nonstate actors. By 2025, the international system will be a global multipolar onewith gaps in national power 2 continuing to narrow between developed and developing countries.Concurrent with the shift in power among nation-states, the relative power of various nonstateactors—including businesses, tribes, religious organizations, and criminal networks—isincreasing. The players are changing, but so too are the scope and breadth of transnational issuesimportant for continued global prosperity. Aging populations in the developed world; growingenergy, food, and water constraints; and worries about climate change will limit and diminishwhat will still be an historically unprecedented age of prosperity.Historically, emerging multipolar systems have been more unstable than bipolar or unipolarones. Despite the recent financial volatility—which could end up accelerating many ongoingtrends—we do not believe that we are headed toward a complete breakdown of the internationalsystem, as occurred in 1914-1918 when an earlier phase of globalization came to a halt.However, the next 20 years of transition to a new system are fraught with risks. Strategicrivalries are most likely to revolve around trade, investments, and technological innovation andacquisition, but we cannot rule out a 19th century-like scenario of arms races, territorialexpansion, and military rivalries.This is a story with no clear outcome, as illustrated by a series of vignettes we use to map outdivergent futures. Although the United States is likely to remain the single most powerful actor,the United States’ relative strength—even in the military realm—will decline and US leveragewill become more constrained. At the same time, the extent to which other actors—both stateand nonstate—will be willing or able to shoulder increased burdens is unclear. Policymakersand publics will have to cope with a growing demand for multilateral cooperation when theinternational system will be stressed by the incomplete transition from the old to a still-formingnew order.Economic Growth Fueling Rise of Emerging PlayersIn terms of size, speed, and directional flow, the transfer of global wealth and economic powernow under way—roughly from West to East—is without precedent in modern history. This shiftderives from two sources. First, increases in oil and commodity prices have generated windfallprofits for the Gulf states and Russia. Second, lower costs combined with government policieshave shifted the locus of manufacturing and some service industries to Asia.Growth projections for Brazil, Russia, India, and China (the BRICs) indicate they willcollectively match the original G-7’s share of global GDP by 2040-2050. China is poised tohave more impact on the world over the next 20 years than any other country. If current trendspersist, by 2025 China will have the world’s second largest economy and will be a leading2 National power scores, computed by the International Futures computer model, are the product of an indexcombining the weighted factors of GDP, defense spending, population, and technology.vi

military power. It also could be the largest importer of natural resources and the biggest polluter.India probably will continue to enjoy relatively rapid economic growth and will strive for amultipolar world in which New Delhi is one of the poles. China and India must decide the extentto which they are willing and capable of playing increasing global roles and how each will relateto the other. Russia has the potential to be richer, more powerful, and more self-assured in 2025if it invests in human capital, expands and diversifies its economy, and integrates with globalmarkets. On the other hand, Russia could experience a significant decline if it fails to take thesesteps and oil and gas prices remain in the $50-70 per barrel range. No other countries areprojected to rise to the level of China, India, or Russia, and none is likely to match theirindividual global clout. We expect, however, to see the political and economic power of othercountries—such as Indonesia, Iran, and Turkey—increase.For the most part, China, India, and Russia are not following the Western liberal model for selfdevelopmentbut instead are using a different model, “state capitalism.” State capitalism is aloose term used to describe a system of economic management that gives a prominent role to thestate. Other rising powers—South Korea, Taiwan, and Singapore—also used state capitalism todevelop their economies. However, the impact of Russia, and particularly China, following thispath is potentially much greater owing to their size and approach to “democratization.” Weremain optimistic about the long-term prospects for greater democratization, even thoughadvances are likely to be slow and globalization is subjecting many recently democratizedcountries to increasing social and economic pressures with the potential to undermine liberalinstitutions.Many other countries will fall further behind economically. Sub-Saharan Africa will remainthe region most vulnerable to economic disruption, population stresses, civil conflict, andpolitical instability. Despite increased global demand for commodities for which Sub-SaharanAfrica will be a major supplier, local populations are unlikely to experience significant economicgain. Windfall profits arising from sustained increases in commodity prices might furtherentrench corrupt or otherwise ill-equipped governments in several regions, diminishing theprospects for democratic and market-based reforms. Although many of Latin America’s majorcountries will have become middle income powers by 2025, others, particularly those such asVenezuela and Bolivia that have embraced populist policies for a protracted period, will lagbehind—and some, such as Haiti, will have become even poorer and less governable. Overall,Latin America will continue to lag behind Asia and other fast-growing areas in terms ofeconomic competitiveness.Asia, Africa, and Latin America will account for virtually all population growth over the next20 years; less than 3 percent of the growth will occur in the West. Europe and Japan willcontinue to far outdistance the emerging powers of China and India in per capita wealth, but theywill struggle to maintain robust growth rates because the size of their working-age populationswill decrease. The US will be a partial exception to the aging of populations in the developedworld because it will experience higher birth rates and more immigration. The number ofmigrants seeking to move from disadvantaged to relatively privileged countries is likely toincrease.vii

The number of countries with youthful age structures in the current “arc of instability” isprojected to decline by as much as 40 percent. Three of every four youth-bulge countries thatremain will be located in Sub-Saharan Africa; nearly all of the remainder will be located in thecore of the Middle East, scattered through southern and central Asia, and in the Pacific Islands.New Transnational AgendaResource issues will gain prominence on the international agenda. Unprecedented globaleconomic growth—positive in so many other regards—will continue to put pressure on a numberof highly strategic resources, including energy, food, and water, and demand is projected tooutstrip easily available supplies over the next decade or so. For example, non-OPEC liquidhydrocarbon production—crude oil, natural gas liquids, and unconventionals such as tar sands—will not grow commensurate with demand. Oil and gas production of many traditional energyproducers already is declining. Elsewhere—in China, India, and Mexico—production hasflattened. Countries capable of significantly expanding production will dwindle; oil and gasproduction will be concentrated in unstable areas. As a result of this and other factors, the worldwill be in the midst of a fundamental energy transition away from oil toward natural gas, coaland other alternatives.The World Bank estimates that demand for food will rise by 50 percent by 2030, as a result ofgrowing world population, rising affluence, and the shift to Western dietary preferences by alarger middle class. Lack of access to stable supplies of water is reaching critical proportions,particularly for agricultural purposes, and the problem will worsen because of rapid urbanizationworldwide and the roughly 1.2 billion persons to be added over the next 20 years. Today,experts consider 21 countries, with a combined population of about 600 million, to be eithercropland or freshwater scarce. Owing to continuing population growth, 36 countries, with about1.4 billion people, are projected to fall into this category by 2025.Climate change is expected to exacerbate resource scarcities. Although the impact of climatechange will vary by region, a number of regions will begin to suffer harmful effects, particularlywater scarcity and loss of agricultural production. Regional differences in agriculturalproduction are likely to become more pronounced over time with declines disproportionatelyconcentrated in developing countries, particularly those in Sub-Saharan Africa. Agriculturallosses are expected to mount with substantial impacts forecast by most economists by late thiscentury. For many developing countries, decreased agricultural output will be devastatingbecause agriculture accounts for a large share of their economies and many of their citizens liveclose to subsistence levels.New technologies could again provide solutions, such as viable alternatives to fossil fuels ormeans to overcome food and water constraints. However, all current technologies are inadequatefor replacing the traditional energy architecture on the scale needed, and new energytechnologies probably will not be commercially viable and widespread by 2025. The pace oftechnological innovation will be key. Even with a favorable policy and funding environment forbiofuels, clean coal, or hydrogen, the transition to new fuels will be slow. Major technologieshistorically have had an “adoption lag.” In the energy sector, a recent study found that it takes anaverage of 25 years for a new production technology to become widely adopted.viii

Despite what are seen as long odds now, we cannot rule out the possibility of an energytransition by 2025 that would avoid the costs of an energy infrastructure overhaul. The greatestpossibility for a relatively quick and inexpensive transition during the period comes from betterrenewable generation sources (photovoltaic and wind) and improvements in battery technology.With many of these technologies, the infrastructure cost hurdle for individual projects would belower, enabling many small economic actors to develop their own energy transformation projectsthat directly serve their interests—e.g., stationary fuel cells powering homes and offices,recharging plug-in hybrid autos, and selling energy back to the grid. Also, energy conversionschemes—such as plans to generate hydrogen for automotive fuel cells from electricity in thehomeowner’s garage—could avoid the need to develop complex hydrogen transportationinfrastructure.Prospects for Terrorism, Conflict, and ProliferationTerrorism, proliferation, and conflict will remain key concerns even as resource issues move upon the international agenda. Terrorism is unlikely to disappear by 2025, but its appeal coulddiminish if economic growth continues and youth unemployment is mitigated in the Middle East.Economic opportunities for youth and greater political pluralism probably would dissuade somefrom joining terrorists’ ranks, but others—motivated by a variety of factors, such as a desire forrevenge or to become “martyrs”—will continue to turn to violence to pursue their objectives.In the absence of employment opportunities and legal means for political expression, conditionswill be ripe for disaffection, growing radicalism, and possible recruitment of youths intoterrorist groups. Terrorist groups in 2025 will likely be a combination of descendants of longestablishedgroups—that inherit organizational structures, command and control processes, andtraining procedures necessary to conduct sophisticated attacks—and newly emergent collectionsof the angry and disenfranchised that become self-radicalized. For those terrorist groups that areactive in 2025, the diffusion of technologies and scientific knowledge will place some of theworld’s most dangerous capabilities within their reach. One of our greatest concerns continuesto be that terrorist or other malevolent groups might acquire and employ biological agents, orless likely, a nuclear device, to create mass casualties.Although Iran’s acquisition of nuclear weapons is not inevitable, other countries’ worries abouta nuclear-armed Iran could lead states in the region to develop new security arrangements withexternal powers, acquire additional weapons, and consider pursuing their own nuclear ambitions.It is not clear that the type of stable deterrent relationship that existed between the great powersfor most of the Cold War would emerge naturally in the Middle East with a nuclear-weaponscapable Iran. Episodes of low-intensity conflict taking place under a nuclear umbrella could leadto an unintended escalation and broader conflict if clear red lines between those states involvedare not well established.We believe ideological conflicts akin to the Cold War are unlikely to take root in a world inwhich most states will be preoccupied with the pragmatic challenges of globalization andshifting global power alignments. The force of ideology is likely to be strongest in the Muslimworld—particularly the Arab core. In those countries that are likely to struggle with youthbulges and weak economic underpinnings—such as Pakistan, Afghanistan, Nigeria, andYemen—the radical Salafi trend of Islam is likely to gain traction.ix

Types of conflict we have not seen for awhile—such as over resources—could reemerge.Perceptions of energy scarcity will drive countries to take actions to assure their future access toenergy supplies. In the worst case, this could result in interstate conflicts if government leadersdeem assured access to energy resources, for example, to be essential for maintaining domesticstability and the survival of their regimes. However, even actions short of war will haveimportant geopolitical consequences. Maritime security concerns are providing a rationale fornaval buildups and modernization efforts, such as China’s and India’s development of blue-waternaval capabilities. The buildup of regional naval capabilities could lead to increased tensions,rivalries, and counterbalancing moves but it also will create opportunities for multinationalcooperation in protecting critical sea lanes. With water becoming more scarce in Asia and theMiddle East, cooperation to manage changing water resources is likely to become more difficultwithin and between states.The risk of nuclear weapon use over the next 20 years, although remaining very low, is likely tobe greater than it is today as a result of several converging trends. The spread of nucleartechnologies and expertise is generating concerns about the potential emergence of new nuclearweapon states and the acquisition of nuclear materials by terrorist groups. Ongoing low-intensityclashes between India and Pakistan continue to raise the specter that such events could escalateto a broader conflict between those nuclear powers. The possibility of a future disruptive regimechange or collapse occurring in a nuclear weapon state such as North Korea also continues toraise questions regarding the ability of weak states to control and secure their nuclear arsenals.If nuclear weapons are used in the next 15-20 years, the international system will be shocked asit experiences immediate humanitarian, economic, and political-military repercussions. A futureuse of nuclear weapons probably would bring about significant geopolitical changes as somestates would seek to establish or reinforce security alliances with existing nuclear powers andothers would push for global nuclear disarmament.A More Complex International SystemThe trend toward greater diffusion of authority and power that has been occurring for a coupledecades is likely to accelerate because of the emergence of new global players, the worseninginstitutional deficit, potential expansion of regional blocs, and enhanced strength of nonstateactors and networks. The multiplicity of actors on the international scene could add strength—in terms of filling gaps left by aging post-World War II institutions—or further fragment theinternational system and incapacitate international cooperation. The diversity in type of actorraises the likelihood of fragmentation occurring over the next two decades, particularly given thewide array of transnational challenges facing the international community.The rising BRIC powers are unlikely to challenge the international system as did Germany andJapan in the 19 th and 20 th centuries, but because of their growing geopolitical and economic clout,they will have a high degree of freedom to customize their political and economic policies ratherthan fully adopting Western norms. They also are likely to want to preserve their policy freedomto maneuver, allowing others to carry the primary burden for dealing with such issues asterrorism, climate change, proliferation, and energy security.x

Existing multilateral institutions—which are large and cumbersome and were designed for adifferent geopolitical order—will have difficulty adapting quickly to undertake new missions,accommodate changing memberships, and augment their resources.Nongovernmental organizations (NGOs)—concentrating on specific issues—increasingly willbe a part of the landscape, but NGO networks are likely to be limited in their ability to effectchange in the absence of concerted efforts by multilateral institutions or governments. Efforts atgreater inclusiveness—to reflect the emergence of the newer powers—may make it harder forinternational organizations to tackle transnational challenges. Respect for the dissenting viewsof member nations will continue to shape the agenda of organizations and limit the kinds ofsolutions that can be attempted.Greater Asian regionalism—possible by 2025—would have global implications, sparking orreinforcing a trend toward three trade and financial clusters that could become quasi-blocs:North America, Europe, and East Asia. Establishment of such quasi-blocs would haveimplications for the ability to achieve future global World Trade Organization (WTO)agreements. Regional clusters could compete in setting trans-regional product standards forinformation technology, biotechnology, nanotechnology, intellectual property rights, and otheraspects of the “new economy.” On the other hand, an absence of regional cooperation in Asiacould help spur competition among China, India, and Japan over resources such as energy.Intrinsic to the growing complexity of the overlapping roles of states, institutions, and nonstateactors is the proliferation of political identities, which is leading to establishment of newnetworks and rediscovered communities. No one political identity is likely to be dominant inmost societies by 2025. Religion-based networks may be quintessential issue networks andoverall may play a more powerful role on many transnational issues such as the environment andinequalities than secular groupings.The United States: Less Dominant PowerBy 2025 the US will find itself as one of a number of important actors on the world stage, albeitstill the most powerful one. Even in the military realm, where the US will continue to possessconsiderable advantages in 2025, advances by others in science and technology, expandedadoption of irregular warfare tactics by both state and nonstate actors, proliferation of long-rangeprecision weapons, and growing use of cyber warfare attacks increasingly will constrict USfreedom of action. A more constrained US role has implications for others and the likelihood ofnew agenda issues being tackled effectively. Despite the recent rise in anti-Americanism, the USprobably will continue to be seen as a much-needed regional balancer in the Middle East andAsia. The US will continue to be expected to play a significant role in using its military power tocounter global terrorism. On newer security issues like climate change, US leadership will bewidely perceived as critical to leveraging competing and divisive views to find solutions. At thesame time, the multiplicity of influential actors and distrust of vast power means less room forthe US to call the shots without the support of strong partnerships. Developments in the rest ofthe world, including internal developments in a number of key states—particularly China andRussia—are also likely to be crucial determinants of US policy.xi

October Surprise illustrates the impact of inattention to global climate change; unexpectedmajor impacts narrow the world’s range of options.In BRICs’ Bust-Up, disputes over vital resources emerge as a source of conflict betweenmajor powers—in this case two emerging heavyweights—India and China.In Politics is Not Always Local, nonstate networks emerge to set the international agenda onthe environment, eclipsing governments.xiii

The international system—as constructedfollowing the Second World War—will bealmost unrecognizable by 2025. Indeed,“international system” is a misnomer as it islikely to be more ramshackle than orderly, itscomposition hybrid and heterogeneous asbefits a transition that will still be a work inprogress in 2025. The transformation is beingfueled by a globalizing economy, marked byan historic shift of relative wealth andeconomic power from West to East, and bythe increasing weight of new players—especially China and India. The US willremain the single most important actor butwill be less dominant. As was true of theUnited States in the 19th and 20th centuries,China and India will at times be reticent andat other times impatient to assume larger roleson the world stage. In 2025, both will still bemore concerned about their own internaldevelopment than changing the internationalsystem.Concurrent with the shift in power amongnation-states, the relative power of variousnonstate actors—including businesses, tribes,religious organizations, and even criminalnetworks—will continue to increase. Severalcountries could even be “taken over” and runby criminal networks. In areas of Africa orSouth Asia, states as we know them mightwither away, owing to the inability ofgovernments to provide for basic needs,including security.By 2025, the international community will becomposed of many actors in addition tonation-states and will lack an overarchingapproach to global governance. The “system”will be multipolar with many clusters of bothstate and nonstate actors. Multipolarinternational systems—like the Concert ofEurope—have existed in the past, but the onethat is emerging is unprecedented because it isglobal and encompasses a mix of state andnonstate actors that are not grouped into rivalcamps of roughly equal weight. The mostsalient characteristics of the “new order” willbe the shift from a unipolar world dominatedby the United States to a relativelyunstructured hierarchy of old powers andrising nations, and the diffusion of powerfrom state to nonstate actors.“…we do not believe that we are headedtoward a complete breakdown [of theinternational system]…However, the next 20years of transition toward a newinternational system are fraught withrisks…”History tells us that rapid change brings manydangers. Despite the recent financialvolatility, which could end up acceleratingmany ongoing trends, we do not believe thatwe are headed toward a completebreakdown—as occurred in 1914-1918 whenan earlier phase of globalization came to ahalt. However, the next 20 years of transitiontoward a new international system are fraughtwith risks—more than we envisaged when wepublished Mapping the Global Future 3 in2004. These risks include the growingprospect of a nuclear arms race in the MiddleEast and possible interstate conflicts overresources. The breadth of transnationalissues requiring attention also is increasing toinclude issues connected with resourceconstraints in energy, food, and water; andworries about climate change. Globalinstitutions that could help the world dealwith these transnational issues and, moregenerally, mitigate the risks of rapid changecurrently appear incapable of rising to the3 See Mapping the Global Future: Report of theNational Intelligence Council’s 2020 Project,National Intelligence Council, December 2004, whichcan be found at:www.dni.gov/nic/NIC_2020_project.html.1

Comparison Between Mapping the Global Future:Report of the Intelligence Council’s 2020 Projectand Global Trends 2025: A Transformed WorldThe most dramatic difference between Mapping the Global Future: Report of the IntelligenceCouncil’s 2020 Project and Global Trends 2025: A Transformed World is the latter’sassumptions of a multipolar future, and therefore dramatic changes in the international system.The 2025 report describes a world in which the US plays a prominent role in global events, butthe US is one among many global actors who manage problems. In contrast, the 2020 reportprojects continued US dominance, positing that most major powers have forsaken the idea ofbalancing the US.The two documents also differ in their treatment of energy supply, demand, and new alternativesources. In 2020, energy supplies “in the ground” are considered “sufficient to meet globaldemand.” What is uncertain, according to the earlier report, is whether political instability inproducer countries, supply disruptions, or competition for resources might deleteriously affectinternational oil markets. Though 2020 mentions the global increase in energy consumption, itemphasizes the domination of fossil fuels. In contrast, 2025 sees the world in the midst of atransition to cleaner fuels. New technologies are projected to provide the capability for fossilfuel substitutes and solutions to water and food scarcity. The 2020 report acknowledges thatenergy demands will influence superpower relations, but the 2025 report considers energyscarcity as a driving factor in geopolitics.Both reports project probable strong global economic growth—fueled by the rise of Brazil,Russia, India, and China, absent major shocks. The 2025 report, however, assesses thelikelihood of major discontinuities to be high, emphasizing that “no single outcome seemspreordained” and that the next 20 years of transition toward a new international system arefraught with risks, such as a nuclear arms race in the Middle East and possible interstate conflictsover resources.The scenarios in both reports address the future of globalization, the future structure of theinternational system, and the dividing lines among groups that will cause conflict orconvergence. In both reports, globalization is seen as a driver so pervasive that it will reordercurrent divisions based on geography, ethnicity, and religious and socio-economic status.2

challenges without concerted efforts by theirleaders.More Change than ContinuityThe rapidly changing international order at atime of growing geopolitical challengesincreases the likelihood of discontinuities,shocks, and surprises. No single outcomeseems preordained: the Western model ofeconomic liberalism, democracy, andsecularism, for example, which manyassumed to be inevitable, may lose itsluster—at least in the medium term.In some cases, the surprise element is only amatter of timing: an energy transition, forexample, is inevitable; the only questions arewhen and how abruptly or smoothly such atransition occurs. Other discontinuities areless predictable. Recognizing that what mayseem implausible today could becomefeasible or even likely by 2025, we havelooked at a number of single development“shocks.” Examples include the globalimpact of a nuclear arms exchange, a rapidreplacement for fossil fuels, and a“democratic” China.New technologies could provide solutions,such as viable alternatives to fossil fuel ormeans to overcome food and waterconstraints. A critical uncertainty is whethernew technologies will be developed andcommercialized in time to avert a significantslowdown in economic growth owing toresource constraints. Such a slowdown wouldjeopardize the rise of new powers and deal aserious blow to the aspirations of thosecountries not yet fully in the globalizationgame. A world in which shortagespredominate could trigger behaviors differentfrom one in which scarcities are overcomethrough technology or other means.Alternative FuturesThis study is organized into seven sectionsthat examine:The Globalizing Economy.Demographics of Discord.The New Players.Scarcity in the Midst of Plenty.Growing Potential for Conflict.Will the International System Be Up tothe Challenges?Power-Sharing in a Multipolar World.As with our previous works, we will describepossible alternative futures that could resultfrom the trends we discuss. 4 We see the next15-20 years as one of those great historicalturning points where multiple factors arelikely to be in play. How such factorsintersect with one another and the role ofleadership will be crucial to the outcome.In constructing these scenarios, we focused oncritical uncertainties regarding the relativeimportance of the nation-state as comparedwith nonstate actors, and the level of globalcooperation. In some of the scenarios, statesare more dominant and drive globaldynamics; in others, nonstate actors, includingreligious movements, nongovernmentalorganizations (NGOs), and super-empowered4 See Global Trends 2015, A Dialogue About theFuture with Nongovernment Experts, NationalIntelligence Council, December 2000; and Mappingthe Global Future: Report of the NationalIntelligence Council’s 2020 Project, NationalIntelligence Council, December 2004. The reports canbe found atwww.dni.gov/nic/NIC_global trends 2015.html andwww.dni.gov/nic/NIC_2020_project.html respectively.3

Regional Income Inequality: European Inequality Lower Than MostGini Index, most recent survey (0-100)6050More unequal income distribution403020100EU+12 aEU15IndiaUnitedStatesChinaLatinAmericaa European Union Nations that acceded in 2004 or later.Source: UNDP, Human Development Report 2007/2008: World Bank.423587AI 11-08economic management that gives a prominentrole to the state.Others—like South Korea, Taiwan, andSingapore—also chose state capitalism asthey initially developed their economies.However, the impact of Russia, andparticularly China, following this path ispotentially greater given their weight on theworld stage. Ironically, the majorenhancement of the state role in Westerneconomies now under way as a result of thecurrent financial crisis may reinforce theemerging countries’ preference for greaterstate control and distrust of an unregulatedmarketplace.These states typically favor:An Open Export Climate. Given thewealth flowing into these states, theirdesire for a weak currency despite strongdomestic economic performance requiresheavy intervention in currency markets,leading to heavy official assetaccumulation, typically until now in theform of US Treasury bonds.9

globalization in the US may fuelprotectionist forces.An Accelerated Resource Grab. The newpowers increasingly will have the meansto acquire commodities in an effort toensure continued development. Russia,China, and India have linked their nationalsecurity to increased state control of andaccess to energy resources and marketsthrough their state-owned energy firms.Gulf states are interested in land leasesand purchases elsewhere to ensureadequate food supplies.Slowing Democratization. China,particularly, offers an alternative modelfor political development in addition todemonstrating a different economicpathway. This model may proveattractive to under-performingauthoritarian regimes, in addition to weakdemocracies frustrated by years ofeconomic underperformance.The Overshadowing of InternationalFinancial Institutions. Sovereign wealthfunds have injected more capital intoemerging markets than the IMF andWorld Bank combined, and this trendcould even continue with unwindingglobal imbalances. China already isbeginning to couple SWF investment withdirect aid and foreign assistance, oftendirectly outbidding the World Bank ondevelopment projects. Such foreigninvestment by newly rich states such asChina, Russia, and the GCC states willlead to diplomatic realignments and newrelationships between these states and thedeveloping world.A Decline in the Dollar’s InternationalRole. Despite recent inflows into dollarassets and the appreciation of the dollar,the dollar could lose its status as anunparalleled global reserve currency by2025, and become a first among equals ina market basket of currencies. This mayforce the US to consider more carefullyhow the conduct of its foreign policyaffects the dollar. Without a steadysource of external demand for dollars, USforeign policy actions might bringexposure to currency shock and higherinterest rates for Americans.Growing use of the euro is already evident,potentially making it harder for the US in thefuture to exploit the unique role of the dollarin international trade and investment to freezeassets and disrupt the financial flows of itsadversaries, such as it recently hasaccomplished with financial sanctions againstthe leadership in North Korea and Iran.Incentives and inclinations to move awayfrom the dollar will be tempered, however, byuncertainties and instabilities in theinternational financial system.Multiple Financial NodesAnchored by the US and EU in the West,Russia and the GCC states in Central Asiaand the Middle East, and China andeventually India in the East, the financiallandscape for the first time will be genuinelyglobal and multipolar. Insomuch as the recentfinancial crisis heightens interest in lessleveraged finance, Islamic finance may alsosee a boost. While such a global andmultipolar financial order signals a relativedecline for US power and a likely increase inmarket competition and complexity, thesedownsides are likely to be accompanied bymany positives. Over time, and as theydevelop, these multiple financial centers maycreate redundancies that help insulate marketsagainst financial shocks and currency crises,quelling their effects before global contagiontakes hold. Similarly, as regions becomemore invested in their financial epicenters,incentives to preserve geopolitical stability to12

Science and Technology Leadership: A Test for the Emerging PowersThe relationship between achievements in science and technology and economic growth hasbeen long established, but the path is not always predictable. More significant is the overalleffectiveness of a nation’s National Innovation System (NIS)—the process by which intellectualconcepts are moved toward commercialization for the benefit of a national economy. Accordingto a NIC-contracted global survey of scientific experts, the United States currently boasts astronger innovation system than the developing economies of China and India.The idea of an NIS was first developed in the 1980s as an aid to understanding how somecountries were proving better than others at turning intellectual concepts into commercialproducts that would boost their economies. The NIS model is evolving as informationtechnology and the effect of increased globalization (and multinational corporations)influence national economies.According to the NIC-commissioned study, nine factors can contribute to a modern NIS: fluidityof capital, flexibility of the labor pool, government receptivity to business, informationcommunication technologies, private sector development infrastructure, legal systems to protectintellectual property rights, available scientific and human capital, marketing skills, and culturalpropensity to encourage creativity.China and India are expected in 10 years to achieve near parity with the US in two differentareas: scientific and human capital (India) and government receptivity to business innovation(China). China and India will narrow significantly but not close the gap in all remaining factors.The United States is expected to remain dominant in three areas: protection for intellectualproperty rights, business sophistication to mature innovation, and encouragement of creativity.Companies in China, India, and other major developing countries have unique opportunities tobe the first to develop a host of emerging technologies. This is especially the case in thoseinstances where companies are building new infrastructure and not burdened by historicalpatterns of development. Such opportunities include distributed electrical power generation,development of clean water sources, and the next generation of Internet and new informationtechnologies (such as ubiquitous computing and the Internet of Things—see the foldout). Earlyand significant adoption of these technologies could provide considerable economic advantage.shelter these financial flows will increase.History suggests, however, that such aredirection toward regional financial centerscould soon spill over into other areas ofpower. Rarely, if ever, have such “financiersof last resort” been content to limit theirinfluence to strictly financial realms. Interregionaltensions could divide the West withthe US and EU having increasingly divergenteconomic and monetary priorities,complicating Western efforts to lead andjointly grow the global economy.Diverging Development Models, but forHow Long?The state-centric model in which the statemakes the key economic decisions and, in thecase of China and increasingly Russia,democracy is restricted, raises questions aboutthe inevitability of the traditional Westernrecipe—roughly liberal economics and13

democracy—for development. Over the next15-20 years, more developing countries maygravitate toward Beijing’s state-centric modelrather than the traditional Western model ofmarkets and democratic political systems toincrease the chances of rapid developmentand perceived political stability. While webelieve a gap will remain, the enhanced roleof the state in Western economies may alsolessen the contrast between the two models.In the Middle East, secularism, which also hasbeen considered an integral part of theWestern model, increasingly may be seen asout of place as Islamic parties come intoprominence and possibly begin to rungovernments. As in today’s Turkey, we couldsee both increased Islamization and greateremphasis on economic growth andmodernization.“China, particularly, offers an alternativemodel for political development in additionto demonstrating a different economicpathway.”The lack of any overarching ideology and themix-and-match of some of the elements—forexample Brazil and India are vibrant marketdemocracies—means the state-centric modeldoes not yet constitute anything like analternative system and, in our view, isunlikely ever to be one. Whether Chinaliberalizes both politically and economicallyover the next two decades is a particularlycritical test for the long-term sustainability ofan alternative to the traditional Westernmodel. Although democratization probablywill be slow and may have its own Chinesecharacter, we believe the emerging middleclass will press for greater political influenceand accountability of those in charge,particularly if the central government faltersin its ability to sustain economic growth or isunresponsive to growing “quality of life”issues such as increasing pollution or the needfor health and education services. Thegovernment’s own efforts to boost S&T andestablish a “high tech” economy will increaseincentives for greater openness to develophuman capital at home and attract expertiseand ideas from outside.Historical patterns evinced by other energyproducers suggest deflecting pressures forliberalization will be easier for Russianauthorities. Traditionally, energy producersalso have been able to use revenues to buy offpolitical opponents; few have made thetransition to democracy while their energyrevenues remain strong.A sustained plunge in the price of oil and gaswould alter the outlook and increase prospectsfor greater political and economicliberalization in Russia.14

Latin America: Moderate Economic Growth, Continued Urban ViolenceMany Latin American countries will have achieved marked progress in democratic consolidationby 2025, and some of these countries will have become middle income powers. Others,particularly those that have embraced populist policies, will lag behind—and some, such asHaiti, will have become even poorer and still less governable. Public security problems willcontinue to be intractable—and in some cases unmanageable. Brazil will become the leadingregional power, but its efforts to promote South American integration will be realized only inpart. Venezuela and Cuba will have some form of vestigial influence in the region in 2025, buttheir economic problems will limit their appeal. Unless the United States is able to delivermarket access on a permanent and meaningful basis, the US could lose its traditionally privilegedposition in the region, with a concomitant decline in political influence.Steady economic growth between now and 2025—perhaps as high as 4 percent—will fuelmodest decreases in poverty levels in some countries and a gradual reduction of the informalsector. Progress on critical secondary reforms, such as education, regressive tax systems, weakproperty rights, and inadequate law enforcement will remain incremental and spotty. Therelative growing importance of the region as a producer of oil, natural gas, biofuels, and otheralternative energy sources will spur growth in Brazil, Chile, Colombia, and Mexico, but stateownership and political turmoil will impede efficient development of energy resources. Theeconomic competitiveness of Latin America will continue to lag behind Asia and some other fastgrowing areas.Population growth in the region will be relatively moderate, but the rural poor and indigenouspopulations will continue to grow at a faster rate. Latin America will have a graying populationas the growth rate of adults aged 60 and over rises.Parts of Latin America will continue to be among the world’s most violent areas. Drugtrafficking organizations, sustained in part by increased local drug consumption, transnationalcriminal cartels, and local crime rings and gangs, will continue to undermine public security.These factors, and persistent weaknesses in the rule of law, will mean that a few small countries,especially in Central America and the Caribbean, will verge on becoming failed states.Latin America will continue to play a marginal role in the international system, except for itsparticipation in international trade and some peacekeeping efforts.US influence in the region will diminish somewhat, in part because of Latin America’sbroadening economic and commercial relations with Asia, Europe, and other blocs. Latins, ingeneral, will look to the United States for guidance both globally and for relations with theregion. An increasingly numerous Hispanic population will ensure greater US attention to, andinvolvement in, the culture, religion, economics, and politics of the region.15

(Continued…)rearing future generations, women might help show the way to greater social assimilation andreduce the likelihood of religious extremism. The impact of growing numbers of women in theworkplace may also have an impact outside Europe. The modernizing countries of the IslamicMediterranean have close ties to Europe, to which these countries have sent many migrants.Migrants return to visit or resettle and bring with them new ideas and expectations. TheseIslamic countries also receive foreign influences from European mass media, through satellitedishes and the Internet.Higher Education Shaping the Global Landscape in 2025As global business grows increasingly borderless and labor markets more seamless, educationhas become a key determinant of countries’ economic performance and potential. Adequateprimary education is essential, but the quality and accessibility of secondary and highereducation will be even more important for determining whether societies successfully graduateup the value-added production ladder.The US lead in highly skilled labor will likely narrow as large developing countries, particularlyChina, begin to reap dividends on recent investments in human capital, including education butalso nutrition and healthcare. India faces a challenge because inadequate primary education iswidespread in the poorer regions and top-flight educational institutions cater to a relativelyprivileged few. Funding as a proportion of GDP has grown to around 5 percent in mostEuropean countries, although few European universities are rated as world class. Spending oneducation in the Arab world is roughly on par with the rest of the world in absolute terms andsurpasses the global mean as a percentage of GDP, lagging only slightly behind OECD highincomecountries. UN data and research findings by other institutions suggest, however thattraining and education of Middle Eastern youth is not driven by the needs of employers,especially for science and technology. There are some signs of progress.The US may be uniquely able to adapt its higher education and research system to rising globaldemand and position itself as a world education hub for the growing number of students that willenter the education market out to 2025. Although further opening of US classrooms andlaboratories could mean greater competition for US students, the US economy would likelybenefit because companies tend to base their operations near available human capital. Continuedexport of US educational models with the building of US campuses in the Middle East andCentral Asia could boost the attractiveness and global prestige of US universities.17

Trends in birth, death, and migration arechanging the absolute and relative size ofyoung and old, rural and urban, and ethnicmajority and minority populations within andamong emerging and established powers.These demographic reconfigurations willoffer social and economic opportunities forsome powers and severely challengeestablished arrangements in others. Thepopulations of more than 50 countries willincrease by more than a third (some by morethan two-thirds) by 2025, placing additionalstresses on vital natural resources, services,and infrastructure. Two-thirds of thesecountries are in Sub-Saharan Africa; most ofthe remaining fast-growing countries are inthe Middle East and South Asia.Populations Growing, Declining, andDiversifying—at the Same TimeWorld population is projected to grow byabout 1.2 billion between 2009 and 2025—from 6.8 billion to around 8 billion people.Although the global population increase issubstantial—with concomitant effects onresources—the rate of growth will be slowerthan it was, down from levels that added 2.4billion persons between 1980 and today.Demographers project that Asia and Africawill account for most of the populationgrowth out to 2025 while less than 3 percentof the growth will occur in the “West”—Europe, Japan, the United States, Canada,Australia, and New Zealand. In 2025,roughly 16 percent of humanity will live inthe West, down from the 18 percent in 2009and 24 percent in 1980.The largest increase will occur in India,representing about one-fifth of all growth.India’s population is projected to climb byaround 240 million by 2025, reachingapproximately 1.45 billion people. From2009 to 2025, Asia’s other giant, China, isprojected to add more than 100 million toits current population of over 1.3 billion.(See graphic on page 22.)In aggregate, the countries of Sub-SaharanAfrica are projected to add about 350million people during the same period,while those in Latin America and theCaribbean will increase by about 100million.Between now and 2025, Russia, Ukraine,Italy, almost all countries in EasternEurope, and Japan are expected to seetheir populations decline by severalpercent. These declines could approach orexceed 10 percent of the currentpopulations in Russia, Ukraine, and a fewother Eastern European countries.The populations of the US, Canada,Australia, and a few other industrial stateswith relatively high immigration rates willcontinue to grow—the US by more than40 million, Canada by 4.5 million, andAustralia by more than 3 million.By 2025, the already diverse array of nationalpopulation age structures promises to be morevaried than ever, and the gap between theyoungest and oldest profiles will continue towiden. The “oldest” countries—those inwhich people under age 30 form less thanone-third of the population—will mark a bandacross the northern edge of the world map. Incontrast, the “youngest” countries, where theunder-30 group represents 60 percent of thepopulation or more, will nearly all be locatedin Sub-Saharan Africa. (See maps on page20.)19

World Age Structure, 2005 and Projected 202520052025Percentage of PopulationYounger Than 30 Years Old60 or more45 to 5930 to 44Less than 30No dataSource: US Census data.784355AI (G00975) 11-0820

The Pensioner Boom: Challenges of AgingPopulationsPopulation aging has brought today’sdeveloped countries—with a few exceptionssuch as the US—to a demographic “tippingpoint.” Today, nearly 7 out of every 10people in the developed world are in thetraditional working years (ages 15 to 64)—ahigh-tide mark. This number has neverbefore been so high and, according to experts,in all likelihood will never be so high again.In almost every developed country, the periodof most rapid growth in the ratio of seniors(age 65 and older) to the working-agepopulation will occur during the 2010s and2020s, boosting the fiscal burden of old-agebenefit programs. By 2010, there will beabout one senior for every four working-agepeople in the developed world. By 2025, thisratio will have climbed to one to three, andpossibly higher.Japan is in a difficult position: itsworking-age population has beencontracting since the mid-1990s and itsoverall population since 2005. Today’sprojections envision a society in which, by2025, there will be one senior for everytwo working-age Japanese.The picture for Western Europe is moremixed. The UK, France, Belgium, theNetherlands, and the Nordics will likelymaintain the highest fertility rates inEurope but will remain below twochildren per woman. In the rest of theregion, fertility probably will stay below1.5 children per woman, on par with Japan(and well below the replacement level of2.1 children per woman).Large and sustained increases in the fertilityrate, even if they began now, would notreverse the aging trend for decades in Europeand Japan. If fertility rose immediately to thereplacement level in Western Europe, theratio of seniors to people in their workingyears would continue to rise steadily throughthe late 2030s. In Japan, it would continue torise through the late 2040s.The annual level of net immigration wouldhave to double or triple to keep working-agepopulations from shrinking in WesternEurope. By 2025, non-European minoritypopulations could reach significantproportions—15 percent or more—in nearlyall Western European countries and will havea substantially younger age structure than thenative population (see page 20). Givengrowing discontent with current levels ofimmigrants among native Europeans, suchsteep increases are likely to heighten tensions.The aging of societies will have economicconsequences. Even with productivityincreases, slower employment growth from ashrinking work force probably will reduceEurope’s already tepid GDP growth by 1percent. By the 2030s, Japan’s GDP growthis projected to drop to near zero according tosome models. The cost of trying to maintainpensions and health coverage will squeeze outexpenditures on other priorities, such asdefense.Persistent Youth BulgesCountries with youthful age structures andrapidly growing populations form a crescentstretching from the Andean region of LatinAmerica across Sub-Saharan Africa, theMiddle East and the Caucasus, and thenthrough the northern parts of South Asia. By2025, the number of countries in this “arc ofinstability” will have decreased by 35 to 40percent owing to declining fertility andmaturing populations. Three quarters of thethree dozen “youth bulge countries” projectedto linger beyond 2025 will be located in Sub-Saharan Africa. The remainder will be21

Total PopulationBillion people2.0Now 20251.51.00.50ChinaIndiaIranJapanRussiaWestern EuropeUSSource: US Census Data423712ID 11-08located in the Middle East and scatteredacross Asia and among the Pacific Islands.The emergence of new economic tigers by2025 could occur where youth bulgesmature into “worker bulges.” Expertsargue that this demographic bonus is mostadvantageous when the country providesan educated work force and a businessfriendlyenvironment for investment.Potential beneficiaries include Turkey,Lebanon, Iran, and the Maghreb states ofNorth Africa (Morocco, Algeria andTunisia), Colombia, Costa Rica, Chile,Vietnam, Indonesia, and Malaysia.The current youth bulges in the Maghrebstates, Turkey, Lebanon, and Iran willdiminish rapidly but those in the WestBank/Gaza, Iraq, Yemen, Saudi Arabiaand adjacent Afghanistan and Pakistanwill persist through 2025. Unlessemployment conditions changedramatically, youth in weak states willcontinue to go elsewhere—externalizingvolatility and violence.The populations of already parlous youthbulgestates—such as Afghanistan,Democratic Republic of Congo (DROC),Ethiopia, Nigeria, Pakistan, and Yemen—areprojected to remain on rapid-growthtrajectories. Pakistan’s and Nigeria’spopulations are each projected to grow byabout 55 million people. Ethiopia and DROCwill likely add about 40 million each, whilethe populations of Afghanistan and Yemenare projected to grow more than 50 percentlarger than today’s. All will retain agestructures with large proportions of young22

The Impact of HIV/AIDSNeither an effective HIV vaccine nor a selfadministeredmicrobicide, even if developedand tested before 2025, will likely be widelydisseminated by then. Although preventionefforts and local behavioral changes willdepress infection rates globally, expertsexpect HIV/AIDS to remain a globalpandemic through 2025 with its epicenter ofinfection in Sub-Saharan Africa. Unliketoday, the vast majority of people living withHIV will have access to life-extending antiretroviraltherapies.If prevention efforts and effectivenessremain at current levels, the HIV-positivepopulation is expected to climb to around50 million by 2025—up from 33 milliontoday (22 million in Sub-Saharan Africa).In this scenario, 25 million to 30 millionpeople would need anti-retroviral therapyto survive during 2025.In another scenario assuming fully scaledupprevention by 2015, the HIV-infectedpopulation would peak and then fall tonear 25 million worldwide by 2025,bringing the number needing antiretroviraltherapy to between 15 and 20million people.adults, a demographic feature that isassociated with the emergence of politicalviolence and civil conflict.Changing Places: Migration, Urbanizationand Ethnic ShiftsMoving Experiences. The net migration ofpeople from rural to urban areas and frompoorer to richer countries likely will continueapace in 2025, fueled by a widening gap ineconomic and physical security betweenadjacent regions.Europe will continue to attract migrantsfrom younger, less developed, and fastergrowing African and Asian regionsnearby. However, other emerging centersof industrialization—China and southernIndia and possibly Turkey and Iran—could attract some of this labor migrationas growth among their working-agepopulations slows and wages rise.Labor migration to the United Statesprobably will slow as Mexico’s industrialbase grows and its population ages—aresponse to rapid fertility declines in the1980s and 1990s—and as competingcenters of development arise in Brazil andthe southern cone of South America.Urbanization. If current trends persist, by2025 about 57 percent of the world’spopulation will live in urban areas, up fromabout 50 percent today. By 2025, the worldwill add another eight megacities to thecurrent list of 19—all except one of theseeight will be in Asia and Sub-Saharan Africa.Most urban growth, however, will occur insmaller cities of these regions, which areexpanding along highways and coalescingnear crossroads and coastlines, often withoutformal sector job growth and withoutadequate services.Identity Demography. Where ethno-religiousgroups have experienced their transition tolower birth rates at varying paces, lingeringethnic youth bulges and shifts in groupproportions could trigger significant politicalchanges. Shifts in ethno-religiouscomposition resulting from migration alsocould fuel political change, particularly whereimmigrants settle in low-fertilityindustrialized countries.Differing rates of growth among Israel’sethnic communities could abet politicalshifts in the Knesset (Israel’s parliament).23

By 2025, Israeli Arabs, who currentlycomprise a fifth of the population, willcomprise about a quarter of Israel’sexpected population of nearly 9 million.Over the same period, Israel’s ultraorthodoxJewish community could nearlydouble, becoming larger than 10 percentof the population.Irrespective of their political status in2025, the populations of the West Bank,currently about 2.6 million people, andGaza, now at 1.5 million, will have grownsubstantially: the West Bank by nearly 40percent; Gaza by almost 60 percent. Theircombined population in 2025—stillyouthful, growing, and approaching 6million (or exceeding that figure,according to some projections)—promisesto introduce further challenges toinstitutions hoping to generate adequateemployment and public services, maintainsufficient availability of fresh water andfood, and achieve political stability.A number of other ethnic shifts between nowand 2025 will have regional implications. Forexample, growing proportions of NativeAmericans in several Andean and CentralAmerican democracies are likely to continueto push governments in those countriestoward populism. In Lebanon, ongoingfertility decline in the Shiite population,which currently lags ethnic neighbors inincome and exceeds them in family size, willbring about a more mature age structure inthis community—and could deepen Shiiteintegration into the mainstream of Lebaneseeconomic and political life, easing communaltensions.Western Europe has become the destinationof choice for more than one millionimmigrants annually and home for more than35 million foreign born—many from Muslimmajoritycountries in North Africa, the MiddleEast, and South Asia (see box on page 25).Immigration and integration politics, andconfrontations with Muslim conservativesover education, women’s rights, and therelationship between the state and religion arelikely to strengthen right-of-center politicalorganizations and splinter the left-of-centerpolitical coalitions that were instrumental inbuilding and maintaining Europe’s welfarestates.By 2025, international migration’s humancapital and technological transfer effects willbegin to favor the most stable Asian and LatinAmerican countries. Although the emigrationof professionals probably will continue todeprive poor and unstable countries acrossAfrica and parts of the Middle East of talent,the likely return of many wealthy andeducated Asian and Latin Americans from theUS and Europe will help boost thecompetitiveness of China, Brazil, India, andMexico.Demographic Portraits: Russia, China,India, and IranRussia: A Growing Multiethnic State?Currently a country with around 141 millionpeople, Russia’s demographically aging anddeclining population is projected to dropbelow 130 million by 2025. The chances ofstemming such a steep decline over thisperiod are slim: the population of women intheir 20s—their prime childbearing years—will be declining rapidly, numbering around55 percent of today’s count by 2025.Russia’s high rate of male middle-agemortality is unlikely to change dramatically.Muslim minorities that have maintainedhigher fertility will comprise largerproportions of the Russian population, as willTurkic and Chinese immigrants. Accordingto some more conservative projections, theMuslim minority share of Russia’s populationwill rise from 14 percent in 2005 to 1924

Muslims in Western EuropeWestern Europe’s Muslim population currently totals between 15 and 18 million. The largestproportions of Muslims—between 6 and 8 percent—are in France (5 million) and theNetherlands (nearly 1 million), followed by countries with 4 to 6 percent: Germany (3.5 million),Denmark (300,000), Austria (500,000), and Switzerland (350,000). The UK and Italy also haverelatively large Muslim populations, 1.8 million and 1 million respectively, though constitutingless overall proportions (3 percent and 1.7 percent respectively). If current patterns ofimmigration and Muslim residents’ above-average fertility continue, Western Europe could have25 to 30 million Muslims by 2025.Countries with growing numbers of Muslims will experience a rapid shift in ethnic composition,particularly around urban areas, potentially complicating efforts to facilitate assimilation andintegration. Economic opportunities are likely to be greater in urban areas, but, in the absence ofgrowth in suitable jobs, the increasing concentration could lead to more tense and unstablesituations, such as occurred with the 2005 Paris surburban riots.Slow overall growth rates, highly regulated labor markets, and workplace policies, if maintained,will make it difficult to increase job opportunities, despite Europe’s need to stem the decline ofits working-age population. When coupled with job discrimination and educationaldisadvantage, these factors are likely to confine many Muslims to low-status, low-wage jobs,deepening ethnic cleavages. Despite a sizeable stratum of integrated Muslims, a growingnumber—driven by a sense of alienation, grievance, and injustice—are increasingly likely tovalue separation in areas with Muslim-specific cultural and religious practices.Although immigrant communities are unlikely to gain sufficient parliamentary representation todictate either domestic or foreign policy agendas by 2025, Muslim-related issues will be agrowing focus and shaper of the European political scene. Ongoing societal and political tensionover integration of Muslims is likely to make European policymakers increasingly sensitive tothe potential domestic repercussions of any foreign policies for the Middle East, includingaligning too closely with the US on policies seen as pro-Israeli.percent in 2030, and 23 percent in 2050. In ashrinking population, the growing proportionthat are not Orthodox Slavs will likelyprovoke a nationalist backlash. BecauseRussia’s fertility and mortality problems arelikely to persist through 2025, Russia’seconomy—unlike Europe’s and Japan’s—willhave to support the large proportion ofdependents.Antique China? By 2025, demographersexpect China to have almost 1.4 billionpeople, nearly 100 million above its currentpopulation. The advantageous condition ofhaving a relatively large working populationand small proportions of both old-age andchildhood dependents will begin to fadearound 2015, when the size of China’sworking-age population will start to decline.Demographic aging—the onset of largerproportions of retirees and relatively fewerworkers—is being accelerated by decades ofpolicies that have limited childbirth and by atradition of early retirement. By opting toslow population growth dramatically in orderto dampen growing demand for energy, water,25

and food, China is hastening the aging of itspopulation. By 2025, a large proportion ofChina’s population will be retired or enteringretirement. Although China may over timereverse its restrictive policies on childbearingto achieve birth cohorts more closelybalancing infant girls and boys, marriage-ageadults in 2025 will still experience asignificant male-dominated imbalance thatwill create a large pool of unmarried males.Two Indias. India’s current fertility rate of2.8 children per woman masks vastdifferences between the low-fertility states ofSouth India and the commercial hubs ofMumbai, Delhi, and Kolkata on the one hand,and the higher rates of populous states in theso-called Hindi-speaking belt across thenorth, where women’s status is low andservices lag. Largely owing to growth inIndia’s densely populated northern states, itspopulation is projected to overtake China’saround 2025—just as China’s population isprojected to peak and begin a slow decline.By then, India’s demographic duality willhave widened the gap between north andsouth. By 2025, much of India’s work forcegrowth will come from the most poorlyeducated, impoverished, and crowded districtsof rural northern India. Although NorthIndian entrepreneurial families have lived fordecades in southern cities, the arrival ofwhole communities of Hindi-speakingunskilled laborers looking for work couldrekindle dormant animosities between India’scentral government and ethno-nationalistparties in the South.will largely dissipate over the next decade,yielding more mature population and workforce growth rates comparable to current ratesin the US and China (near 1 percent per year).In this time frame, the working-agepopulation will grow large relative tochildren, creating opportunities to accumulatesavings, better educate, and eventually to shiftto more technical industries and raise livingstandards. Whether Iran capitalizes on thisdemographic bonus depends on the country’spolitical leadership, which at present isunfriendly to markets and private businesses,unsettling for investors, and more focused onoil revenues than on broader job creation.Two additional demographic near-certaintiesare apparent: first, despite low fertility, Iran’spopulation of 66 million will grow to around77 million by 2025. Second, by then, a newyouth bulge (an echo produced by birthsduring the current one) will be ascending—but in this one, 15-to-24 year olds willaccount for just one-sixth of those in theworking age group compared to one thirdtoday. Some experts believe this echo bulgesignals a resurgence of revolutionary politics.Others speculate that, in the more educatedand developed Iran of 2025, young adults willfind career and consumption more attractivethan extremist politics. Only one aspect ofIran’s future is sure: its society will be moredemographically mature than ever before andstrikingly different than its neighbors.Iran’s Unique Trajectory. Havingexperienced one of the most rapid fertilitydeclines in history—from more than sixchildren per woman in 1985 to less than twotoday—Iran’s population is destined fordramatic changes by 2025. The country’spolitically restless, job-hungry youth bulge26

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By 2025, the United States will find itself inthe position of being one of a number ofimportant actors on the world stage, albeitstill the most powerful one. The relativepolitical and economic clout of manycountries will shift by 2025, according to anInternational Futures model measuring GDP,defense spending, population, and technologyfor individual states (see graphic on page28). 6 Historically, emerging multipolarsystems have been more unstable than bipolaror even unipolar ones; the greater diversityand growing power of more countriesportends less cohesiveness and effectivenessfor the international system. Most emergingpowers already want a greater say and, alongwith many Europeans, dispute the notion ofany one power having the right to be ahegemon. The potential for less cohesivenessand more instability also is suggested by therelatively steeper declines in national powerof Europe and Japan.Although we believe chances are good thatChina and India will continue to rise, theirascent is not guaranteed and will requireovercoming high economic and socialhurdles. Because of this, both countries arelikely to remain inwardly focused and percapita wealth will lag substantially behindWestern economies throughout the period to2025 and beyond. Individuals in theseemerging economic powerhouses are likely tofeel still poor in relation to Westerners eventhough their collective GDP increasingly willoutdistance those of individual Westernstates. For Russia, remaining in the top tierwhere it has been since its remarkableresurgence during the late 1990s and earlypart of the 21st century may be extremely6 National Power scores are the product of an indexcombining the weighted factors of GDP, defensespending, population, and technology. Scores arecalculated by the International Futures computer modeland are expressed as a state’s relative share(percentage) of all global power.difficult. Demography is not always destiny,but diversifying the economy so that Russiacan maintain its standing after the worldtransitions away from dependence on fossilfuel will be central to its long-term prospects.Europe and Japan also will be confrontingdemographic challenges; decisions taken noware likely to determine their long-termtrajectories.Although the rise of no other state can equalthe impact of the rise of such populous statesas China and India, other countries withpotentially high-performing economies—Iran,Indonesia, and Turkey, for example—couldplay increasingly important roles on the worldstage and especially for establishing newpatterns in the Muslim world.“Few countries are poised to have moreimpact on the world over the next 15-20years than China.”Rising Heavyweights: China and IndiaChina: Facing Potential Bumps in theRoad. Few countries are poised to have moreimpact on the world over the next 15-20 yearsthan China. If current trends persist, by 2025China will have the world’s second largesteconomy and will be a leading militarypower. It could also be the largest importer ofnatural resources and an even greater polluterthan it is now.US security and economic interests couldface new challenges if China becomes apeer competitor that is militarily strong aswell as economically dynamic and energyhungry.The pace of China’s economic growth almostcertainly will slow, or even recede, even withadditional reforms to address mounting socialpressures arising from growing incomedisparities, a fraying social safety net, poorbusiness regulation, hunger for foreign29

energy, enduring corruption, andenvironmental devastation. Any of theseproblems might be soluble in isolation, butthe country could be hit by a “perfect storm”if many of them demand attention at the sametime. Even if the Chinese Government canmanage to address these issues, it will nothave the ability to assure high levels ofeconomic performance. Most of China’seconomic growth will continue to bedomestically driven, but key sectors rely onforeign markets, resources, and technology aswell as globalized production networks. As aresult, China’s economic health will beaffected by that of other economies—particularly the United States and the EU.In addressing these challenges, Chineseleaders must balance the openness necessaryto sustain economic growth—essential topublic tolerance for the Communist Party’smonopoly of political power—against therestrictions necessary to protect thatmonopoly. Facing so many social andeconomic changes, the Communist Party andits position are likely to undergo furthertransformations. Indeed, Communist Partyleaders themselves talk openly about the needto find new ways to retain public acceptanceof the Party’s dominant role. So far, however,these efforts do not appear to include openingthe system to free elections and a free press.Moreover, barring the “perfect storm”described above, we do not foresee socialpressures forcing real democracy in China by2025. That said, the country could be movingtoward greater political pluralism and moreaccountable governance.Chinese leaders could, however, continuemanaging tensions by achieving significantgrowth without jeopardizing the Party’spolitical monopoly, as they have for the pastthree decades. Although a protracted slumpcould pose a serious political threat, theregime would be tempted to deflect publiccriticism by blaming China’s woes on foreigninterference, stoking the more virulent andxenophobic forms of Chinese nationalism.Historically, people who becomeaccustomed to rising living standards reactangrily when their expectations are nolonger met, and few people have hadgrounds for such high expectations as dothe Chinese.China’s international standing is basedpartly on foreigners’ calculations that it is“the country of the future.” If foreignerstreat the country less deferentially,nationalistic Chinese could respondangrily.India: A Complicated Rise. Over the next15-20 years, Indian leaders will strive for amultipolar international system, with NewDelhi as one of the poles and serving as apolitical and cultural bridge between a risingChina and the United States. India’s growinginternational confidence, derived primarilyfrom its economic growth and its successfuldemocratic record, now drives New Delhitoward partnerships with many countries.However, these partnerships are aimed atmaximizing India’s autonomy, not at aligningIndia with any country or internationalcoalition.India probably will continue to enjoyrelatively rapid economic growth. AlthoughIndia faces lingering deficiencies in itsdomestic infrastructure, skilled labor, andenergy production, we expect the nation’srapidly expanding middle class, youthfulpopulation, reduced reliance on agriculture,and high domestic savings and investmentrates to propel continued economic growth.India’s impressive economic growth over thepast 15 years has reduced the number ofpeople living in absolute poverty, but the30

growing gap between rich and poor willbecome a more important political issue.We believe Indians will remain stronglycommitted to democracy, but the polity couldbecome more fragmented and fractious, withnational power being shared across successivepolitical coalitions. Future elections are likelyto be multi-sided affairs yielding awkwardcoalitions with unclear mandates. Thegeneral direction of India’s economicpolicymaking is unlikely to be reversed, butthe pace and scale of reform will fluctuate.Regional and ethnic insurgencies that haveplagued India since independence are likely topersist, but they will not threaten India’sunity. We assess New Delhi will remainconfident that it can contain the Kashmiriseparatist movement. However, India islikely to experience heightened violence andinstability in several parts of the countrybecause of the growing reach of the MaoistNaxalite movement.Indian leaders do not see Washington as amilitary or economic patron and now believethe international situation has made such abenefactor unnecessary. New Delhi will,however, pursue the benefits of favorable USties, partly, too, as a hedge against anydevelopment of hostile ties with China.Indian policymakers are convinced that UScapital, technology, and goodwill are essentialto India’s continued rise as a global power.The United States will remain one of India’slargest export destinations, the key tointernational financial institutions such as theWorld Bank and foreign commercial lending,and the largest source of remittances. TheIndian diaspora—composed largely of highlyskilled professionals—will remain a keyelement in deepening US-Indian ties. TheIndian market for US goods will growsubstantially as New Delhi reducesrestrictions on trade and investment. India’smilitary also will be eager to benefit fromexpanded defense ties with Washington.Indian leaders, however, probably will avoidties that could resemble an alliancerelationship.“Russia has the potential to be richer, morepowerful, and more self-assured in2025….[but] multiple constraints could limitRussia’s ability to achieve its full economicpotential.”Other Key PlayersRussia’s Path: Boom or Bust. Russia has thepotential to be richer, more powerful, andmore self-assured in 2025 if it invests inhuman capital, expands and diversifies itseconomy, and integrates with global markets.On the other hand, multiple constraints couldlimit Russia’s ability to achieve its fulleconomic potential. Chief among them are ashortfall in energy investment, keyinfrastructure bottlenecks, decaying educationand public health sectors, an underdevelopedbanking sector, and crime and corruption. Asooner-than-expected conversion toalternative fuels or a sustained plunge inglobal energy prices before Russia has thechance to develop a more diversifiedeconomy probably would constrain economicgrowth.Russia’s population decline by 2025 willforce hard policy choices. By 2017, forexample, Russia is likely to have only650,000 18-year-old males from which tomaintain an army that today relies on 750,000conscripts. Population decline also could takean economic toll with severe labor forceshortages, particularly if Russia does notinvest more in its existing human capital,rebuild its S&T base, and employ foreignlabor migrants.If Russia diversifies its economy, it coulddevelop a more pluralistic, albeit not31

democratic, political system—the result ofinstitutional consolidation, a rising middleclass, and the emergence of new stakeholdersdemanding a greater voice.A more proactive and influential foreignpolicy seems likely, reflecting Moscow’sreemergence as a major player on the worldstage; an important partner for Western,Asian, and Middle East capitals; and a leadingforce in opposition to US global dominance.Controlling key energy nodes and links in theCaucasus and Central Asia—vital to itsambitions as an energy superpower—will be adriving force in reestablishing a sphere ofinfluence in its Near Abroad. Sharedperceptions regarding threats from terrorismand Islamic radicalism could align Russianand Western security policies more tightly,notwithstanding disagreements on otherissues and a persisting “values gap.”The range of possible futures for Russiaremains wide because of starkly divergentforces—liberal economic trends and illiberalpolitical trends. The tension between the twotrends—together with Russia’s sensitivity topotential discontinuities sparked by politicalinstability, a major foreign policy crisis, orother wild cards—makes it impossible toexclude alternative futures such as anationalistic, authoritarian petro-state or evena full dictatorship, which is an unlikely butnevertheless plausible future. Less likely,Russia could become a significantly moreopen and progressive country by 2025.Europe: Losing Clout in 2025. We believeEurope by 2025 will have made slow progresstoward achieving the vision of current leadersand elites: a cohesive, integrated, andinfluential global actor able to employindependently a full spectrum of political,economic, and military tools in support ofEuropean and Western interests and universalideals. The European Union would need toresolve a perceived democracy gap dividingBrussels from European voters and move pastthe protracted debate about its institutionalstructures.The EU will be in a position to bolsterpolitical stability and democratization onEurope’s periphery by taking in additionalnew members in the Balkans, and perhapsUkraine and Turkey. However, continuedfailure to convince skeptical publics of thebenefits of deeper economic, political, andsocial integration and to grasp the nettle of ashrinking and aging population by enactingpainful reforms could leave the EU a hobbledgiant distracted by internal bickering andcompeting national agendas, and less able totranslate its economic clout into globalinfluence.The drop-off in working-age populations willprove a severe test for Europe’s social welfaremodel, a foundation stone of WesternEurope’s political cohesion since WorldWar II. Progress on economic liberalizationis likely to continue only in gradual steps untilaging populations or prolonged economicstagnation force more dramatic changes—acrisis point that may not hit before some timein the next decade and might be pushed offeven further. There are no easy fixes forEurope’s demographic deficits except likelycutbacks in health and retirement benefits,which most states have not begun toimplement or even to contemplate. Defenseexpenditures are likely to be cut further tostave off the need for serious restructuring ofsocial benefits programs. The challenge ofintegrating immigrant, especially Muslim,communities will become acute if citizensfaced with a sudden lowering of expectationsresort to more narrow nationalism andconcentrate on parochial interests, ashappened in the past.32

Europe’s strategic perspective is likely toremain narrower than Washington’s, even ifthe EU succeeds in making reforms thatcreate a “European President” and “EuropeanForeign Minister” and develops greaterinstitutional capacity for crisis management.Divergent threat perceptions within Europeand the likelihood that defense spending willremain uncoordinated suggest the EU will notbe a major military power by 2025. Thenational interests of the bigger powers willcontinue to complicate EU foreign andsecurity policy and European support forNATO could erode.The question of Turkey’s EU membershipwill be a test of Europe’s outward focusbetween now and 2025. Increasing doubtsabout Turkey’s chances are likely to slow itsimplementation of political and human rightsreforms. Any outright rejection risks widerrepercussions, reinforcing arguments in theMuslim world—including among Europe’sMuslim minorities—about the incompatibilityof the West and Islam. Crime could be thegravest threat inside Europe as Eurasiantransnational organizations—flush frominvolvement in energy and mineralconcerns—become more powerful andbroaden their scope. One or moregovernments in Eastern or Central Europecould fall prey to their domination.Europe will remain heavily dependent onRussia for energy in 2025, despite efforts topromote energy efficiency and renewableenergy and lower greenhouse gas emissions.Varying levels of dependence, differingperspectives on Russia’s democratic maturityand economic intentions, and failure toachieve consensus on Brussels’ role arehampering nascent efforts to develop commonEU polices on energy diversification andsecurity. In the absence of a collectiveapproach that would reduce Russia’sleverage, this dependence will foster constantattentiveness to Moscow’s interests by keycountries, including Germany and Italy, whosee Russia as a reliable supplier. Europecould pay a price for its heavy dependence,especially if Russian firms are unable to fulfillcontract commitments because ofunderinvestment in their natural gas fields orif growing corruption and organized criminalinvolvement in the Eurasian energy sectorspill over to infect Western business interests.Japan: Caught Between the US and China.Japan will face a major reorientation of itsdomestic and foreign policies by 2025 yetmaintain its status as an upper middle rankpower. Domestically, Japan’s political,social, and economic systems will likely berestructured to address its demographicdecline, an aging industrial base, and a morevolatile political situation. Japan’s decreasingpopulation may force authorities to considernew immigration policies like a long-termvisa option for visiting workers. TheJapanese, however, will have difficultyovercoming their reluctance to naturalizeforeigners. The aging of the population alsowill spur development in Japan’s healthcareand housing systems to accommodate largenumbers of dependent elderly.The shrinking work force—and Japan’scultural aversion to substantial immigrantlabor—will put a major strain on Japan’ssocial services and tax revenues, leading totax increases and calls for more competitionin the domestic sector to lower the price ofconsumer goods. We anticipate continuedrestructuring of Japan’s export industries,with increased emphasis on high technologyproducts, value-added production, andinformation technologies. The shrinking ofJapan’s agricultural sector will continue,perhaps down to just 2 percent of the laborforce, with a corresponding increase inpayments for food imports. The working-agepopulation, declining in absolute numbers,33

includes a large number of unemployed anduntrained citizens in their late teens and 20s.This could lead to a shortage of white collarworkers.With increasing electoral competition, Japan’sone-party political system probably will fullydisintegrate by 2025. The Liberal DemocraticParty may split into a number of contendingparties, but it is more likely that Japan willwitness a continual splitting and merging ofcompeting political parties, leading to policyparalysis.On the foreign front, Japan’s policies will beinfluenced most by the policies of China andthe United States, where four scenarios arepossible.In the first scenario, a China thatcontinues its current economic growthpattern will be increasingly important toJapan’s economic growth, and Tokyo willwork to maintain good political relationsand increase market access for Japanesegoods. Tokyo may seek a free tradeagreement with Beijing well before 2025.At the same time, China’s military powerand influence in the region will be ofincreasing concern to Japanesepolicymakers. Their likely response willbe to draw closer to the United States,increase their missile defense and antisubmarinewarfare capabilities, seek todevelop regional allies such as SouthKorea, and push for greater developmentof international multilateral organizationsin East Asia, including an East AsianSummit.In a second scenario, China’s economicgrowth falters or its policies becomeopenly hostile toward countries in theregion. In response, Tokyo would likelymove to assert its influence, in part byseeking to rally democratic states in EastAsia, and in part by continuing to developits own national power through advancedmilitary hardware. Tokyo would assumestrong support from Washington in thiscircumstance and would move to shapepolitical and economic forums in theregion to isolate or limit Chineseinfluence. This would cause states in theregion to make a difficult choice betweentheir continued unease with Japanesemilitary strength and a China that has thepotential to dominate nearly all nationsnear its borders. As a result, Japan mightfind itself dealing with an ad-hoc nonalignedmovement of East Asian statesseeking to avoid being entrapped by eitherTokyo or Beijing.In a third scenario, should the UnitedStates’ security commitment to Japanweaken or be perceived by Tokyo asweakening, Japan may decide to movecloser to Beijing on regional issues andultimately consider security arrangementsthat give China a de facto role inmaintaining stability in ocean areas nearJapan. Tokyo is highly unlikely torespond to a loss of the US securityumbrella by developing a nuclearweapons program, short of clearlyaggressive intent by China toward Japan.A fourth scenario would see the UnitedStates and China move significantlytoward political and security cooperationin the region, leading to USaccommodation of a Chinese militarypresence in the region and acorresponding realignment or drawdownof US forces there. In this case, Tokyoalmost certainly would follow theprevailing trend and move closer toBeijing to be included in regional securityand political arrangements. Similarly,others in the region, including SouthKorea, Taiwan, and ASEAN memberslikely would follow such a US lead,putting further pressure on Tokyo to align34

its policies with those of the other actorsin the region.Brazil: Solid Foundation for an EnhancedLeadership Role. By 2025 Brazil probablywill be exercising greater regional leadership,as first among equals in South American fora,but aside from its growing role as an energyproducer and its role in trade talks, it willdemonstrate limited ability to project beyondthe continent as a major player in worldaffairs. Its progress in consolidatingdemocracy and diversifying its economy willserve as a positive regional model.The country’s maturing commitment todemocracy is on a secure footing with fair andopen electoral processes and smoothtransitions having become routine. Thecurrent President, Lula da Silva, has a strongsocialist orientation and has pursued amoderate policy course domestically andinternationally, setting a positive precedentfor his successors. Brazilian views about theimportance of playing a key role as both aregional and world leader have largelybecome ingrained in the nationalconsciousness and transcend party politics.Economically, Brazil has established a solidfoundation for steady growth based onpolitical stability and an incremental reformprocess. The growing consensus forresponsible fiscal and monetary policy islikely to lessen the disruptions from crisesthat have plagued the country in the past.Dramatic departures from the currenteconomic consensus in Brazil, either a radicalturn toward a free-market and free tradeorientedeconomic model or a heavy-handedstatist orientation, appear to be unlikely by2025.Brazil’s recent preliminary finds of new,possibly large offshore oil deposits have thepotential to add another dynamic to an alreadydiversified economy and put Brazil on a morerapid economic growth path. The oildiscoveries in the Santos Basin—potentiallyholding tens of billions of barrels ofreserves—could make Brazil after 2020 amajor oil exporter when these fields are fullyexploited. Optimistic scenarios, whichassume a legal and regulatory frameworkattractive to foreign investment, project oilrising to a 15 percent share of GDP by 2025;even then, petroleum would only complementexisting sources of national wealth.“The oil discoveries in the Santos Basin—potentially holding tens of billions of barrelsof reserves—could make Brazil after 2020 amajor oil exporter…”Progress on social issues, such as reducingcrime and poverty, will likely play a decisiverole in determining Brazil’s future leadershipstatus. Without advances in the rule of law,even rapid economic growth will be undercutby the instability that results from pervasivecrime and corruption. Mechanisms toincorporate a growing share of the populationinto the formal economy also will be neededto buttress Brazil’s status as a modernizingworld power.Up-and-Coming PowersOwing to the large populations and expansivelandmasses of the new powers like India andChina, another constellation of powerhousesis unlikely to erupt on the world scene overthe next decade or two. However, up-andcomingdeveloping states could account foran increasing proportion of the world’seconomic growth by 2025. Others also willplay a dynamic role in their ownneighborhoods.Indonesia, Turkey and a post-clerically runIran—states that are predominantly Islamic,but which fall outside the Arab core—appearwell-situated for growing international roles.A growth-friendly macro-economic policy35

climate would allow their natural economicendowments to flourish. In the case of Iran,radical political reform will be necessary.Indonesia’s performance will depend uponwhether it can replicate its success at politicalreform with measures to spur the economy.In the past decade, Indonesians havetransformed their once-authoritarian countryinto a democracy, turning the vast archipelagointo a place of relative calm where support formoderate political solutions is strong,separatist movements are largely fading away,and terrorists, finding little public support, areincreasingly found and arrested. Withabundant natural resources and a largepopulation of potential consumers (it is theworld’s fourth most populous country),Indonesia could rise economically if itselected leaders take steps to improve theinvestment climate, including strengtheningthe legal system, improving the regulatoryframework, reforming the financial sector,reducing fuel and food subsidies, andgenerally lowering the cost of doing business.Looking at Iran—a state rich in natural gasand other resources and high in humancapital—political and economic reform inaddition to a stable investment climate couldfundamentally redraw both the way the worldperceives the country and also the way inwhich Iranians view themselves. Under thosecircumstances, economic resurgence couldtake place quickly in Iran and embolden alatent cosmopolitan, educated, at timessecular Iranian middle-class. If empowered,this portion of the population could broadenthe country’s horizons, particularly eastwardand away from decades of being mired in theArab conflicts of the Middle East.Turkey’s recent economic track record ofincreased growth, the vitality of Turkey’semerging middle class and its geostrategiclocale raise the prospect of a growing regionalrole in the Middle East. Economicweaknesses such as its heavy dependence onexternal energy sources may help to spur ittoward a greater international role as Turkishauthorities seek to develop their ties withenergy suppliers—including close neighborsRussia and Iran—and bolster its position as atransit hub. Over the next 15 years, Turkey’smost likely course involves a blending ofIslamic and nationalist strains, which couldserve as a model for other rapidlymodernizing countries in the Middle East.36

Global Scenario I: A WorldWithout the WestIn this fictionalized account, the new powerssupplant the West as leaders on the worldstage. This is not inevitable nor the onlypossible outcome of the rise of new states.Historically the rise of new powers—such asJapan and Germany in the late 19 th and early20th centuries—presented stiff challenges tothe existing international system, all of whichended in worldwide conflict. More plausiblein our minds than a direct challenge to theinternational system is the possibility that theemerging powers will assume a greater role inareas affecting their vital interests,particularly in view of what may be growingburden fatigue for Western countries.Such a coalition of forces could be acompetitor to institutions like NATO, offeringothers an alternative to the West. As detailed,we do not see these alternative coalitions asnecessarily permanent fixtures of the newlandscape. Indeed, given their diverseinterests and competition over resources, thenewer powers could as easily distancethemselves from each other as come together.Although the emerging powers are likely tobe preoccupied with domestic issues andsustaining their economic development,increasingly, as outlined in this chapter, theywill have the capacity to be global players.Preconditions for this scenario include:Lagging Western growth prompts the USand Europe to begin taking protectionistmeasures against the faster-growingemerging powers.Different models of state-societyrelationships help underpin the powerful(albeit fragile) Sino-Russia coalition.Tensions between the principal actors inthe multipolar world are high as statesseek energy security and strengthenedspheres of influence. The ShanghaiCooperation Organization (SCO),especially, seeks reliable and dependableclients in strategic regions—and CentralAsia is in both Russia’s and China’sbackyards.37

Letter from Head of Shanghai Cooperation Organizationto Secretary-General of NATOJune 15, 2015I know we meet tomorrow to inaugurate our strategic dialogue, but I wanted to sharewith you beforehand my thoughts about the SCO and how far we have come. Fifteen to20 years ago, I would never have imagined the SCO to be NATO’s equal—if not (pattingmyself on the back) an even somewhat more important international organization. Justbetween ourselves, we were not destined for “greatness” except for the West’s stumbling.I think it is fair to say it began when you pulled out of Afghanistan without accomplishingyour mission of pacifying the Taliban. I know you had little choice. Years of slow orno growth in the US and West had decimated defense budgets. The Americans feltoverstretched and the Europeans were not going to stay without a strong US presence.The Afghan situation threatened to destabilize the whole region, and we could not standidly by. Besides Afghanistan, we had disturbing intelligence that some “friendly” CentralAsian governments were coming under pressure from radical Islamic movements andwe continue to depend on Central Asian energy. The Chinese and Indians were veryreluctant to throw their hats into the ring with my homeland—Russia—but they didnot have better options. None of us wanted the other guy to be in charge: we were sosuspicious of each other and, if truth be told, continue to be.The so-called SCO “peacekeeping” action really put the SCO on the map and got usoff the ground. Before that, it was an organization where “cooperation” was a bit of amisnomer. It would have been more aptly called the “Shanghai Organization of MutualDistrust.” China did not want to offend the US, so it did not go along with Russia’s anti-American efforts. India was there to keep an eye on both China and Russia. The CentralAsians thought they could use the SCO for their own purpose of playing the neighboringbig powers off against one another. Iran’s Ahmedi-Nejad would have joined anything witha whiff of anti-Americanism.Still, even with these operations, the SCO would not have become a “bloc” if it had notbeen for the rising antagonism shown by the US and Europe toward China. China’sstrong ties to the US had oddly enough provided Beijing with legitimacy. China alsobenefited from a strong US presence in the region; Beijing’s Asian neighbors would havebeen much more worried about China’s rise if they had not had the US as a hedge. Chinaand India were content with the status quo and did not want to get into a strong alliancewith us Russians for fear of antagonizing the US. As long as that status quo held, theSCO’s prospects as a “bloc” were limited.Then came the growing protectionist movements in the US and Europe led by a coalitionof forces from left to right along the political spectrum. Chinese investments cameunder greater scrutiny and increasingly were denied. The fact that China and Indiabecame first adopters of so many new technologies—next generation Internet, cleanwater, energy storage, biogerontechnology, clean coal, and biofuels—only added to the427343ID 11-08

economic-driven frustration. Protectionist trade barriers were put up. Somebody otherthan “the West” had to pay a price for that recession which dragged on there but not somuch elsewhere. China’s military modernization was seen as a threat and there wasa lot of loose talk in the West about the emerging powers piggy-backing off the UnitedStates’ protection of the sea lanes. Needless to say, the West’s antagonism sparked anationalistic movement in China.Interestingly, we Russians watched this from the sidelines without knowing what to do.We were pleased to see our good friends in the West take an economic drubbing. Itwas still nothing like what we went through in the 1990s and, of course, we took a hit asenergy prices sagged with the recession in the West. But we had accumulated a lot ofreserves before then.In the end, these events were a godsend because they forced Russia and China intoeach other’s arms. Before, Russia had been more distrustful of China’s rise than theUnited States. Yes, we talked big about shifting all our energy supplies eastward to scarethe Europeans from time to time. But we also played China off against Japan, danglingpossibilities and then not following through. Our main worry was China. Fears aboutChina’s overrunning Russia’s Far East were a part of it, but I think the bigger threat fromour standpoint was of a more powerful China—for example, one that would not foreverhide behind Russia’s skirts at the UN. The Soviet-China split was always lurking too. Ipersonally was angered by endless Chinese talk about not repeating Soviet mistakes.That hurt. Not that the Chinese weren’t right, but to admit we had failed when they mightsucceed—that struck at Russian pride.But now this is all behind us. Having technology that allowed for the clean use of fossilfuels was a godsend. Whether the West gave it to us, or as we were accused of doing,we stole it, is immaterial. We saw a chance to cement a strong tie—offering the Chineseopportunities for a secure energy supply and less reliance on seaborne supplies fromthe Middle East. They reciprocated with long-term contracts. We also learned how tocooperate in Central Asia instead of trying to undermine each other by our actions withvarious regimes. Seeing a strong Sino-Russian partnership arise, the others—India, Iran,etc.—did not want to be left out of the picture and have rallied around us. Of course, ithelps that US and European protectionists lumped India with China, so there really wasnot much left for them to do.How stable is our relationship? Don’t quote me, but this is not a new Cold War. Sure, wetalk a great game about state capitalism and authoritarianism, but it is no ideology likeCommunism. And it is in our mutual interests that democracy not break out in CentralAsia as China and Russia would be the targets of any such uprisings. I can’t say that weRussians and Chinese really like each other much more than before. In fact, both of ushave to worry about our respective nationalisms getting in the way of mutual interests.Let’s put it this way: the Russian and Chinese peoples are not enamored with oneanother. Russians want to be respected as Europeans, not Eurasians, and China’s elitesare still in their hearts geared toward the West. But temporary expedients have beenknown to grow into permanence, you know?427343ID 11-08

The international system will be challengedby growing resource constraints at the sametime that it is coping with the impact of newplayers. Access to relatively secure and cleanenergy sources and management of chronicfood and water shortages will assumeincreasing importance for a growing numberof countries during the next 15-20 years.Adding well over a billion people to theworld’s population by 2025 will itself putpressure on these vital resources. Anincreasing percentage of the world’spopulation will be moving from rural areas tourban and developed ones to seek greaterpersonal security and economic opportunity.Many—particularly in Asia—will be joiningthe middle class and will be seeking toemulate Western lifestyles, which involvegreater per capita consumption of all theseresources. Unlike earlier periods whenresource scarcities loomed large, thesignificant growth in demand from emergingmarkets, combined with constraints on newproduction—such as the control exerted nowby state-run companies in the global energymarket—limits the likelihood that marketforces alone will rectify the supply-anddemandimbalance.The already stressed resource sector will befurther complicated and, in most cases,exacerbated by climate change, whosephysical effects will worsen throughout thisperiod. Continued escalation of energydemand will hasten the impacts of climatechange. On the other hand, forcibly cuttingback on fossil fuel use before substitutes arewidely available could threaten continuedeconomic development, particularly forcountries like China whose industries havenot yet achieved high levels of energyefficiency. Technological advances andpolicy decisions around the world germane togreenhouse gas emissions over the next 15years are likely to determine whether theglobe’s temperature ultimately rises morethan 2 degree centigrade—the threshold atwhich effects are thought to be no longermanageable.Food and water also are intertwined withclimate change, energy, and demography.Rising energy prices increase the cost forconsumers and the environment of industrialscaleagriculture and application ofpetrochemical fertilizers. A switch from useof arable land for food to fuel crops providesa limited solution and could exacerbate boththe energy and food situations. Climatically,rainfall anomalies and constricted seasonalflows of snow and glacial melts areaggravating water scarcities, harmingagriculture in many parts of the globe.Energy and climate dynamics also combine toamplify a number of other ills such as healthproblems, agricultural losses to pests, andstorm damage. The greatest danger may arisefrom the convergence and interaction of manystresses simultaneously. Such a complex andunprecedented syndrome of problems couldoverload decisionmakers, making it difficultfor them to take actions in time to enhancegood outcomes or avoid bad ones.The Dawning of a Post-Petroleum Age?By 2025 the world will be in the midst of afundamental energy transition—in terms ofboth fuel types and sources. Non-OPECliquid hydrocarbon production (i.e., crude oil,natural gas liquids, and unconventionals suchas tar sands) will not be able to growcommensurate with demand. The productionlevels of many traditional energy producers—Yemen, Norway, Oman, Colombia, the UK,Indonesia, Argentina, Syria, Egypt, Peru,Tunisia—are already in decline. Others’production levels—Mexico, Brunei,Malaysia, China, India, Qatar—haveflattened. The number of countries capable ofmeaningfully expanding production willdecline. Only six countries—Saudi Arabia,Iran, Kuwait, the UAE, Iraq (potentially), and41

Russia—are projected to account for 39percent of total world oil production in 2025.The major producers increasingly will belocated in the Middle East, which containssome two-thirds of world reserves. OPECproduction in the Persian Gulf countries isprojected to grow by 43 percent during 2003-2025. Saudi Arabia alone will account foralmost half of all Gulf production, an amountgreater than that expected from Africa and theCaspian area combined.A partial consequence of this growingconcentration has been increased control ofoil and gas resources by national oilcompanies. When the Club of Rome made itsfamous forecast of looming energy scarcities,the “Seven Sisters” still had a strong influenceon global oil markets and production. 7Driven by shareholders, they responded toprice signals to explore, invest, and promotetechnologies necessary to increase production.By contrast, national oil companies havestrong economic and political incentives tolimit investment in order to prolong theproduction horizon. Keeping oil in theground provides resources for futuregenerations in oil states that have limited theireconomic options.The number and geographic distribution of oilproducers will decrease concurrent withanother energy transition: the move tocleaner fuels. The prized fuel in the shorterterm likely will be natural gas. By 2025,consumption of natural gas is expected togrow by about 60 percent, according toDoE/Energy Information Agency projections.Although natural gas deposits are notnecessarily co-located with oil, they are7 The “Seven Sisters” refers to seven Western oilcompanies that dominated mid-20 th century oilproduction, refining, and distribution. With theformation and establishment of OPEC in the 1960s and1970s, the Western oil companies’ influence and cloutdeclined.highly concentrated. Three countries—Russia, Iran, and Qatar—hold over 57 percentof the world’s natural gas reserves.Considering oil and natural gas together, twocountries—Russia and Iran—emerge asenergy kingpins. Nevertheless, NorthAmerica (the US, Canada, and Mexico) isexpected to produce an appreciableproportion—18 percent—of total worldproduction by 2025.“Aging populations in the developed world;growing resource constraints in energy,food, and water; and worries about climatechange are likely to color what will continueto be an historically unprecedented age ofprosperity.”Even though the use of natural gas is likely togrow steadily in absolute terms, coal may bethe fastest growing energy source despitebeing the “dirtiest.” Rising prices for oil andnatural gas would put a new premium onenergy sources that are cheap, abundant, andclose to markets. Three of the largest andfastest-growing energy consumers—the US,China, and India—and Russia possess thefour largest recoverable coal reserves,representing 67 percent of known globalreserves. Increased coal production couldextend non-renewable carbon-based energysystems for one or even two centuries. Chinawill still be very dependent on coal in 2025and Beijing is likely to be under increasinginternational pressure to use cleantechnologies to burn it. China is overtakingthe US in the amount of carbon emissions itputs in the atmosphere despite its muchsmaller GDP.The use of nuclear fuel for electrical powergeneration is expected to expand, but theincrease will not be sufficient to fill growingdemand for electricity. Third-generationnuclear reactors have lower costs of power42

Breakdown of Likely Energy SourcesCoalGasHydroOther RenewablesOilNuclearBiomassMillions of barrels per day1816141210864201980 90 2000 10 20 30Note: Global demand grows by more than half over the next quarter of a century,with coal use rising in absolute terms.Source: PFC Energy International.423711AI 11-08generation, improved safety characteristics,and better waste and proliferationmanagement features than previous reactordesigns. Third-generation nuclear reactorsare economically competitive at presentelectricity prices and are beginning to bedeployed around the world. Although mostnuclear power plants are currently inindustrialized countries, growing demand forelectricity in China, India, South Africa andother rapidly growing countries will increasethe demand for nuclear power.The supply of uranium, which is the principalfeedstock for nuclear power, is unlikely tolimit the future deployment of nuclear power.Available uranium is likely to be sufficient tosupport the expansion of nuclear energywithout reprocessing well into the second halfof the century. If uranium should prove to bein short supply, reactors capable of breedingnuclear fuels, along with recycling of usedfuels, could continue to support the globalexpansion of nuclear energy.However, because of its infrastructurerequirements, concern over proliferation ofnuclear expertise and material, anduncertainty over licensing and spent fuel43

Timing is EverythingAll current technologies are inadequate for replacing traditional energy architectures on the scaleneeded, and new energy technologies probably will not be commercially viable and widespread by2025 (see foldout). The present generation of biofuels is too expensive to grow, would further boostfood prices, and their manufacture consumes essentially the same amount of energy they produce.Other ways of converting nonfood biomass resources to fuels and chemical products should be morepromising, such as those based on high-growth algae or agricultural waste products, especiallycellulosic biomass. Development of clean coal technologies and carbon capture and storage isgaining momentum and—if such technologies were cost-competitive by 2025—would enable coal togenerate more electricity in a carbon-constrained regulatory environment. Long-lasting hydrogenfuel cells have potential, but they remain in their infancy and are at least a decade away fromcommercial production. Enormous infrastructure investment might be required to support a“hydrogen economy.” An Argonne National Laboratory study found that hydrogen, from well totank, is likely to be at least twice as costly as gasoline.Even with the favorable policy and funding environment that would be needed for biofuels, cleancoal, or hydrogen, major technologies historically have had an “adoption lag.” A recent study foundthat in the energy sector, it takes an average of 25 years for a new production technology to becomewidely adopted. A major reason for this lag is the need for new infrastructure to handle majorinnovation. For energy in particular, massive and sustained infrastructure investments made foralmost 150 years encompass production, transportation, refining, marketing, and retail activities.Adoption of natural gas, a fuel superior to oil in many respects, illustrates the difficulty of a transitionto something new. Technologies to use natural gas have been widely available since at least the1970s, yet natural gas still lags crude oil in the global market because the technical and investmentrequirements for producing and transporting it are greater than they are for oil-based fuels.Simply meeting baseline energy demand over the next two decades is estimated to require more than$3 trillion of investment in traditional hydrocarbons by companies built up over more than a centuryand with market capitalizations in the hundreds of billions of dollars. Because a new form of energyis highly unlikely to use existing infrastructure without modifications, we expect any new form ofenergy to demand similarly massive investment.Despite what are seen as long odds now, we cannot rule out the possibility of a transition by 2025that would avoid the costs of an infrastructure overhaul. The greatest possibility for a relativelyquick and inexpensive transition during that period comes from better renewable generation sources(photovoltaic and wind) and improvements in battery technology. With many of these technologies,the infrastructure cost hurdle for individual projects would be lower, enabling many small economicactors to develop their own energy transformation projects that directly serve their interests—e.g.,stationary fuel cells powering homes and offices, recharging plug-in hybrid autos, and selling energyback to the grid. Also, energy conversion schemes—such as plans to generate hydrogen forautomotive fuel cells from electricity in a homeowner’s garage—could avoid the need to developcomplex hydrogen transportation infrastructure. Similarly, non-ethanol biofuels derived fromgenetically modified feed stocks may be able to leverage the considerable investment in liquidpetroleum transport and distribution infrastructure.44

processing, expansion of nuclear powergeneration by 2025 to cover anywhere nearthe increasing demand would be virtuallyimpossible. The infrastructure (human andphysical), legal (permitting), and constructionhurdles are just too big. Only at the end ofour 15-20 year period are we likely to see aserious ramp up of nuclear technologies.The Geopolitics of EnergyBoth high and low energy price levels wouldhave major geopolitical implications and,over the course of 20 years, periods of bothcould occur. DoE’s Energy InformationAdministration and several leading energyconsultants believe higher price levels arelikely, at least to 2015, because of plateauingsupply and growing demand. These causesare unlike the case in 1970s and early 1980swhen high oil prices were caused by anintentional restriction in supply. Even withthe overall secular rise in energy costs, priceswell below $100 a barrel are periodicallylikely with the expected increased volatilityand need not come about as a result oftechnological breakthroughs and rapidcommercialization of a substitute fuel.Plausible scenarios for a downward shift andchange in market psychology include slowingglobal growth; increased production in Iraq,Angola, Central Asia, and elsewhere; andgreater energy efficiencies with currentlyavailable technology.“With high prices, major exporters such asRussia and Iran would have the financialresources to increase their nationalpower…”Even at prices below $100 a barrel, financialtransfers connected with the energy tradeproduce clear winners and losers. Most of the32 states that import 80 percent or more oftheir energy needs are likely to experiencesignificantly slower economic growth thanthey might have achieved with lower oilprices. A number of these states have beenidentified by outside experts as at risk of statefailure—the Central African Republic,DROC, Nepal, and Laos, for example. Statescharacterized by high import dependence, lowGDP per capita, high current account deficits,and heavy international indebtedness form aparticularly perilous state profile. Such aprofile includes most of East Africa and theHorn. Pivotal yet problem-beset countries,such as Pakistan, will be at risk of statefailure.With higher prices, more stable countries farebetter but their prospects for economic growthwould drop somewhat and political turbulencecould occur. Efficient, service-sector orientedOECD economies are not immune but areharmed the least. China, though cushioned byits massive financial reserves, would be hit byhigher oil prices, which would make liftingmillions more out of poverty more difficult.China also would need to mine and transportmore domestic coal, build more nuclearpower plants, and seek to improve energyend-use efficiencies to offset the higher pricedimports.With high prices, major exporters such asRussia and Iran would have the financialresources to increase their national power.The extent and modalities of steps to increasetheir power and influence would depend onhow they used their profits to invest in humancapital, financial stabilization, and economicinfrastructure. Judicious application ofRussia’s increased revenues to the economy,social needs, and foreign policy instrumentswould likely more than double Russia’sstanding as measured by an academic nationalpower index.A sustained plunge in oil prices would havesignificant implications for countries relyingon robust oil revenues to balance the budgetor build up domestic investment. For Iran, a45

Winners and Losers in a Post-Petroleum WorldWe believe the most likely occurrence by 2025 is a technological breakthrough that will providean alternative to oil and natural gas, but implementation will lag because of the necessaryinfrastructure costs and need for longer replacement time. However, whether the breakthroughoccurs within the 2025 time frame or later, the geopolitical implications of a shift away from oiland natural gas will be immense.Saudi Arabia will absorb the biggest shock, as its leaders will be forced to tighten up on thecosts of the royal establishment. The regime could face new tensions with the Wahabiestablishment as Riyadh seeks to promote a series of major economic reforms—includingwomen’s full participation in the economy—and a new social contract with its public as ittries to institute a work ethic to accelerate development plans and diversify the economy.In Iran, the drop in oil and gas prices will undermine any populist economic policies.Pressure for economic reform will increase, potentially putting pressure on the clericalgoverning elite to loosen its grip. Incentives to open up to the West in a bid for greaterforeign investment, establishing or strengthening ties with Western partners—including withthe US—will increase. Iranian leaders might be more willing to trade their nuclear policiesfor aid and trade.For Iraq, emphasis on investing in non-oil sectors of its economy will increase. The smaller Gulfstates, which have been making massive investments designed to transform themselves intoglobal tourist and transport hubs, are likely to manage the transition well, bolstered by theirrobust sovereign wealth funds (SWFs). Across the Arab world, SWFs are being deployed todevelop non-oil sectors of the economy in a race against oil as a diminishing asset.Outside the Middle East, Russia will potentially be the biggest loser, particularly if its economyremains heavily tied to energy exports, and could be reduced to middle power status. Venezuela,Bolivia, and other petro-populist regimes could unravel completely, if that has not occurredbeforehand because of already growing discontent and decreasing production. Absent supportfrom Venezuela, Cuba might be forced to begin China-like market reforms.Early oil decline states—those exporters which had peaked or were declining as is currently thecase with Indonesia and Mexico—may be better prepared to shift the focus of their economicactivities and diversify into non-energy sectors.46

Page 1 of 2Technology Breakthroughs a by 2025Probable Possible PlausibleWhat Is theTechnology?Ubiquitous computing will be enabledby widespread tagging and networkingof mundane objects (the Internetof Things) such as food packages,furniture, room sensors, and paperdocuments. Such items will belocated and identified, monitored, andremotely controlled through enablingtechnologies—including RadioFrequency Identifications, sensornetworks, tiny embedded servers,and energy harvesters—connectedvia the next-generation Internet usingabundant, low cost, and high-powercomputing.Clean water technologies comprise a range oftechnologies that enable faster and more energyefficient treatment of fresh water and wastewater, and desalination of brackish and seawater, to provide sustainable and diverse watersources useable for domestic, agricultural, andindustrial purposes. The technologies includeadvances in existing technologies such asmembrane bioreactors and a range of materials’substitutions and advances in other separationand purification technologies driven by theunique chemical and physical properties ofnanoparticles and nanofibers.Energy storage technology encompassesa wide range of materials andtechniques for storing energy, anecessity for the viability of manyalternatives to fossil-fuel energysources. Included are battery materials,ultracapacitors and hydrogen storagematerials (particularly for fuel cells).Efficient energy storage will enable theon-demand energy component ofa variety of systems such as hydrogenbasedenergy systems, a host ofrenewable (but intermittent) energysources such as wind and solar, andlow-emission transport vehicles.“Biogerontechnology” is the sciencerelated to the study of the cellular andmolecular basis of disease and agingapplied to the development of newtechnological means for identifyingand treating diseases and disabilitiesassociated with old age. Supportingtechnologies include improvementsin biosensors for real-timemonitoring of human health, robustinformation technology, ubiquitousDNA sequencing and DNA-specificmedicine, and fully targeted drugdeliverymechanisms.Clean coal technologies include variouscombinations of carbon capturesequestration (CCS) to prohibitCO2—a byproduct of burning coal—from entering the atmosphere; coalconversion into syngas (gasification);and processes to convert syngas tohydrocarbons. CCS can reduce orpossibly eliminate greenhouse gasemissions from a coal plant. Coalgasification improves efficiency whengenerating electricity and emits fewerpollutants relative to coal burning plants.The syngas also can be a feedstockfor transportation fuels and industrialchemicals that replace petroleumderivedproducts.What Are Driversand Barriers?Key Drivers: Demand for greaterefficiency in a wide variety ofapplications from food safety to moreefficient supply chains and logistics.Corporations, governments, andindividuals will benefit in areas such asenergy efficiency and security, qualityof life, and early warning of equipmentmaintenance needs.Key Drivers: Clean water is set to become theworld’s scarcest but most-needed naturalresource because of new demands resultingfrom population increases and expectations thatclimate changes will reduce natural fresh watersources in some areas. Demand will increase forwater for domestic use, as well as for agriculture(including new biopharma and biofuel crops) andindustry processes.Key Drivers: High fossil fuel energyprices, the desire to reduce dependencyon foreign energy sources, andpressure to increase renewable energysources drive the development ofthese technologies.Key Drivers: Aging populations,increasingly expensive medicalcosts, and the desire to keep olderworkers in the work force drive thedevelopment of these technologies.Key Drivers: The desire to reducedependence on foreign energy sourcesdrives interest in expanding the use ofavailable coal reserves, while pressurefor clean energy production requiresdevelopment of CCS methods.Key Barriers: Implementation dependson availability of power for small,maintenance-free devices, developmentof profitable business models, andaddressing likely major privacy andsecurity concerns.Key Barriers: The demand for sustainableclean water supplies will only be met if bothlarge- and small-scale systems can overcomecost constraints—both in terms of energyrequirements and infrastructure costs.Key Barriers: Development anddeployment of the technologiesare restricted by material science,the unknown cost of large-scalemanufacturing, and infrastructureinvestment costs.Key Barriers: Cost of development,lengthy human trials, privacyconcerns, possible difficultiesof insurance, and religious andsocial concerns will inhibit theirdevelopment.Key Barriers: Substantial technology andcost barriers exist for CCS scale-up andimplementation for coal power plants,while uncertainties in both the oil marketand environmental regulatory landscapepreclude investment in expensive coalgasification plants (even without CCS).Why Is the Technologya Game-Changer?These technologies could radicallyaccelerate a range of enhancedefficiencies, leading to integration ofclosed societies into the informationage and security monitoring of almostall places. Supply chains would bestreamlined with savings in costsand efficiencies that would reducedependence upon human labor.Although the Earth contains a plentiful supplyof water, only 1 percent is fit or available forhuman consumption and some 20 percent ofthe world’s population does not have access tofresh drinking water. Regions experiencing waterscarcity will increase as the global populationincreases and as climate change induceddroughts occur. Both developing and developedcountries will be affected. Various industriesincreasingly will compete for water, includingagriculture, food, and beverage processingplants as well as chemical, pharmaceutical,and semiconductor industries. First moversto develop and deploy cheap energy-efficientclean-water technologies could gain hugegeopolitical advantage.The ability to store and use energyon demand from a combination ofalternative energy sources offers asignificant potential to lead a paradigmshift away from fossil fuels, resulting insignificant global economic and socialadvantages to first commercializers.With widespread deployment, theresult could be destabilizing to rentiereconomies dependant upon fossil fuels.Deployment would shift the cost,allocation, and use of healthcareresources. Nations will be challengedas a result of the changingdemographic structures and newpsychologies, behaviors and activitypatterns of aging yet healthy citizensand the concomitant need toformulate new national economicand social policies.A successful accelerated and rapiddeployment of clean coal technologycould pose a major challenge to otherhydrocarbon (predominately oil) energymarkets and nascent renewableenergy markets. This would change thedependency of coal rich/oil poor nationson imported oil/gas with a resultingsignificant shift in national interests.a These breakthroughs are categorized based upon the development and initial deployment of the technology. In some cases, full deployment may lag significantly due to infrastructure requirements.Source: SRI Consulting Business Intelligence and Toffler Associates.47427436ID 11-08

Page 2 of 2Technology Breakthroughs a by 2025Probable Possible PlausibleWhat Is theTechnology?Human strength augmentation technologies involvemechanical and electronic systems that supplementhuman physical capabilities. They include wearableexoskeletons with mechanical actuators at hips,elbows, and other skeletal joints. At the extreme anexoskeleton could resemble a wearable humanoidrobot that uses sensors, interfaces, power systems,and actuators to monitor and respond to armand leg movements, providing the wearer withincreased strength and control.Biofuels technology is used to produce ethanol fromcrops such as corn and sugarcane and biodiesel fromcrops such as grapeseed and soy. Next-generationprocesses will convert lignocellulosic materials tofuels. Significant potential also exists to cultivatehigh-growth microalgae for conversion to biodiesel andother biofuels.Service robotics comprise robots and unmannedvehicles for non-manufacturing applications, usinga large number of enabling technologies includinghardware (e.g. sensors, actuators, power systems)and software platforms (advanced systems mightincorporate behavioral algorithms and artificialintelligence). These technologies would enable awide variety of remote controlled, semiautonomous(with human intervention), and completelyautonomous robotic systems.Human cognitive augmentation technologies includedrugs, implants, virtual learning environments,and wearable devices to enhance humancognitive abilities. Training software exploitsneuroplasticity to improve a person’s naturalabilities, and wearable and implantable devicespromise to improve vision, hearing, and evenmemory. Bio and information technologiespromise enhanced human mental performanceat every life stage.What Are Driversand Barriers?Key Drivers: Demand for enhanced strength,endurance, and physical security for assisting thehandicapped and elderly, and for reducing relianceon manual labor drive these technologies.Key Drivers: High crude oil prices, the desire to reducedependency on foreign oil sources, and governmentpolicies to increase renewable energy sources drivethese technologies.Key Drivers: Security and safety applications,healthcare or home care for aging populations,and the desire to improve manufacturingproductivity and reduce demand for servicelabor drive these technologies.Key Drivers: Desires for improved military planning,combatant performance, treatment of Alzheimer’sdisease, increasing education effectiveness,enhanced personal entertainment, and improvingjob performance could spur the development ofthese technologies.Key Barriers: The cost of manufacturing and theuncertain economic payoff, challenges with portablepower sources, and humans’ ability to accept anduse the technology all constrain development anddeployment of the technologies.Key Barriers: Development and deployment of thetechnologies are restricted by land use, wateravailability, competition from food applications, andthe challenge of scaling up for large-scale production.Biofuels under development today are moresustainable, but production costs are still too high.Key Barriers: Development of viable businessmodels, cost, uncertain technology reach(portable power sources and especially artificialintelligence), and integration issues (e.g. IT,robot standards), inhibit the deployment ofservice robots.Key Barriers: Cultural hesitancy to go down an“unnatural” path of human development, and fearsof unknown effects could slow down developmentand deployment. Major scientific and medicalresearch challenges would need to be overcome.Why Is the Technologya Game-Changer?Biomechanical devices promise to give a personsuperhuman strength and endurance or restorea disabled person’s capabilities. The widespreaduse of the technology would greatly improve laborproductivity by reducing the number of humansneeded for a task or increasing the amount of worka single human can accomplish, while enablingunassisted activity by the disabled or elderly. Suchtechnologies also could greatly improve the combateffectiveness of ground combat forces.A large-scale move to energy-efficient biofuelscould reduce demand for oil and ease internationalcompetition for world oil supplies and reserves.In addition, widespread use of biofuels wouldfundamentally alter the energy dependence of somenations upon imported fossil fuels thereby shiftingnational interests. Emerging biofuels technologies thatavoid significant land-use changes—using feedstockssuch as agricultural waste products, native grasses,and biofuels from algae, could significantly reduce netCO2 emissions to the atmosphere.In domestic settings, widespread use of thetechnology could leverage manpower, disruptunskilled labor markets and immigration patterns,and change care for a growing elderly population.As early adopters, governments could provideincreased security and project combat powerwith reduced levels of manpower and systemlife-cycle costs.The uneven deployment of these technologiescould quickly reshape economic and militaryadvantages between nations. Early and robustadopters could see significant benefits, whilenations and societies hesitant to employ thetechnologies may find themselves disadvantaged.International pressure to regulate the technologiescould likewise be disruptive as some cultures maywelcome the changes to obtain quick benefits,while others loathe their “un-human” character.a These breakthroughs are categorized based upon the development and initial deployment of the technology. In some cases, full deployment may lag significantly due to infrastructure requirements.Source: SRI Consulting Business Intelligence and Toffler Associates.427346ID 11-0849

drop in oil prices to the $55-60 range orbelow would put significant pressure on theregime to make painful choices betweensubsidizing populist economic programs andsustaining funding for intelligence andsecurity operations and other programsdesigned to extend its regional power. Thenotion that state-dominated economies,apparently able to achieve economic growthabsent political freedoms or a fully freemarket, are a credible alternative to Westernnotions of free markets and liberal democracycould be badly dented, particularly sincehistory suggests the US and other Westernstates adapt more quickly and effectively tounexpected changes in energy markets.Under any scenario energy dynamics couldproduce a number of new alignments orgroupings with geopolitical significance:Russia, needing Caspian area natural gasin order to satisfy European and othercontracts, is likely to be forceful inkeeping Central Asian countries withinMoscow’s sphere, and, absent a non-Russia-controlled outlet, has a goodchance of succeeding.China will continue to seek to buttress itsmarket power by cultivating politicalrelationships designed to safeguard itsaccess to oil and gas. Beijing’s ties withSaudi Arabia will strengthen, as theKingdom is the only supplier capable ofresponding in a big way to China’spetroleum thirst.Beijing will want to offset its growingreliance on Riyadh by strengthening tiesto other producers. Iran will see this as anopportunity to solidify China’s support forTehran, which probably would strainBeijing’s ties to Riyadh. Tehran may alsobe able to forge even closer ties withRussia.We believe India will scramble to ensureaccess to energy by making overtures toBurma, Iran, and Central Asia. Pipelinesto India transiting restive regions mayconnect New Delhi to local instabilities.Water, Food, and Climate ChangeExperts currently consider 21 countries with acombined population of about 600 million tobe either cropland or freshwater scarce.Owing to continuing population growth, 36countries, home to about 1.4 billion people,are projected to fall into this category by2025. Among the new entrants will beBurundi, Colombia, Ethiopia, Eritrea,Malawi, Pakistan, and Syria. Lack of accessto stable supplies of water is reachingunprecedented proportions in many areas ofthe world (see map on page 55) and is likelyto grow worse owing to rapid urbanizationand population growth. Demand for water foragricultural purposes and hydroelectric powergeneration also will expand. Use of water forirrigation is far greater than for householdconsumption. In developing countries,agriculture currently consumes over 70percent of the world’s water. Theconstruction of hydroelectric power stationson major rivers may improve flood control,but it might also cause considerable anxiety todownstream users of the river who expectcontinued access to water.“Experts currently consider 21 countries,with a combined population of about 600million, to be either cropland or freshwaterscarce. Owing to continuing populationgrowth, 36 countries, home to about 1.4billion people, are projected to fall into thiscategory by 2025.”The World Bank estimates that demand forfood will rise by 50 percent by 2030, as aresult of growing world population, risingaffluence, and shifts to Western dietarypreferences by a larger middle class. The51

Two Climate Change WinnersRussia has the potential to gain the most fromincreasingly temperate weather. Russia hasvast untapped reserves of natural gas and oilin Siberia and also offshore in the Arctic, andwarmer temperatures should make thereserves considerably more accessible. Thiswould be a huge boon to the Russianeconomy, as presently 80 percent of thecountry’s exports and 32 percent ofgovernment revenues derive from theproduction of energy and raw materials. Inaddition, the opening of an Arctic waterwaycould provide economic and commercialadvantages. However, Russia could be hurtby damaged infrastructure as the Arctictundra melts and will need new technology todevelop the region’s fossil energy.Canada will be spared several serious NorthAmerican climate-related developments—intense hurricanes and withering heatwaves—and climate change could open upmillions of square miles to development.Access to the resource-rich Hudson Baywould be improved, and being a circumpolarpower ringing a major portion of a warmingArctic could be a geopolitical and economicbonus. Additionally, agricultural growingseasons will lengthen, net energy demand forheating/cooling will likely drop, and forestswill expand somewhat into the tundra.However, not all soil in Canada can takeadvantage of the change in growing season,and some forest products are alreadyexperiencing damage due to changes in pestinfestation enabled by warmer climates.global food sector has been highly responsiveto market forces, but farm productionprobably will continue to be hampered bymisguided agriculture policies that limitinvestment and distort critical price signals.Keeping food prices down to placate theurban poor and spur savings for industrialinvestment has distorted agricultural prices inthe past. If political elites are more worriedabout urban instability than rural incomes—asafe bet in many countries—these policies arelikely to persist, increasing the risk of tightsupplies in the future. The demographic trendfor increased urbanization—particularly indeveloping states—underscores the likelihoodthat failed policies will continue.Between now and 2025, the world will haveto juggle competing and conflicting energysecurity and food security concerns, yieldinga tangle of difficult-to-manage consequences.In the major grain exporters (the US, Canada,Argentina, and Australia), demand forbiofuels—enhanced by governmentsubsidies—will claim larger areas of croplandand greater volumes of irrigation water, evenas biofuel production and processingtechnologies are made more efficient. This“fuel farming” tradeoff, coupled with periodicexport controls among Asian producers andrising demand for protein among growingmiddle classes worldwide, will force grainprices in the global market to fluctuate atlevels above today’s highs. Some economistsargue that, with international markets settlingat lower grain volumes, speculation—invitedby expectations of rising fuel costs and moreerratic, climate change-induced weatherpatterns—could play a greater role in foodprices.A consortium of large agriculturalproducers—including India and China, alongwith the US and EU partners—is likely towork to launch a second Green Revolution,this time in Sub-Saharan Africa, which couldhelp dampen price volatility in worldwidegrain markets. By 2025, increases in Africangrain yields probably will be substantial, butthe increases will be confined principally tostates in the southern and eastern regions ofthe continent, which will have deepened tradeand security relations with East and South52

Strategic Implications of an Opening ArcticEstimates vary as to when the Arctic is likely to be ice free during the summer. The NationalSnow and Ice Data Center suggests a seasonally ice-free Arctic by 2060; more current researchsuggests the date could be as soon as 2013. The two most important implications of an openingArctic are improved access to likely vast energy and mineral resources and potentially shortermaritime shipping routes.Transiting the Northern Sea Route above Russia between the North Atlantic and the NorthPacific would trim about 5,000 nautical miles and a week’s sailing time off a trip compared withuse of the Suez Canal. Voyaging between Europe and Asia through Canada’s NorthwestPassage would trim some 4,000 nautical miles off of a trip using the Panama Canal.Resource and shipping benefits are unlikely to materialize by 2025. The US National PetroleumCouncil has said that some of the technology to exploit oil from the heart of the Arctic regionmay not be ready until as late as 2050. Nonetheless, these potential riches and advantages arealready perceptible to the United States, Canada, Russia, Denmark, and Norway—as evidencedby the emergence of competing territorial claims, such as between Russia and Norway, andCanada and Denmark.Although serious near-term tension could result in small-scale confrontations over contestedclaims, the Arctic is unlikely to spawn major armed conflict. Circumpolar states have othermajor ports on other bodies of water, so the Arctic does not pose any lifeblood blockade dangers.Additionally, these states share a common interest in regulating access to the Arctic by hostilepowers, states of concern, or dangerous nonstate actors; and by their shared need for assistancefrom high-tech companies to exploit the Arctic’s resources.The greatest strategic consequence over the next couple of decades may be that relatively large,wealthy, resource-deficient trading states such as China, Japan, and Korea will benefit fromincreased energy resources provided by any Arctic opening and shorter shipping distances.Asian states. Elsewhere south of the Sahara,civil conflict and the political and economicfocus on mining and petroleum extraction arelikely to foil most of the consortium’sattempts to upgrade irrigation and ruraltransportation networks and to extend creditand investment, allowing population growthto outpace gains in agricultural productivity.In addition to the currently projectedscarcities of freshwater and cropland, the UKTreasury-commissioned Stern Reportestimates that by the middle of the century200 million people may be permanentlydisplaced “climate migrants”—representing aten-fold increase over today’s entiredocumented refugee and internally displacedpopulations. Although this is considered highby many experts, broad agreement existsabout the risks of large scale migration andthe need for better preparation. Mostdisplaced persons traditionally relocate withintheir home countries, but in the future manyare likely to find their home countries havediminishing capabilities to accommodatethem. Thus the number of migrants seekingto move from disadvantaged into relativelyprivileged countries is likely to increase. Thelargest inflows will mirror many currentmigratory patterns—from North Africa andWestern Asia into Europe, Latin America intothe US, and Southeast Asia into Australia.53

Over the next 20 years, worries about climatechange effects may be more significant thanany physical changes linked to climatechange. Perceptions of a rapidly changingenvironment may cause nations to takeunilateral actions to secure resources,territory, and other interests. Willingness toengage in greater multilateral cooperation willdepend on a number of factors, such as thebehavior of other countries, the economiccontext, or the importance of the interests tobe defended or won.Many scientists worry that recent assessmentsunderestimate the impact of climate changeand misjudge the likely time when effects willbe felt. Scientists currently have limitedcapability to predict the likelihood ormagnitude of extreme climate shifts butbelieve—based on historic precedents—that itwill not occur gradually or smoothly. Drasticcutbacks in allowable CO 2 emissionsprobably would disadvantage the rapidlyemerging economies that are still low on theefficiency curve, but large-scale users in thedeveloped world—such as the US—alsowould be shaken and the global economycould be plunged into a recession or worse.54

Projected Global Water Scarcity, 2025Boundary representation isnot necessarily authoritative.Physical water scarcity: More than 75% of river flows areallocated to agriculture, industries, or domestic purposes.This definition of scarcity — relating water availability towater demand — implies that dry areas are not necessarilywater-scarce.Approaching physical water scarcity: More than 60% ofriver flows are allocated. These basins will experience physicalwater scarcity in the near future.Economic water scarcity: Water resources are abundantrelative to water use, with less than 25% of water from riverswithdrawn for human purposes, but malnutrition exists.Little or no water scarcity: Abundant water resourcesrelative to use. Less than 25% of water from rivers iswithdrawn for human purposes.Not estimatedSource: International Water Management Institute.Per Capita Water Consumption, 1995 and 2025Cubic meters/person/year601995 202550403020100AsiaLatinAmericaSub-SaharanAfricaWest Africa/North AfricaDevelopedCountriesSource: International Food Policy Research Institute , Global Water Outlook to 2025.DevelopingCountriesWorld782579AI (G00975)/423588AI 11-0855

Sub-Saharan Africa: More Interactions with the World and More TroubledIn 2025, Sub-Saharan Africa will remain the most vulnerable region on Earth in terms ofeconomic challenges, population stresses, civil conflict, and political instability. The weaknessof states and troubled relations between states and societies probably will slow majorimprovements in the region’s prospects over the next 20 years unless there is sustainedinternational engagement and, at times, intervention. Southern Africa will continue to be themost stable and promising sub-region politically and economically.Sub-Saharan Africa will continue to be a major supplier of oil, gas, and metals to world marketsand increasingly will attract the attention of Asian states seeking access to commodities,including China and India. However, despite increased global demand for commodities,increased resource income may not benefit the majority of the population or result in significanteconomic gains. Poor economic policies—rooted in patrimonial interests and incompleteeconomic reform—will likely exacerbate ethnic and religious divides as well as crime andcorruption in many countries. Ruling elites are likely to continue to accrue greater income andwealth, while poverty will persist or worsen in rural areas and sprawling urban centers. Thedivide between elite and non-elite populations is likely to widen, reinforcing conditions thatcould generate divisive political and religious extremism.By 2025, the region’s population is expected to reach over one billion, notwithstanding theeffects of HIV/AIDS. Over one-half of the population will be under age 24, and many will beseeking economic opportunity or physical safety via out-migration owing to conflict, climatechange, or widespread unemployment. The earliest global effects of climate change, includingwater stress and scarcity, will begin to occur in Sub-Saharan Africa by 2025.Today almost one-half (23 of 48) of the countries in Sub-Saharan Africa are classed asdemocracies, and the majority of African states are on a democratic path, but the most populousstates in the region and those with high population growth could backslide.Although Africa is already assuming more of its own peacekeeping responsibilities, the regionwill be vulnerable to civil conflict and complex forms of interstate conflict—with militariesfragmented along ethnic or other divides, limited control of border areas, and insurgents andcriminal groups preying on unarmed civilians in neighboring countries. Central Africa containsthe most troubling of these cases, including Congo-Kinshasa, Congo-Brazzaville, CentralAfrican Republic, and Chad.In contrast to other regions of the world, African attitudes toward the US will remain positive,although many African governments will remain critical of US policies on issues like the MiddleEast, Cuba, and global trade. Africa will continue to push for UN reform and for permanentrepresentation on the UN Security Council.56

Global Scenario II: OctoberSurprisePreconditions assumed in this scenarioinclude:In the following fictionalized account, globalinattention to climate change leads to majorunexpected impacts, thrusting the world into anew level of vulnerability. Scientists arecurrently uncertain whether we already havehit a tipping point at which climate changehas accelerated and whether there is little wecan do—including reducing emissions—thatwill mitigate effects even over the longerterm. Most scientists believe we will notknow whether we have hit a tipping pointuntil it is too late. Uncertainties about thepace and specific vulnerabilities or impactsfrom climate change are likely to persist overthe next 15-20 years even if our knowledgeabout climate change deepens, according tomany scientists.An extreme weather event—as described inthis scenario—could occur. Coping with thegreater frequency of such events, coupledwith other physical impacts of climate changesuch as growing water scarcities and morefood crises, may preoccupy policymakerseven while options for solving such problemsdwindle. In this example, relocating the NewYork Stock Exchange to a less vulnerablelocation is considered, but seriousconsideration also would be given torelocating other institutions to ensurecontinuity of operations. Although thisscenario focuses on an event that occurs in theUS, other governments have been caught bysurprise with different types of environmentaldisasters and have suffered a loss of standing.Mitigation efforts—further cutbacks in carbonemissions—are unlikely to make anydifference, at least in the short run, accordingto this account. Such a world involvingpotentially major dislocations could threatenboth developed and developing countries.Nations adopt a “growth-first” mentalityleading to widespread environmentalneglect and degradation.Governments, particularly those lackingtransparency, lose legitimacy as they failto cope with environmental and otherdisasters.Despite significant technological progress,no technological “silver bullet” is found tohalt the effects of climate change.National solutions to environmentalproblems are short term and inadequate.57

Presidential Diary EntryOctober 1, 2020The term “October Surprise” keeps recurring in my mind…I guess we had it coming,but it was a rude shock. Some of the scenes were like the stuff from the World War IInewsreels, only this time it was not Europe but Manhattan. Those images of the USaircraft carriers and transport ships evacuating thousands in the wake of the flooding stillstick in my mind. Why does hurricane season have to coincide with the UNGA in NewYork? It’s bad enough that this had to happen; it was doubly embarrassing that half theworld’s leaders were here to witness it—and a fair number of them had to be speciallyairlifted or spirited away for their safety.I guess the problem was that we counted on this not happening, at least not yet. Mostscientists assumed the worst effects of climate change would occur later in the century.Still, enough warned there was always a chance of an extreme weather event comingsooner and, if it hit just right, one of our big urban centers could be knocked out. As Iremember, most of my advisors thought the chances were pretty low after the last briefingwe got on climate change. But we were warned that we needed to decentralize ourenergy generation and improve the robustness of our infrastructure to withstand extremeweather events. Tragically, we did not heed this advice.We’ll survive, but Wall Street really has taken a blow and I don’t think we will get the NYStock Exchange back up and running as quickly as we did after 9/11. There is a questionwhether it will continue to be the NY Stock Exchange to begin with; it might have tochange its name to the “Garden State (New Jersey) Stock Exchange”—wouldn’t that bea blow to New Yorkers’ pride!It’s not as if this is just happening to us. Truth be told, the problem has been our wholeattitude about globalization. When I say “our,” I really mean in this context the elite oreven the little knot of leaders around the world. We all have been focused on boosting ormaintaining greater economic growth. We have a lot to be proud of too in that regard. Wehave avoided giving in to protectionist urges and managed to reenergize the trade rounds.But we have not prepared sufficiently for the toll that irresponsible growth is having on theenvironment. The New York disaster may not have been preventable with any measureswe could have taken 20 years ago, but what are we laying in store for future generationsby ignoring the signs? We all assume technology will come to the rescue, but so far wehave not found the silver bullet and carbon emissions continue to climb.What we did not understand is that the general publics in several countries appear to beahead of leaders in understanding the urgency or at least they have had a better senseof the need for trade-offs. They have become early adopters for energy generation fromrenewables, the use of clean water technologies, and using improved Internet connectivityto avoid the concentration of people that make them vulnerable to extreme weatherevents. The Europeans, of course, have been out in the lead on energy efficiency, butthey have been too ready to sacrifice growth, and without economic growth, they have notbeen able to generate high-paying jobs.427342ID 11-08

In China, it’s the opposite—too much crony capitalism. It’s not clear, for example, that China’sCommunist Party (CCP) will survive the scandal over burst dams and the devastation thatfollowed. A couple of decades ago, I would have thought it possible. At that time, the publicthere was so grateful for the material benefits accruing from China’s hell-bent efforts tomodernize that the Chinese people forgave the leaders almost everything. Now it is different.The middle class wants clean air and water. They don’t like the environmental devastation thatwas the price of rapid modernization or corruption that winks at the turning off of US providedcarbon capture equipment in their coal fired electrical plants. The Party is split too. Half worryabout a slowdown from more sustainable, environmentally prudent growth that could bepolitically devastating if jobs are not generated to the same degree. The other half understandsthe hardships and is more attuned to changing middle class priorities. I would not be surprisedif the 100,000 who perished in the recent dam disaster turn out to be the straw that breaks theCCP’s legitimacy, coming as it does on the heels of those corruption allegations against highparty officials.The poorest countries have suffered the most from our hands-off approach to globalization.I know we have talked for some time about not all boats being lifted and the need to dosomething about it. But I think we thought it best that Bill Gates, NGOs, and others handlethe problem. Of course, everyone has to get involved. NGOs can’t mount peacekeepingoperations. States at some point have to take responsibility. Most of these countries didnot have a chance without strong outside intervention. The fact that we had clean watertechnology and could not find a way to get it delivered to the most needy only made the badimpacts of climate change worse.With the climate changing rapidly, we are facing more problems—though not insuperable—inmaintaining adequate agricultural production. More challenging than boosting agriculturalyields overall is that changing weather patterns mean certain areas can’t sustain themselves.People migrate to the cities but the infrastructure is insufficient to support such burgeoningpopulations. This in turn sows the seeds for social conflict which impedes any steps towardgood governance and actually digging out from a long downward cycle. I count about 20countries in this condition.The problem is that some of these are not small, geopolitically insignificant countries.Some—like Nigeria—we in the developed world rely on for needed resources. Because of theencroaching desertification in the north, the religious clash between Muslims and Christiansis heating up. Another Biafra-like civil war—only this time along North-South lines—is notinconceivable.We talk a lot about these problems at the G-14 summits and in fact have started to engagein joint scenario exercises, but doing anything about an impending storm cloud is stillbeyond us. My last thought for the diary before I have to greet the dignitaries being airliftedonto the aircraft carrier for the UNGA reception: the growth projection figures are reallybad. The cumulation of disasters, needed cleanups, permafrost melting, lower agriculturalyields, growing health problems, and the like are taking a terrible toll, much greater than weanticipated 20 years ago.427342ID 11-08

We now assess the potential for conflict—both interstate and intrastate—over the next15-20 years to be greater than we anticipatedin Mapping the Global Future, particularly inthe greater Middle East. Large parts of theregion will become less volatile than todayand more like other parts of world, such asEast Asia, where economic goalspredominate, but other portions of the regionremain ripe for conflict. The combination ofincreasingly open economies and persistentlyauthoritarian politics creates the potential forinsurgencies, civil war, and interstate conflict.By 2025, Iran’s nuclear ambitions are likelyto be clear in one way or the other and theregion will either be swept up in an arms raceor have found another way to try to establishregional security. Although we believe theappeal of al-Qa’ida and other internationalterrorist groups will diminish over the next15-20 years, pockets of support will remain,ensuring a continuing threat, particularly aslethal technology is expected to become moreaccessible.A Shrinking Arc of Instability by 2025?In our previous study, Mapping the GlobalFuture, we assessed that those states mostsusceptible to conflict are in a great arc ofinstability stretching from Sub-Saharan Africathrough North Africa, into the Middle East,the Balkans, the Caucasus, and South andCentral Asia, and parts of Southeast Asia.Today, parts of this arc are experiencingincreasing economic activity, includingmoderate to high levels of GDP growth, slowbut perceptible economic reform, improvedregulatory performance, deepening financialmarkets, high levels of outside and intraregionalinvestment and related technologytransfers, and development of new tradecorridors. In the medium-to-longterm,increased rates of growth are likely to besustained if energy prices remain high, but notso high that they depress growth in otherregions. Awareness of increasingvulnerability to systemic changes in worldenergy markets also may act as a goad tofurther economic reform, including greaterdiversification in energy-rich states.For regimes, managing economic change willinvolve a delicate balancing act between theimperatives of fostering economic growth andmaintaining authoritarian rule. Althoughsome regimes may succeed, the odds are thatonly one or two will become genuinedemocracies and one or two will end up withcivil disorder and conflict because rulersmiscalculate the tradeoffs or take gamblesthat don’t pay off.Growing Risk of a Nuclear Arms Race inthe Middle EastA number of states in the region are alreadythinking about developing or acquiringnuclear technology useful for development ofnuclear weaponry. Over the next 15-20 years,reactions to the decisions Iran makes about itsnuclear program could cause a number ofregional states to intensify these efforts andconsider actively pursuing nuclear weapons.This will add a new and more dangerousdimension to what is likely to be increasingcompetition for influence within the region,including via proxies—Shia in Iran’s case andSunnis for most of its neighbors—and acompetition among outside powers anxious topreserve their access to energy supplies and tosell sophisticated conventional weaponry inexchange for greater political influence andenergy agreements.Not Inevitable… Historically, many stateshave had nuclear weapons ambitions but havenot gone the distance. States may prefer toretain the technological ability to producenuclear weapons rather than to develop actualweapons. Technological impediments and adesire to avoid political isolation and seekgreater integration into the global economy61

A Non-nuclear Korea?We see a unified Korea as likely by 2025—ifnot as a unitary state, then in some form ofNorth-South confederation. While diplomacyworking to end North Korea’s nuclearweapons program continues, the finaldisposition of the North’s nuclearinfrastructure and capabilities at the time ofreunification remain uncertain. A new,reunified Korea struggling with the largefinancial burden of reconstruction will,however, be more likely to find internationalacceptance and economic assistance byensuring the denuclearization of thePeninsula, perhaps in a manner similar towhat occurred in Ukraine post-1991. Aloosely confederated Korea might complicatedenuclearization efforts. Other strategicconsequences are likely to flow from Koreanunification, including prospects for new levelsof major power cooperation to manage newand enduring challenges, such asdenuclearization, demilitarization, refugeeflows, and financing reconstruction.could motivate Tehran to forego nuclearweaponization. However, even an Iraniancapacity to develop nuclear weapons mightprompt regional responses that could bedestabilizing.If Iran does develop nuclear weapons, or isseen in the region as having acquired a latentnuclear weapons capability, other countries inthe region may decide not to seek acorresponding capability. It is more likely,however, that a few of Iran’s neighbors willsee Iran’s development of nuclear weapons ora latent weapons capability as an existentialthreat or as resulting in an unacceptable,fundamental shift of power in the region, andtherefore will seek offsetting capabilities.Security guarantees from existing nuclearpowers that regional states find credible maybe regarded by them as a sufficient offset toan Iranian nuclear weapons capability, but itcould be a tall order to expect such guaranteesto satisfy all of those concerned about anuclear Iran.…But Potentially More Dangerous than theCold War. The prospect that nuclearweapons will embolden Iran, lead to greaterinstability, and trigger shifts in the balance ofpower in the Middle East appears to be thekey concern of the Arab states in the regionand may drive some to consider acquiringtheir own nuclear deterrent. Iran’s growingnuclear capabilities are already partlyresponsible for the surge of interest in nuclearenergy in the Middle East, fueling concernabout the potential for a nuclear arms race.Turkey, United Arab Emirates, Bahrain,Saudi Arabia, Egypt, and Libya are or haveexpressed interest in building new nuclearpower facilities. Future Iraniandemonstrations of its nuclear capabilities thatreinforce perceptions of its intent and abilityto develop nuclear weapons potentially wouldprompt additional states in the region topursue their own nuclear weapons programs.“We see a unified Korea as likely by 2025—if not as a unitary state, than in some formof North-South confederation.”It is not certain that the type of stabledeterrent relationship that existed for most ofthe Cold War would emerge naturally in theMiddle East with multiple nuclear-weaponscapable states. Rather than episodes ofsuppressing or shortening low-intensityconflicts and terrorism, the possession ofnuclear weapons may be perceived as makingit “safe” to engage in such activities, or evenlarger conventional attacks, provided thatcertain redlines are not crossed. Each suchincident between nuclear-armed states,however, would hold the potential for nuclearescalation.62

The continued spread of nuclear capabilitiesin the greater Middle East, where severalstates will be facing succession challengesover the next 20 years, also will raise newconcerns over the capacity of weak states tomaintain control over their nucleartechnologies and arsenals. If the number ofnuclear-capable states increases, so will thenumber of countries potentially willing toprovide nuclear assistance to other countriesor to terrorists. The potential for theft ordiversion of nuclear weapons, materials, andtechnology—and the potential forunauthorized nuclear use—also would rise.Finally, enough countries might decide toseek nuclear weapons capabilities in reactionto an Iranian capability that countries beyondthe region would begin pursuing their ownnuclear weapons programs.New Conflicts Over Resources?The rising energy demands of growingpopulations and economies may bring intoquestion the availability, reliability, andaffordability of energy supplies. Such asituation would heighten tensions betweenstates competing for limited resources,especially if accompanied by increasedpolitical turbulence in the Middle East and ageneral loss of confidence in the ability of themarketplace to satisfy rising demands.National companies could control the lion’sshare of the world’s hydrocarbon resources,leading to a further blending of energy-staterelationships and geopolitical concerns.Perceptions of energy scarcity will drivecountries to take actions to assure their futureaccess to energy supplies. In the worst casethis could lead to interstate conflicts ifgovernment leaders deem assured access toenergy resources to be essential tomaintaining domestic stability and thesurvival of their regime. However, evenactions short of war will have importantgeopolitical implications as states undertakestrategies to hedge against the possibility thatexisting energy supplies will not meet risingdemands. Energy security considerations arealready driving countries such as China andIndia to purchase equity stakes in energyfields, and evolving competitions areincreasingly being supported by militarycapabilities leading to the potential forheightened tensions and even conflict.Energy-deficient states may employ transfersof arms and sensitive technologies and thepromise of a political and military alliance asinducements to establish strategicrelationships with energy-producing states.Central Asia has become an area ofintense international competition foraccess to energy. Although Russia andChina currently are working cooperativelyto reduce the leverage of outside powers,especially the United States, competitionbetween the two in Central Asia couldescalate if in the future Russia seeks tointerfere with China’s relations in theregion or China becomes more aggressivein obtaining its access to energy suppliesin parts of the former Soviet Union.The future development of novel drillingtechniques may create new opportunitiesto find and exploit previously unexploredultra-deep oil fields. Such fields,however, may be located in areas ofcontested ownership, such as Asia or theArctic, creating the potential for conflict.63

Middle East/North Africa:Economics Drives Change, but with Major Risk of TurmoilThe Middle East and North Africa (MENA) will remain a geopolitically significant region in2025, based on the importance of oil to the world economy and the threat of instability. Theregion’s future will depend on how leaders manage oil windfalls, demographic changes, pressurefor political change, and regional conflicts.In a positive scenario in which economic growth becomes increasingly rooted and sustained,regional leaders will choose to invest in the region; implement economic, educational, and socialpolicies that encourage more growth; move forward with political reform that empowersmoderate—and probably Islamic—political parties; work to settle regional conflicts; andimplement security agreements that help prevent future instability.In a more negative scenario, leaders will fail to prepare their growing populations toparticipate productively in the global economy, authoritarian regimes will hold tightly topower and become more repressive, and regional conflicts will remain unresolved aspopulation growth strains resources.Demographically, a number of Middle Eastern and North African countries are positioned whereTaiwan and South Korea were before their takeoff in the 1960s and 1970s. Over the next 15 orso years, the proportion of the economically active populations (ages 15-64) in countries likeEgypt will exceed that of the economically dependent population by a much greater amount thanin any other region. This differential provides an opportunity to accelerate economic growth ifgovernments put appropriate economic and social policies in place. Prospects are best in theNorth African and Gulf states.Foreign investment—much of it originating from within the region—will increase integrationbetween Arab economies and drive private-sector development. The most promisingindustries for job growth are likely to be in services, putting the region on a differentdevelopmental path than East Asia.To maximize growth potential, MENA governments will need to improve their educationalsystems to produce a more technically skilled work force and encourage citizens accustomedto public sector jobs to accept the demands and volatility of the private sector. (East Asianeconomies prospered because of sustained government efforts to improve rapidly the qualityof the work force through universal education and by developing export industries.)In other regions, integrating young adults into the work force—coupled with a declining birthrate and shrinking youth bulge—has provided an opening for democratization. Social scientistshave found that, as an increasing proportion of the population had a stake in the system, formerlyauthoritarian states like South Korea and Taiwan felt they could experiment with politicalliberalization. An important cluster of North African countries—Algeria, Libya, Morocco,Egypt, and Tunisia—has the potential to realize such a demographic-democratic nexus in theperiod to 2025, but it is unclear whether these authoritarian regimes will exploit theseopportunities to liberalize.(Continued on next page…)64

(Continued…)A Two-Tier Muslim World? Although the Western paradigm separating religious and secularauthority may still be less compelling to Muslim publics, a greater emphasis on economics and,most importantly, greater participation of women in the work force may spur new forms ofprogressive Islam. This does not mean that extremist strands will disappear; in the short termthey might benefit from unease over the changing role of women and alternative family models.But over time, lower fertility promotes religious and political stability and, if secularization insouthern Europe is a guide, modernized versions of Islam could take root by 2025.The channeling of political dissent into Islamic discourse—a variant of the global revival ofreligious identity in the aftermath of the Cold War—and states’ efforts to manipulate Islamiccurrents will reinforce the dominance of Islam in Middle Eastern politics and society in 2025.As a result, pressures for greater political pluralism are likely to produce a bigger role for Islamicpolitical parties and a re-thinking of how Islam and politics should interact and influence eachother, with considerable political and social turmoil generated in the process.Even as some states may liberalize, others may fail: youth bulges, deeply rooted conflicts, andlimited economic prospects are likely to keep Palestine, Yemen, Afghanistan, Pakistan, andothers in the high-risk category. Spillover from turmoil in these states and potentially othersincreases the chance that moves elsewhere in the region toward greater prosperity and politicalstability will be rocky. The success of efforts to manage and resolve regional conflicts and todevelop security architectures that help stabilize the region will be a major determinant of theability of states to grow their economies and pursue political reform.Resolution of the Syrian and Palestinian conflicts with Israel, in particular, would broaden theideological and political discourse within secular and Islamic circles, undermine a traditionalpretext for maintaining large militaries and curtailing freedoms, and help defuse sectarian andethnic tensions in the region.Iran’s trajectory is also likely to have lasting regional impacts—for good or ill. Iran’s fractiousregime, nationalist identity, and ambivalence toward the United States will make any transitionfrom regional dissenter toward stakeholder perilous and uneven. Although Iran’s aims forregional leadership—including its nuclear ambitions—are unlikely to abate, its regionalorientation will have difficulty discounting external and internal pressures for reform. AnIranian perception of greater shared interests with the West in Iraq and Afghanistan, for example,and sustained progress on Arab-Israeli peace that weakens Iranian-Syrian ties and accommodatesor sidelines Iran’s sub-state allies would provide security incentives and pressures on Iran toadjust its regional role. A political consensus within Iran to develop further its significanteconomic potential—fueled potentially by a sustained popular backlash against corruption andeconomic mismanagement and a fall in energy rents—could provide an additional push to shiftIran’s factional politics to the left and an incentive for Iran to adjust its policies with a viewtoward easing US and international sanctions.65

Energy SecurityOther possible examples of the militarization ofenergy security include:States using their control of energyresources as weapons of political coercionand influence. Russia is seeking to positionitself to control energy supply and relatedtransportation networks from Europe to EastAsia. This would enable Moscow to use itscontrol over energy flows to promote Russianinterests and influence.Threats posed by terrorism and piracy toenergy production and transit. Publicstatements by al-Qa’ida leaders indicateterrorists are interested in striking PersianGulf oil facilities. The protection of energypipelines, facilities, and shipping fromterrorist attacks will be a key security concernand mission for military forces.Domestic instability, insurgencies, andconflict within strategic energy-producingand exporting states. Ethnic and politicalviolence and criminal activity currentlythreaten a large portion of Nigeria’s oilproduction. State failure in a key energyproducing country may require militaryintervention by outside powers to stabilizeenergy flows.Concerns about assuring future access toenergy supplies also are fostering increasednaval competition. Despite the growingnumber of pipeline projects, in 2025 Asiancountries will remain dependent on seatransfers of energy from suppliers in theMiddle East. This is raising concerns aboutthe future of maritime security in a zoneextending from the Persian Gulf to East andSoutheast Asia. Maritime security concernsare providing the rationale for a series ofnaval buildups and modernization efforts inthe region, such as China’s and India’sdevelopment of “blue-water” navalcapabilities, to protect critical economicassets and secure access to energy resources.Other national navies in the Middle East andAsia will not be able to replace the US Navy’srole in protecting strategic sea lines ofcommunication in 2025, but the buildup ofregional naval capabilities could lead toincreased tensions, rivalries, andcounterbalancing.Growing concerns over maritime securitymay create opportunities for multinationalcooperation in protecting critical sealanes. Mutual suspicions regarding theintentions behind naval build-ups bypotential regional rivals or theestablishment of alliances that excludekey players would, however, undermineefforts for international cooperation.A naval arms race in Asia may emerge inresponse to China’s further developmentof naval power projection. A naval armsrace might also be spurred by “antiaccess”capabilities—such as attacksubmarines and long-range antishipmissiles—that become widely viewed asefforts by Beijing to extend its politicalinfluence in the region and to deterattempts to cut off China’s seaborneenergy supplies by threatening mutualdisruption of sea trade.Climate change is unlikely to triggerinterstate war, but it could lead to increasinglyheated interstate recriminations and possiblyto low-level armed conflicts. With waterbecoming more scarce in several regions,cooperation over changing water resources islikely to be increasingly difficult within andbetween states, straining regional relations.Such regions include the Himalayan region,which feeds the major rivers of China,Pakistan, India, and Bangladesh; Israel-66

Another Use of Nuclear Weapons?The risk of nuclear weapon use over the next 20 years, although remaining very low, is likely tobe greater than it is today as a result of several converging trends. The spread of nucleartechnologies and expertise is generating concerns about the potential emergence of new nuclearweapon states and the acquisition of nuclear materials by terrorist groups. Ongoing low-intensityclashes between India and Pakistan continue to raise the specter that such events could escalateto a broader conflict between those nuclear powers. The possibility of a future disruptive regimechange or collapse occurring in a nuclear weapon state such as North Korea also continues toraise questions regarding the ability of weak states to control and secure their nuclear arsenals.In addition to these longstanding concerns, new political-military developments could furthererode the nuclear “taboo.” The prospect of a nuclear-armed Iran spawning a nuclear arms race inthe greater Middle East will bring new security challenges to an already conflict-prone region,particularly in conjunction with the proliferation of long-range missile systems. Furthermore,future acquisition of nuclear weapons by states with weak command and control procedures andsafeguards increases the probability of accidental or unauthorized nuclear use.Future asymmetries in conventional military capabilities among potential rivals might temptweak states to view nuclear weapons as a necessary and justifiable defense in response to thethreat of overwhelming conventional attacks. In such cases, the defending power might try tolimit the potential for escalation by employing a nuclear weapon test to signal resolve and deteraggression or by confining the use of nuclear weapons to the defense of its own territory.Options for limited physical destruction attacks such as those that use very low-yield weapons orhigh-altitude nuclear blasts designed to disrupt an enemy’s information networks and systems viaan electromagnetic pulse effect could further erode the taboo against nuclear weapon use andprompt reassessments of the vulnerabilities of modern conventional military forces.If nuclear weapons are used destructively in the next 15-20 years, the international system willbe shocked as it experiences immediate humanitarian, economic, and political-militaryrepercussions. How the world would respond over the long-term to another use of nuclearweapons would, however, likely depend on the context in which such weapons were used.Prevailing perceptions regarding whether the use of a nuclear weapon was justified, the level ofdestructiveness it created, and the future utility of nuclear weapons would drive global reactionsregarding counterproliferation and nuclear disarmament.A terrorist use of a nuclear weapon or an escalating conflict between two nuclear powers,such as India and Pakistan, would graphically demonstrate the danger of nuclear weapons,prompting calls for global nuclear disarmament and energizing counterproliferation andcounterterrorism measures.A successful nuclear weapon test or use of a nuclear weapon by a state to deter or halt aconventional attack might, on the other hand, enhance the perception of the utility of nuclearweapons in defending territorial sovereignty and increase pressures for proliferation in countriesthat do not possess a strong conventional military or security guarantees.(Continued on next page…)67

(Continued…)In either case, a future use of nuclear weapons probably would bring about significantgeopolitical changes as some states would seek to establish or reinforce security alliances withexisting nuclear powers and others would push for global nuclear disarmament. In Europe, forexample, divisions could emerge between some countries in Western Europe that support nucleardisarmament and those of Eastern Europe that still might fear Russia’s nuclear arsenal.Palestinian Territories; along the Jordan River(Israel-Jordan) and the Fergana Valley ofCentral Asia. Such dire scenarios are notinevitable even with worse-than-anticipatedclimate change impacts, however. Economicdevelopment, the spread of new technologies,and robust new mechanisms for multilateralcooperation to deal with climate change mayfoster greater global collaboration.Terrorism: Good and Bad NewsTerrorism is unlikely to disappear by 2025,but its appeal could diminish if economicgrowth continues and youth unemployment ismitigated in the Middle East. Economicopportunities for youth and greater politicalpluralism probably would dissuade some fromjoining terrorists’ ranks, but others—motivated by a variety of factors, such as adesire for revenge or to become “martyrs”—will continue to turn to violence to pursuetheir objectives.“For those terrorist groups active in 2025,the diffusion of technologies and scientificknowledge will place some of the world’smost dangerous capabilities within theirreach.”In the absence of employmentopportunities and legal means for politicalexpression, conditions will be ripe fordisaffection, growing radicalism, andpossible recruitment of youths intoterrorist groups. Terrorist and insurgent groups in 2025will likely be a combination ofdescendants of long-established groups—that inherit organizational structures,command and control processes, andtraining procedures necessary to conductsophisticated attacks—and newlyemergent collections of the angry anddisenfranchised that become selfradicalized.As long as turmoil and societal disruptions,generated by resource scarcities, poorgovernance, ethnic rivalries, or environmentaldegradation, increase in the Middle East,conditions will remain conducive to thespread of radicalism and insurgencies. Futureradicalism could be fueled by globalcommunications and mass media. Increasinginterconnectedness will enable individuals tocoalesce around common causes acrossnational boundaries, creating new cohorts ofthe angry, downtrodden, and disenfranchised.In some situations these new networks couldact as forces for good by pressuringgovernments through non-violent means toaddress injustice, poverty, the impacts ofclimate change, and other social issues. Othergroups, however, could use networks andglobal communications to recruit and trainnew members, proliferate radical ideologies,manage their finances, manipulate publicopinion, and coordinate attacks.68

Why al-Qa’ida’s “Terrorist Wave” Might Be Breaking UpAs al-Qa’ida celebrates its 20th birthday, most experts assert that the struggle against it willcontinue indefinitely, the so called “long war.” Other experts who have studied past “waves” ofterrorism believe that al-Qa’ida is an “aging” group by terrorist standards and suffers fromstrategic weaknesses that could cause it to decay into marginality, perhaps shortening thelifespan of the Islamic terrorist wave.A wave of terror is a cycle of activity—which can last up to 40 years—characterized byexpansion and contraction phases: rise, floodtide of violence, and ebb. The wave of terrorconcept was developed by UCLA Professor David C. Rapoport and provides a basis for thecomparative analysis of terrorist movements. In each wave, similar terrorist activities occur inmany countries, driven by a common vision—such as anarchism, Marxism, nationalism, orIslamic extremism. Terrorist groups who form the crest of each wave usually dissolve beforethe entire wave does, and their decay contributes to the breaking of the wave. Al-Qa’ida’sweaknesses—unachievable strategic objectives, inability to attract broad-based support, and selfdestructiveactions—might cause it to decay sooner than many people think.Research indicates that terrorists’ strategic objectives fail on two fronts. Objectives that pose athreat to the existing political order court tough counterterrorism measures, while objectives thatare seen as neither achievable nor relevant to solving problems have little appeal to elites or thegeneral populace. The two primary strategic aims of al-Qa’ida—the establishment of a globalIslamic caliphate and the removal of US and Western influence so that “apostate” regimes can betoppled—are clearly threats to many existing Muslim governments and are resulting in strongercounterterrorism measures.There is little indication that the vast majority of Muslims believe that such objectives arerealistic or that, if they could come to pass, would solve the practical problems ofunemployment, poverty, poor educational systems, and dysfunctional governance.Despite sympathy for some of its ideas and the rise of affiliated groups in places like theMahgreb, al-Qa’ida has not achieved broad support in the Islamic World. Its harsh pan-Islamistideology and policies appeal only to a tiny minority of Muslims.According to one study of public attitudes toward extremist violence, there is little supportfor al-Qa’ida in any of the countries surveyed—Algeria, Egypt, Jordan, Kuwait, Lebanon,Morocco, Qatar, Saudi Arabia, United Arab Emirates, and Yemen. The report also foundthat majorities in all Arab countries oppose jihadi violence, by any group, on their own soil.Al-Qa’ida is alienating former Muslim supporters by killing Muslims in its attacks. Recentscholarly research indicates that terrorist groups that kill civilians seldom accomplish theirstrategic goals. Although determining precisely the number of Muslims worldwide who havedied in al-Qa’ida attacks is difficult, examination of available evidence suggests that at least40 percent of the victims have been Muslims.(Continued on next page…)69

(Continued...)The roughly 40-year cycle of terrorist waves suggests that the dreams that inspire terrorist groupmembers’ fathers to join particular groups are not attractive to succeeding generations. Theprospect that al-Qa’ida will be among the small number of groups able to transcend thegenerational timeline is not high, given its harsh ideology, unachievable strategic objectives, andinability to become a mass movement.In relying almost exclusively on terrorism as a means to achieve its strategic objectives, ratherthan transforming into a political movement like Hizbollah or Hamas, al-Qa’ida is using astratagem that rarely is successful. Recent academic research indicates that only 6 percent ofterrorist groups active in the last 40 years have achieved their proclaimed strategic objectives.Al-Qa’ida’s lack of success in executing attacks against the “far enemy” could portend a periodof operational futility leading to increased frustration, decreased organizational élan, andinability to attract new members.Because history suggests that the global Islamic terrorist movement will outlast al-Qa’ida as agroup, strategic counterterrorism efforts will need to focus on how and why a successorterrorist group might evolve during the remaining years of the “Islamic terrorist wave.”On a positive note, support for terroristnetworks in the Muslim world appears to bedeclining. To succeed, terrorist groups need alarge number of passive supporters whosympathize with terrorists’ objectives.Reducing those numbers is key to lesseningthe appeal within societies. Analysis ofterrorists’ communications among themselvesindicates they see themselves in a “losing”battle with Western materialistic values.Surveys and analysis of jihadist websitesindicate growing popular dissatisfaction withcivilian casualties—particularly of fellowMuslims—caused by terrorist actions.For those terrorist groups active in 2025, thediffusion of technologies and scientificknowledge will place some of the world’smost dangerous capabilities within theirreach. The globalization of biotechnologyindustries is spreading expertise andcapabilities and increasing the accessibility ofbiological pathogens suitable for disruptiveattacks. Radiological and chemical weaponsmay also be used by terrorists or insurgentsseeking an advantage against opposingsecurity or military forces and to create masscasualties. The proliferation of advancedtactical weapons will increase the potentialthat they will be used by terrorists. Improvedanti-tank guided missiles and other manportableweapon systems, thermobaric andother advanced explosives, and the spread ofcheap sensors and robotics that could be usedto create more capable improvised explosivedevices illustrate this danger.Some governments will likely respond toincreasing terrorism and internal threats byexpanding domestic security forces,surveillance capabilities, and the employmentof special operations-type forces.Counterterrorism and counterinsurgencymissions increasingly will involve urbanoperations as a result of greater urbanization.Governments, citing the need for enhancedinternal security and their desire to control theinflux of unwanted refugees and immigrants,may increasingly erect barricades and fencesaround their territories to inhibit access.Gated communities will continue to spring up70

The Changing Character of ConflictConflict will continue to evolve over the next 20 years as potential combatants adapt to advancesin science and technology, improving weapon capabilities, and changes in the securityenvironment. Warfare in 2025 is likely to be characterized by the following strategic trends:The Increasing Importance of Information. Advances in information technologies are enablingnew warfighting synergies through combinations of advanced precision weaponry, improvingtarget and surveillance capabilities, enhanced command and control, and the expanding use ofartificial intelligence and robotics. Future proliferation of long-range precision weapons willpermit a growing number of states to threaten rapid destruction of an adversary’s criticaleconomic, energy, political, and military and information infrastructures. The growingimportance of information technologies as an enabler of modern warfighting capabilities willmake information itself a primary target in future conflicts. By 2025 some states probably willdeploy weapons designed to destroy or disable information, sensor, and communicationnetworks and systems including anti-satellite, radiofrequency, and laser weapons.The Evolution of Irregular Warfare Capabilities. The adoption of irregular warfare tactics byboth state and nonstate actors as a primary warfighting approach in countering advancedmilitaries will be a key characteristic of conflicts in 2025. The spread of light weaponry,including precision tactical and man-portable weapon systems, and information andcommunication technologies will significantly increase the threat posed by irregular forms ofwarfare over the next 15-20 years. Modern communication technologies such as satellite andcellular phones, the Internet, and commercial encryption, combined with hand-held navigationdevices and high-capacity information systems that can contain large amounts of text, maps, anddigital images and videos will greatly enable future irregular forces to organize, coordinate, andexecute dispersed operations.The Prominence of the Non-military Aspects of Warfare. Non-military means of warfare, suchas cyber, economic, resource, psychological, and information-based forms of conflict willbecome more prevalent in conflicts over the next two decades. In the future, states and nonstateadversaries will engage in “media warfare” to dominate the 24-hour news cycle and manipulatepublic opinion to advance their own agenda and gain popular support for their cause.The Expansion and Escalation of Conflicts Beyond the Traditional Battlefield. Containing theexpansion and escalation of conflicts will become more problematic in the future. Theadvancement of weapons capabilities such as long-range precision weapons, the continuedproliferation of weapons of mass destruction, and the employment of new forms of warfare suchas cyber and space warfare are providing state militaries and nonstate groups the means toescalate and expand future conflicts beyond the traditional battlefield.71

within many societies as elites seek to insulatethemselves from domestic threats.Afghanistan, Pakistan, and Iraq: LocalTrajectories and Outside InterestsDevelopments in Afghanistan, Pakistan, andIraq will critically affect regional stability, ifnot the global order. By 2025, the trajectoriesof these three states probably will havediverged sharply.In 2025, Afghanistan may still evincesignificant patterns of tribal interaction andconflict. With the exception of the Talibaninterlude, Afghanistan has not experiencedstrong central authority; centrifugal forces arelikely to remain strong even if Kabulincreases its sway.Western-driven infrastructure, economicassistance, and construction are likely toprovide new stakes for local rivalriesrather than the basis for a cohesiveWestern-style economic and social unity.Globalization has made opiumAfghanistan’s major cash crop; thecountry will have difficulty developingalternatives, particularly as long aseconomic links for trade with CentralAsia, Pakistan, and India are not furtherdeveloped.Tribal and sectarian disputes probably willcontinue to arise, be fought out, and shiftconstantly in Afghanistan as the variousplayers realign themselves. Outsiders willchoose between making temporary alliancesto destroy terrorist enemies, gain access tolocal resources, and advance other immediateinterests or more ambitious—and costly—goals.The future of Pakistan is a wildcard inconsidering the trajectory of neighboringAfghanistan. Pakistan’s Northwest FrontierProvince and tribal areas probably willcontinue to be poorly governed and the sourceor supporter of cross-border instability. IfPakistan is unable to hold together until 2025,a broader coalescence of Pashtun tribes islikely to emerge and act together to erase theDurand Line, 8 maximizing Pashtun space atthe expense of Punjabis in Pakistan and Tajiksand others in Afghanistan. Alternatively, theTaliban and other Islamist activists mightprove able to overawe at least some tribalpolitics.In Iraq, numerous ethnic, sectarian, tribal,and local notables will compete to establishand maximize areas of political and socialauthority, access to resources, and to controlthe distribution of those resources throughtheir patronage networks.By 2025 the government in Baghdadcould still be an object of competitionamong the various factions seekingforeign aid and pride of place, rather thana self-standing agent of political authority,legitimacy, and economic policy.What happens in Iraq will affect neighbors aswell as internal contestants. Iran, Syria,Turkey, and Saudi Arabia will haveincreasing difficulty staying aloof. An Iraqunable to maintain internal stability couldcontinue to roil the region. If conflict therebreaks into civil war, Iraq could continue toprovide a strong demonstration of the adverse8 The Durand Line is the border between Pakistan andAfghanistan—an artificial division that the AfghanGovernment does not recognize.72

End of Ideology?We judge that ideological conflicts akin to the Cold War are unlikely to take root in a worldwhere most states will be preoccupied with the pragmatic challenges of globalization andshifting global power alignments. The force of ideology is likely to be strongest in the Muslimworld—particularly the Arab core where Islam’s diverse expressions will continue to influencedeeply social norms and politics as well as serve as a prism through which individuals willabsorb the economic and cultural forces of globalization. Increasing religious observance andthe failures of secular Arab nationalism will leave Islamic political and social movements bestpositioned to assert ideological influence over governments and publics in much of the Muslimworld over the next 15-20 years.The ensuing Islamic discourse will be increasingly fluid as the clerical leadership detaches fromestablished seats of learning and traditions of jurisprudence and asserts its own interpretations ofthe Quran and the Hadith (oral tradition). The trend toward bypassing tradition, aided by thespread of media technologies, will encourage the spread of Salafism (reverence for the earliestperiod in Islam), including its most radical forms, which risks undermining Western allies in theMuslim world, especially in the Middle East. Nonetheless, the dispersal of religious authorityinto networks of like-minded thinkers also could set the stage for a revival of innovativeperspectives on Islam’s relationship to the modern world and provide a counterweight to theradical trend.The direction of Islam’s internal ideological struggle will be determined primarily by localconditions. In countries where economic and demographic trends are favorable and publics andgovernments opt for the benefits of globalization, there will be strong incentives to revive andbroaden Islamic teachings that promote a culture of innovation, scientific learning, politicalexperimentation, and respect for religious pluralism. In those countries that are likely to strugglewith youth bulges and weak economic underpinnings—such as in Afghanistan, Nigeria,Pakistan, and Yemen—the radical Salafi trend is likely to gain traction.consequences of sectarianism to othercountries in the region. Alternatively, a stableIraq could provide a positive example ofeconomic growth and political development.All players will look to the United Statesto guarantee stability, but Tehran willcontinue to fear US designs for Iran’s ownregime and sovereignty.Public opinion polls likely will continueto suggest popular adherence to being“Iraqi,” but the persistence of competingsecurity systems, social organizations, andeconomic subsistence networks willanimate robust local and sectarianidentities.73

The Sunnis will have an interest in the centralstate only if it provides them with what theyjudge to be an adequate share of resourceslargely generated outside their areas ofcontrol. Absent this satisfaction, agitation bySunni jihadists, tribal leaders, and othernotables could remain a destabilizing factor.In addition, any significant increase in thenumber of Iraqi Sunnis emigrating to Jordanand Syria could jeopardize the stability ofthose countries.Development of a well-integrated nationalarmy would be an important factor inmaximizing prospects for a morefunctional Iraqi state. This would requirereplacing the current tribal and sectarianloyalties of officers and troops with amuch more robust sense of corporate élanand national purpose.Shi’a, flush with their newfound primacy,have historically been divided, and personalrivalries among the Sadrs, Hakims, and otherShi’a notables are likely to continue to colorpolitics in this community. Tribes of mixedSunni-Shi’a ethnicity could serve as anintegrating intercommunal glue, but only ifeconomic development leads to a moretransparent and trustworthy centraladministration and national system formaterial production and distribution.74

Potential Emergence of a Global PandemicThe emergence of a novel, highly transmissible, and virulent human respiratory illness for whichthere are no adequate countermeasures could initiate a global pandemic. If a pandemic diseaseemerges by 2025, internal and cross-border tension and conflict will become more likely asnations struggle—with degraded capabilities—to control the movement of populations seeking toavoid infection or maintain access to resources.The emergence of a pandemic disease depends upon the natural genetic mutation or reassortmentof currently circulating disease strains or the emergence of a new pathogen into the humanpopulation. Experts consider highly pathogenic avian influenza (HPAI) strains, such as H5N1,to be likely candidates for such a transformation, but other pathogens—such as the SARScoronavirus or other influenza strains—also have this potential.If a pandemic disease emerges, it probably will first occur in an area marked by high populationdensity and close association between humans and animals, such as many areas of China andSoutheast Asia, where human populations live in close proximity to livestock. Unregulatedanimal husbandry practices could allow a zoonotic disease such as H5N1 to circulate in livestockpopulations—increasing the opportunity for mutation into a strain with pandemic potential. Topropagate effectively, a disease would have to be transmitted to areas of higher populationdensity.Under such a scenario, inadequate health-monitoring capability within the nation of originprobably would prevent early identification of the disease. Slow public health response woulddelay the realization that a highly transmissible pathogen had emerged. Weeks might passbefore definitive laboratory results could be obtained confirming the existence of a disease withpandemic potential. In the interim, clusters of the disease would begin to appear in towns andcities within Southeast Asia. Despite limits imposed on international travel, travelers with mildsymptoms or who were asymptomatic could carry the disease to other continents.Waves of new cases would occur every few months. The absence of an effective vaccine andnear universal lack of immunity would render populations vulnerable to infection. a In this worstcase,tens to hundreds of millions of Americans within the US Homeland would become ill anddeaths would mount into the tens of millions. b Outside the US, critical infrastructure degradationand economic loss on a global scale would result as approximately a third of the worldwidepopulation became ill and hundreds of millions died._____________________________a US and global health organizations currently are working to develop vaccines that may prevent ormitigate influenza pandemics. A breakthrough in the next several years could reduce the risk posed bypandemic influenza during upcoming decades.bHow fast a disease spreads, how many people become sick, how long they stay sick, the mortality rate,and the symptoms and after-effects will vary according to the specific characteristics of whateverpathogen is responsible for a pandemic. This scenario posits plausible characteristics that fall within arange of possibilities for these variables.75

Global Scenario III: BRICs’Bust-UpPreconditions underpinning this scenarioinclude:In this fictionalized scenario, Chinese fears ofdisruption of China’s energy supplies spark aclash with India. With increasing resourceconstraints likely out to 2025, disputes overresources appear to us to be a growingpotential source of conflict. The sense ofvulnerability is heightened by the dwindlingnumber of energy producers and increasingconcentration in unstable regions such as theMiddle East. A world in which there aremore confrontations over other issues—suchas new trade barriers—is likely to increase thepotential for any dispute to escalate intoconflict. As outlined in this scenario,misperceptions—along with miscommunications—couldplay as important a roleas any actual threats. Also illustrated by thisscenario is the competition by rising powersfor resources. Both China and India—thoughrich in coal—have limited and dwindling oiland gas reserves and must rely on foreignsources. In thinking about the increasedpotential for conflict in this multipolar world,we need to keep in mind the scope for theemerging powers to clash with one another.A steady period of growth has slowed asstates struggle to cope with energy andresource shortages, which are particularlyacute in the Asian economies.A rise in nationalist sentiments occurswith the intense energy competition in thiszero-sum world.A balance of power emerges thatresembles a 21 st century replay of theyears before 1914.76

Letter by current Foreign Minister to former Brazilian PresidentFebruary 1, 2021I once heard a story—though I don’t know whether it is true—that Goldman Sachs addedBrazil as an afterthought to the now-famous grouping of emerging powers or BRICs.Rumor has it that they needed a fourth country, preferably from the southern hemispheresince the others were in the north. It also helped that Brazil began with a B.True or not, Brazil has pulled its weight over the past six months, performing feats ofdiplomacy that even the US could not equal in present circumstances.Let me go back to the beginning even though a lot of this you probably know. In fact, toget to the root of the Sino-Indian clash one has to go back to before there was any newscoverage of the events. A lot of little incidents led to the Chinese attack on two Indianwarships near the Gulf of Oman, which in turn triggered the US attack disabling theChinese ships as they tried to withdraw from the area.For a couple years, the Chinese had been watching what from their standpoint was adangerous confluence of events that could jeopardize their economic, and thereforepolitical survival. First, the Japanese had been making considerable progress inincreasing their sea control capabilities in contested ocean areas that looked promisingfor producing oil and gas.Second, there had been a notable acceleration in Indian military modernization as well asIndian attempts to erode Chinese gains in influence in Southeast Asia, increasing India’ssea denial capabilities in the areas through which oil and gas move to China from theMiddle East. China responded, extending its naval presence in the region by establishingnaval basing rights in Pakistan. It became clear that Beijing’s strategy was to deter anyattempts by India to cut off China’s sea access to energy resources by creating a threatto India’s sea lanes in return. Tensions between India and China increased sharply whena Chinese submarine disappeared without explanation while monitoring an Indian navalexercise.Third, Sino-Russian ties were simultaneously taking a tumble despite earlier cooperationin the Shanghai Cooperation Organization. Beijing detected increasing signs of Russiaundercutting Chinese relations with Central Asian energy producers. This stoked Chineseenergy insecurity. The fact that emerging alternative energy technologies—clean coal,solar, wind, and geothermal—did not materialize after heavy Chinese and US investmentsdid not help.As you know, even before the Sino-Indian incident, there had been a skirmish or two lastyear between the Chinese and Russians in Russia’s Far East. If the Chinese had fearedRussian double-dealing in Central Asia, the Russians were just as paranoid about whatthe Chinese were up to in Russia’s Far East. Russia’s accusation of spying by a group ofstudents from Beijing and their subsequent imprisonment in Vladivostok occasioned, as427345ID 11-08

you well remember, the spectacular Chinese rescue effort which thoroughly humiliatedthe Russians. Some called it a second Port Arthur in reference to the Japanese sinkingthe Russian fleet in 1905.Finally, the strategic competition for influence and access to energy that emerged in theMiddle East provided a new backdrop for the increasing rivalry among China, India, andRussia. As the United States reduced its military forces in the Middle East following itsinvolvement in Iraq, the other great powers sought to fill the vacuum. The Gulf Arab statesin particular sought to strengthen their relationships with other powers to compensate forwhat they perceived as a weakened US security commitment post Iraq.Tensions in the Middle East meanwhile were building as Iran continued to exert itsgrowing power. A crisis erupted after a series of naval incidents between Iranian andArab naval forces in the Persian Gulf and the Iranian threat to close off access to thePersian Gulf to all naval forces from outside the region except those of “friendly” powers.In response the United States introduced new economic sanctions against Tehranand sought to conduct an embargo of arms shipments to Iran. Tehran countered bythreatening to disrupt oil traffic through the Gulf if Washington did not back down.US pressure on the Chinese, Indians, and others to reject Iranian blandishments andeschew trade with the Iranians was intense. Beijing, fearing a disruption of its energysupplies, sought to play both sides, maintaining good relations with the Saudis while alsopromising Iran its support. China had established years back a strategic reserve, but thatwould last only so long and the uncertainty about what happened after a couple monthswas putting political pressure on the government. New Delhi also sought to nuance itsresponse noting its need for natural gas from Iran but also seeking to maintain its goodrelationships with the United States and the Arab states. As a result, India declined toparticipate in economic sanctions that were deemed to be most harmful to ordinaryIranian citizens but agreed to help the United States enforce an arms embargo of Iran.You can see how this set the stage for the incident at sea. Chinese nerves were on edge,but the Chinese were feeling very confident after the Russian Far East affair. The Indianattempt to stop a Chinese vessel believed to be carrying new antiship cruise missilesto Iran was resisted by Chinese naval forces in the area. The Chinese saw the Indianwarships as surrogates for the United States. The US attack confirmed it. The originalcrisis in the Middle East—which really pitted the US and Europe against Iran—wassuddenly transformed into a serious global one.Fortunately over the past few weeks, unlike 1914, all the powers drew back from thebrink. But oil is now over $300 a barrel and stock markets are tanking everywhere. Thatgets me to the Brazilian angle. We were the only country of any stature that had the trustof all the others. Even the Europeans were discredited because of their links to the USin the Iranian crisis. China was desperate to find a way out of what could have been aneven worse position if a full-scale conflict with the Indians and the United States hadensued. The US too wanted a face-saving way out of the impasse since it looked likethe only victor would be the Iranians and to an extent the Russians who sat smugly on427345ID 11-08

the sidelines, reaping a fortune from the spike in energy prices. Of course, our continueddevelopment of biofuels in a responsible way only added to our credibility.In the negotiations, I have tried to do more than just get all sides to back off and paycompensation to one another for the damages to each others’ fleets. China needs to beassured about energy flows from the Gulf—at least once they resume.I’m not sure that I have succeeded in building up mutual confidence and trust. I sense thatthe militaries in all three places—the US, China, and India—will use the incident to pushfor greater militarization of energy security. We could experience a new naval arms race.In China, the government still fears public retribution because of the humiliation sufferedby the US attack. Of course, for the moment, the US is the target of the nationalisticoutburst—the United States’ new embassy is a charred ruin. The Iranians have let upsome, particularly as the US and its European partners made some concessions to getthe oil flowing again and defuse the crisis with China and India.I’ve told the three—the US, India, and China—that the next round of talks has to be heldhere in Rio. I’m hoping a more convivial atmosphere will do the trick. Rio Carnival isaround the corner…427345ID 11-08

The trend toward greater diffusion ofauthority and power occurring for a coupledecades is likely to accelerate because of theemergence of new global players, increasinglyineffective institutions, growth inregional blocs, advanced communicationstechnologies, and enhanced strength ofnonstate actors and networks.By 2025, nation-states will no longer bethe only—and often not the mostimportant—actors on the world stage andthe “international system” will havemorphed to accommodate the new reality.But the transformation will be incompleteand uneven. Although states will notdisappear from the international scene, therelative power of various nonstateactors—including businesses, tribes,religious organizations, and even criminalnetworks—will grow as these groupsinfluence decisions on a widening rangeof social, economic, and political issues.The growing multiplicity of actors couldstrengthen the international system by fillinggaps left by aging post-World War IIinstitutions, but it also has the potential tofurther fragment the existing system and toimpede international cooperation. Thediversity in both types and kinds of actorincreases the likelihood of fragmentation overthe next two decades given the apparentlywaning ability of legacy internationalinstitutions to address new transnationalchallenges.Multipolarity without MultilateralismIn such a world, we are unlikely to see anoverarching, comprehensive, unitary approachto global governance. Current trends suggestthat global governance in 2025 will be apatchwork of overlapping, often ad hoc andfragmented efforts, with shifting coalitions ofmember nations, international organizations,social movements, NGOs, philanthropicfoundations, and companies.This fragmentation of interests and actorswill further erode prospects for the UnitedNations to strengthen consensus among itsmembers for effective multilateralaction—particularly within the current oran expanded Security Council—or forsustaining broader reforms of the UNsystem.This multipolarity is also unlikely toinclude a single dominant nation-statewith the overwhelming power andlegitimacy to act as the agent ofinstitutional overhaul. (See below fordiscussion of the role of the US.)Most of the pressing transnational problems—including climate change, regulation ofglobalized financial markets, migration,failing states, crime networks, etc.—areunlikely to be effectively resolved by theactions of individual nation-states. The needfor effective global governance will increasefaster than existing mechanisms can respond.Leaders will pursue alternative approaches tosolving transnational problems—with newinstitutions, or more likely, many informalgroupings. Recent trends suggest thatexisting multilateral institutions—which arelarge and cumbersome—will have difficultyadapting quickly enough to undertake newmissions, accommodate changingmemberships, and obtain necessary resources.NGOs and philanthropist foundations—concentrating on specific issues—increasinglywill be a part of the landscape but are likely tobe limited in their ability to effect change inthe absence of concerted efforts bymultilateral institutions or governments.Quests for greater inclusiveness—to reflectthe emergence of newer powers—may makeit harder for international organizations to81

tackle transnational challenges. Respect forthe dissenting views of member nations willcontinue to shape the agenda of organizationsand limit the kinds of solutions possible.Large and enlarging organizations—from theUN General Assembly to NATO and theEU—may find the challenges to beparticularly difficult. There is unlikely to beany effort to “zero base” the internationalorganizational structure such that someorganizations go away or are reinvented.Effective action also may be impeded by theexistence of too many institutions—many ofwhich have declining purpose—with limitedlegitimacy and effectiveness. This is likely toapply across the board, from Western-driveninstitutions to those of the historic ThirdWorld.We anticipate that arms races, territorialexpansion, and military rivalries thatcharacterized late 19 th century multipolaritywill be less significant in the emerging one,but we cannot rule out such possibilities. Formost countries, strategic rivalries are likely torevolve around trade, investment, technologyinnovation, and acquisition. However,increasing worries about resources—such asenergy or even water—could easily put thefocus back on territorial disputes orunresolved border issues.Asia is one region where the number of suchborder issues is particularly noteworthy or, inthe case of Central Asia, where large depositsof energy resources increase the potential fora repeat of the 19 th century’s “Great Game”with outsiders contending for the exclusiveright to control market access. The fact that anumber of countries may experience a sharpfall in national power if alternatives for fossilfuel are developed quickly injects apotentially dangerous risk of instability. Asthe national power of China, India, and othersgrows, smaller countries in the neighborhoodmay seek outsiders’ protection or interventionin a balancing effort.How Many International Systems?The emerging powers, particularly China andIndia, have a shared interest in maintaining astable and open order, but they espousedifferent “means.” Their spectaculareconomic success has been achieved with aneconomic model that is at odds with theWest’s traditional laissez faire recipe foreconomic development. As we have seen,climate change, energy, and other resourceneeds are likely to be more problematic forwhat many see as their primary goal ofcontinued economic development. Giventhese differing perspectives, the questionarises as to whether the new players—andtheir alternative approaches—can be meldedwith the traditional Western ones to form acohesive international system able to tacklethe increasing number of transnational issues.While sharing a more state-centric view, thenational interests of the emerging powers arediverse enough, and their dependence onglobalization compelling enough, that thereappears little chance of an alternative blocforming among them to directly confront themore established Western order. The existinginternational organizations—such as the UN,WTO, IMF, and World Bank—may provesufficiently responsive and adaptive toaccommodate the views of emerging powers,but whether the emerging powers will begiven—or will want—additional power andresponsibilities is a separate question. Indeedsome or all of the rising powers may becontent to take advantage of the institutionswithout assuming leadership burdenscommensurate with their status. At the sametime, their membership does not necessarilyhave to involve heavy responsibilities orburden-sharing, allowing them to pursue theirgoals of economic development. For some,the fact that agreement on new permanent82

Greater Regionalism—Plus or Minus for Global Governance?One exception to the trend toward greater multipolarity with less multilateralism may occur on aregional level in Asia. Greater Asian integration, if it occurs, could fill the vacuum left by aweakening multilaterally based international order but could also further undermine that order.In the aftermath of the 1997 Asian financial crisis, a remarkable series of pan-Asian ventures—the most significant being ASEAN + 3—began to take root. Although few would argue that anAsian counterpart to the EU is a likely outcome even by 2025, if 1997 is taken as a starting point,Asia arguably has evolved more rapidly over the last decade than the European integration did inits first decade(s). In the economic realm, extra-regional players such as the US will continue tobe a significant part of the 2025 Asian economic equation. However, movement over the next 15years toward an Asian basket of currencies—if not an Asian currency unit as a third reserve—ismore than a theoretical possibility.Such a development would be in part an effort by Asians to insulate themselves fromfinancial volatility outside their region, facilitate economic integration, and to achieve greaterrepresentation at the global table.Aspects of Asian regionalism that are difficult to quantify include the growing habits ofcooperation, buoyant confidence, frequency of encounters by a host of high-level officialsand the cultural diffusion that is bridging historical and political differences and isengendering a new sense of community.Asian regionalism would have global implications, possibly sparking or reinforcing a trendtoward three trade and financial clusters that could become quasi-blocs (North America, Europe,and East Asia).Establishment of such quasi-blocs also would have implications for the ability to achieve futureglobal World Trade Organization agreements and regional clusters could compete in the settingof trans-regional product standards for IT, biotech, nanotech, intellectual property rights, andother “new economy” products.An Asian regional energy posture could set the terms for the rest of the world. Some two-thirdsof Mideast oil exports go to Asia, and some 70 percent of Asian imports are from the MiddleEast. This pattern is likely to intensify. Whether this nexus is primarily commercial—complementary investments and military sales—or acquires an increasingly political/strategiccharacter could determine the character of the international system.As stated, in the worst case—absent greater regional cooperation—concern over oil supplyroutes could lead to a China-Japan-India naval arms race.Developments in the security realm—where Asian integration is currently weakest and wheretrends toward competition and hedging persist—could dilute regionalism. Whether and howKorea is reunified and the status of its nuclear program, and whether Taiwan’s relationship to theMainland moves toward conflict or is resolved peacefully, will be key factors shaping regional(Continued on next page…)83

(Continued…)dynamics. Current trends suggest traditional security concerns are declining in importance butmay be replaced by new issues, such as competition over resources. Managing and adjusting to atransition to a reunified Korea could expand the Six-Party talks into a mechanism that featuresnew levels of cooperation among the US, Japan, and China.Whether greater or lesser integration occurs also depends largely on the future character of Sino-Japanese ties. This is the first time in modern history that China and Japan have been majorregional and global actors at the same time. A key question is whether they can transcendhistorical suspicions and compete peacefully. Peaceful resolution of the Korea and Taiwandisputes and a Franco-German type entente between China and Japan would sharply diminish theregional desire for a US “offshore” balancer role. However, US allies and security partners inthe region will not trade in the US balancing role for any collective regional securityarrangement until the political and economic consequences of China’s rise become better known.members of the Security Council appearsremote even over the next 15-20 yearsprovides an additional excuse to forego aglobal role which could come at the expenseof domestic goals. One large uncertainty iswhether the political will exists to reshape theinternational system to offer the emergingpowers enough responsibility for them toshoulder more global burdens.“Most experts…do not expect the risingpowers to challenge or radically alter theinternational system…”Most experts—US and foreign—we consulteddo not expect the rising powers to challengeor radically alter the international system asdid Germany and Japan in the 19 th and early20 th centuries. The emerging powers willhave a high degree of freedom to “customize”their political and economic policies ratherthan fully adopting Western norms. Becauseof their growing geopolitical clout, domesticmarkets, and roles in global resourceextraction, manufacturing, finance, andtechnology, the rising powers are also likelyto want to preserve their policy freedom tomaneuver and will want others to carry theburden of dealing with global challenges suchas terrorism, climate change, proliferation,and energy security. Russia’s and China’sresource nationalism and state capitalismunderpin, for example, their elite-basedpolitics and limit their willingness tocompromise on major international economicissues such as trade, energy, finance, orclimate change.Others, such as India, lack strategiceconomic and political visions and do notpossess domestic grassroots support fordeep economic liberalization. Manyglobal issues require sacrifices or abruptchanges to these countries’ developmentplans, another reason for them to prefer tobe bystanders rather than leaders in amultilateral system.A World of NetworksIn response to likely deficits in globalgovernance, networks will form among statesand nonstate actors focused on specific issues.These networks will operate to pursueconvergent goals and interests, including agenuine intent to solve problems, businessself-interest, moral grounds, and the desire of84

international organizations and NGOs to berelevant to the problems facing a changingworld. In some cases, the nucleus of an issuenetwork will be a national or internationalcommission or body of experts—unelectedbut with substantial clout—to report on oroversee some aspects of governance, trade, orother issues. Current examples of suchnetworks include the Financial StabilityForum, the Carbon Sequestration LeadershipForum, and the International Partnership forthe Hydrogen Economy.Issue groups likely will help develop anddiffuse standards and regulations for variousrealms, including information technology(IT), regulatory regimes, and management ofthe “new post-industrial economy.” For somekinds of issues, the networks likely willprovide the basis for agreement amongnation-states. With the groundwork done ininformal contexts, nation-states will be able toadopt problem-solving measures, gaininglegitimacy and sometimes taking credit forinitiatives, while avoiding the stigma ofsolutions being imposed by externalinternational organizations. The numbers andtypes of NGOs could well explode by 2025.Low entry costs, low overhead, and thecapacity of individuals and groups to affiliatewith each other using the Internet willfacilitate such collectives.In addition to such issue groups, a new set ofsocial actors—super-empowered individualsand even criminal networks—increasinglywill influence outcomes. These elites areempowered by their wealth and an array ofnational and transnational contacts—oftentimes spanning businesses, governments,international organizations, and NGOs. Usingtheir broad contacts and multiple nationalidentities, they help leverage “transnational”outcomes across national and organizationalboundaries.“Although religious groups have been agreat beneficiary of globalization, religionalso has the potential to be a primary vehiclefor opposition to that same modernizingprocess.”A Growing Role for Religion. Religionbasednetworks may be quintessential issuenetworks and overall may play a morepowerful role than secular transnationalgroupings in exerting influence and shapingoutcomes in the period out to 2025. Indeed,we could be entering a new age of clericalleadership in which religious leaders becomemajor power brokers in resolving futureinternational disputes and conflicts.Rich rewards in power and influencealready fall to those religiousentrepreneurs and televangelists who spanthe two hemispheres, the Global Southand North—Amir Khalede for Muslimsand Matthew Ashimolowo or SundayAdelaja for Christians. Khalede’s websiteis the third most popular Arabic website inthe world (al-Jazeera’s is number one).Within the Christian tradition, the emergenceof whole new patterns of authority andleadership across the Global South entailsautonomous ministers and religiousentrepreneurs, whose activities reap highstatus and great wealth. Before 2025, someevangelists and megachurch preachersprobably will seek to become the leaders ofnations, especially if those countries havebeen economically devastated during a globaldownturn.Although religious groups have been a greatbeneficiary of globalization, religion also hasthe potential to be a primary vehicle foropposition to that same modernizing process.Religious structures can channel social andpolitical protest, especially for those who lackthe means of communication and influence85

Proliferating Identities and GrowingIntolerance?One aspect of the growing complexity of theinternational system is that no single politicalidentity—such as the conflation of citizenshipand nationality—is likely to be dominant inmost societies by 2025. Class struggles willmatter as much as religion and ethnicity. TheInternet and other multi-media will enable therevitalization of the reach of tribes, clans, andother fealty-driven communities. Explosiveurbanization will facilitate the spread of theseidentities and increase the likelihood ofclashes between groups. The increasingnumbers of migrants moving to cities fromrural areas will coalesce in neighborhoodssettled by previous co-ethnics or will findthemselves targeted for recruitment by gangsand more complex criminal structures. Asthese communities coalesce and become“self-governing” or sometimes co-opted byorganized crime groups, state and localgovernment will face “no-go” areas in manylarge cities as has already happened in citieslike Sao Paulo and Rio de Janeiro.Although inherited and chosen layers ofidentity will be as “authentic” as conventionalcategories of citizenship and nationality, onecategory possibly will continue to stand out.Islam will remain a robust identity. Sectarianand other differences within Islam will be asource of tension or worse. The challenge ofIslamic activism could produce a moreintense backlash of Christian activism.Nigeria, Ethiopia, and other places in Africawill remain battlegrounds in this sectarianstruggle. In 2025, notions of multiethnicintegration and the value of “diversity” couldface a combination of challenges fromnationalists, religious zealots, and perhapssome version of a revived Marxist and otherclass-based or secular ideology.available to social elites. This is relevantbecause many of the economic trends that willdominate the next two decades have thepotential to drive social fragmentation andpopular resentment, including the growinggaps between rich and poor, the urban andrural gulfs in India and China, the vastdisparities between nations and regionsadvantaged or left behind by modernization,and between states able to manage theconsequences of globalization and those withgovernments unable to do so. Religiousactivists can draw on sacred texts and longhistorical tradition to frame populargrievances in terms of social justice rhetoricand egalitarianism.If global economic growth did suffer a severereverse—akin to the Indonesian crisis of thelate 1990s but on a worldwide scale—religiously based rural insurgencies and ethnicstruggles probably would ensue in a numberof countries including Brazil, India, China,and in much of Africa. If even themoderately severe projections of climatechange are correct, the impacts could spurreligious conflict through large sections ofAfrica and Asia. Among the countries atgreatest risk of such conflict and scapegoatingof minority communities are a number ofpredominantly Muslim countries withsignificant Christian minorities (Egypt,Indonesia, and Sudan); predominatelyChristian states with substantial Muslimminorities (e.g., DROC, Philippines, andUganda) or finely balanced between Christianand Muslim (Ethiopia, Nigeria, andTanzania).If religious structures offer vehicles to resistglobalization, they also help people cope withthose same forces, enhancing social stabilityand economic development. Withoutreligious safety nets, the degree of chaos andfragmentation in developing nations would be86

Future of Democracy: Backsliding More Likely than Another WaveWe remain optimistic about the long-term prospects for greater democratization, but advancesare likely to slow and globalization will subject many recently democratized countries toincreasing social and economic pressures that could undermine liberal institutions.Ironically, economic setbacks could enhance prospects for movement toward pluralism andgreater democratization in China and Russia. The Chinese Communist Party’s legitimacyincreasingly rests on its ability to ensure greater material wealth for Chinese society.Resentment of elite corruption is already on the rise but may overwhelm the regime in eventof a serious economic crisis. The government’s standing in Russia would be similarlychallenged if living standards fell dramatically.Elsewhere surveys have shown democracy having taken root, particularly in Sub-SaharanAfrica and Latin America, where opinion views it positively independent of any materialbenefits. Still, nascent democracies have historically been shown to be unstable to the extentthat they lack strong liberal institutions—especially rule of law—which can help supportdemocracy during economic downturns. Case studies suggest widespread corruption isespecially threatening because it undermines faith in democratic institutions.As we have suggested elsewhere in the text, the better economic performance of manyauthoritarian governments could sow doubts among some about democracy as the best formof government. The surveys we consulted indicated that many East Asians put greateremphasis on good management, including increasing standards of livings, than democracy.Elsewhere even in many well-established democracies, surveys show growing frustrationwith the current workings of democratic government and questioning among elites over theability of democratic governments to take the bold actions necessary to deal rapidly andeffectively with the growing number of transnational challenges.far worse. As predominantly rural societieshave become more urban over the last 30 or40 years, millions of migrants have beenattracted to larger urban complexes withoutthe resources or infrastructures to provideadequate healthcare, welfare, and education.The alternative social system provided byreligious organizations has been a potentfactor in winning mass support for religion.This holds across faiths.The weaker the state and its mechanisms, themore critical the role of religious institutionsand the stronger the appeal of religiousideologies, usually of a fundamentalist ortheocratic nature.87

A “Shadow” International System by 2025?Further fragmenting the international systemis the threat posed by growing transnationalcriminal networks in managing the world’sresources—especially global energy,minerals, and other strategic markets—inaddition to their traditional involvement ininternational narcotics trafficking. Increaseddemand for energy worldwide providesopportunities for criminals to expand theiractivities through direct ties to energysuppliers and leaders of countries wheresuppliers are located. With energy suppliesincreasingly concentrated in countries withpoor governance, longstanding practices ofcorruption, and an absence of the rule of law,the potential for penetration by organizedcrime is high.The illicit activities of organized crime inthe energy sector provide affiliatedcompanies with an unfair competitiveadvantage in the global energy market.Over time, given their far-reachingtentacles into government offices andcorporate board rooms, criminals may bein a position to control states andinfluence market actions, if not foreignpolicies. For many resource-richcountries, energy revenues provide thebasis for the whole economy and energypolicies are a key consideration in foreignpolicy decisions.The likelihood of penetration by criminalnetworks is probably greatest in Eurasianmarkets where organized crime has beenan institutionalized part of the politicaland economic environment and whereover time organized crime figures haveevolved into influential businessmen andbecome valuable partners for corruptofficials.As Russian and Eurasian suppliers capturea larger and larger portion of the energymarkets in Europe and Asia, we expectthese organized crime networks to expandtheir operations, fostering greatercorruption and manipulation of foreignpolicies to their advantage.88

Global Scenario IV: Politics IsNot Always LocalIn this fictionalized scenario, a new worldemerges in which nation-states are not incharge of setting the international agenda.The dispersion of power and authority awayfrom nation-states has fostered the growth ofsub-national and transnational entitiesincluding social and political movements.Growing public concerns aboutenvironmental degradation and governmentinaction come together in this example to“empower” a network of political activists towrest control of the issue out of country-levelofficials in capitals. Global communicationstechnology enables individuals to affiliatedirectly with identity-driven groups andnetworks that transcend geographicboundaries. Environmentalism is an issue forwhich there is a widespread confluence ofinterests and desires.Preconditions for this scenario include:National governments’ relevance andpower lessens in an increasinglydecentralized world.Diasporas, labor unions, NGOs, ethnicgroups, religious organizations, and othersacquire significant power and establishformal and informal relationships withstates.Communications technology permitsubiquitous and constant integration intoidentity networks.89

Politics is Not Always LocalSeptember 14, 2024We are in a new era in which governments are no longer king. All of us commentatorstalked a lot about the end of the Westphalian era, but we never really believed it.Moreover it was harder to get our arms around nonstate actors than to report ongovernment ministries with their solid granite foundations and columned porticos. Nowwe have to recognize the new force of these loose networks. Unlike governments, theyactually got something done. They have shown they really matter. I’m talking about thenew climate change treaty that was recently agreed upon—even before the previousone expired—that instituted stricter carbon emissions ceilings and established globalprograms for renewable energy and new technologies to deal with the increasing watersupply problems.Of course, there is no single network and maybe that is the secret. Not only were therevarious national groups, but many of the networks responsible for forcing the climatechange negotiations collected together professional groups, NGOs, and religious groups,across national, class, and cultural divides. The wide deployment of the next-generationInternet (Ubiquitous computing), although done for commercial reasons, greatly facilitatedthe empowerment of these nonstate interest groups.This probably would not have come about without a succession of environmentaldisasters. The New York hurricane was a trigger. Importantly the fact that it happenedabout the time of UNGA, which many of these networks and groups had been scheduledto attend, facilitated the initial coalescence. However, it would not have happenedwithout other events like the cyclone a year earlier that devastated Bangladesh and therecent Intergovernmental Panel on Climate Change report showing much higher levelsof CO2 despite efforts at cutbacks. A crisis atmosphere prevailed. Indeed it was one ofthose moments in history in which a new millennium or apocalyptic atmosphere wasoperating—as if the end of the world was nigh—and immediate action was needed.In a sense, we have reached the Promised Land in which global cooperation is more thana “conspiracy” among elites but bubbles up from the grassroots across historic nationaland cultural divides. We had hoped for this with the European Union but never achievedit. Everyone maintained his narrow parochial viewpoint, speaking first as a Frenchman, orPole, not as a European.A lot of this can be ascribed to the rise of the middle classes in Russia, China, andIndia. Like their Western counterparts before them in the 19th and 20th centuries,they are wealthy enough now to decry the health hazards associated with pollutionand rapid growth. They wanted their governments to take action, but they did not. Themiddle classes have been incensed by the shoddy construction and poor planning that427344ID 11-08

led directly to large numbers of casualties when disasters struck. Anti-corruption andenvironmentalism merged. As the poor in Sub-Saharan Africa and elsewhere sufferedmore and more from climate change, religious activists also became mobilized. Migrantspushed off unproductive land, and unable to get access to clean water technologies,turned to churches for help.Institutions were more savvy than governments in detecting the change. The annualDavos meeting was transformed several years ago. It brought in a host of activists fromthese networks and has since established virtual meetings where thousands more couldparticipate. The pressure became too much for member-states to ignore. The UNGAset aside 20 seats for NGOs who yearly competed among themselves to take up aseat for a year and have the same voting rights as nation-states. International politics isforever changed even though I doubt these networks can be as effective on other issues.The environment was tailor-made because the widespread commonality of interest inavoiding Armageddon. At another time or on a different issue, my guess is national,religious, ethnic, and class differences will resurface. But the achievement stands and theprecedent set will make it hard for governments to ignore NGOs. Maybe they can evenbegin to partner.427344ID 11-08

The United States will have greater impacton how the international system evolves overthe next 15-20 years than any otherinternational actor, but it will have less powerin a multipolar world than it has enjoyed formany decades. Owing to the relative declineof its economic, and to a lesser extent,military power, the US will no longer havethe same flexibility in choosing among asmany policy options. We believe that USinterest and willingness to play a leadershiprole also may be more constrained as theeconomic, military, and opportunity costs ofbeing the world’s leader are reassessed byAmerican voters. Economic and opportunitycosts in particular may cause the US public tofavor new tradeoffs.Developments in the rest of the world,including internal developments in a numberof key states—particularly China andRussia—are also likely to be crucialdeterminants of US policy. A world ofrelatively few conflicts with other majorpowers would smooth the way towarddevelopment of a multipolar system in whichthe US is “first” among equals. In the end,events will shape the parameters of USforeign policy. Contingencies—such as theuse of nuclear weapons or WMD terrorism—could convulse the entire international systemand refocus the US role.Demand for US Leadership Likely toRemain Strong, Capacities will ShrinkDespite the rise in anti-Americanism over thepast decade, the US is still likely to continueto be seen as a much-needed regional balancerin the Middle East and in Asia. A recentsurvey (see box on pages 95-96) indicatesgrowing unease with China’s rise among itsneighbors and, in many regions, a leveling offof antagonism, if not some improvement inattitudes toward the United States. Inaddition to its increasing economic power,China’s military modernization program is agrowing source of concern to its neighbors.The level of concern may rise even if Asia’ssecurity improves, for example, with a PRC-Taiwan accommodation, though in such aneventuality the opposite reaction is alsopossible. In the Middle East, a nuclear Iranwould increase pressure for extension of a USsecurity umbrella to Israel and other states.“Developments in the rest of theworld…particularly [in] China and Russia—are also likely to be crucial determinants ofUS policy.”Other states will continue to seek USleadership on the newer “security” issues,such as climate change. For example, manycountries view US leadership as critical toencouraging major developing countries likeChina and India that are emitters ofgreenhouse gasses to take on seriouscommitments to reduce carbon emissions in apost-2012 emissions control regime. MostG-77 countries realize they are absorbingenvironmental harm from polluters and arenot averse to the US intervening with Beijing.Further, others will seek US leadership oncountering WMD proliferation by taking stepsto dissuade interest in WMD, strengtheningnonproliferation regimes, preventingacquisition of WMD and associated expertiseand technology, rolling back or eliminatingWMD in countries of concern, fosteringdeterrence in the use of WMD, and mitigatingthe consequences of WMD use.New Relationships and Recalibrated OldPartnershipsAn increasingly multipolar world suggests agreater number of actors—includinginfluential nonstate ones—with whom the USand other powers will have to contend.Descent into a world in which mercantilismand resource nationalism become theoverriding modus operandi for others93

probably would narrow the number of USpartners, increasing the risks of tensions, ifnot confrontation among the powers in such azero-sum world. On the other hand, a worldof continuing prosperity would enhanceprospects for greater burden-sharing and stepstowards revitalization of multilateralism andglobal institutions.During the period out to 2025, China andIndia are likely to remain status quo powersfocused on their own development, drawingbenefits from the current system and not tooeager for the US or others to seek radicalchanges to the international order untilBeijing and New Delhi judge that they are ina better position to help set the new rules ofthe road.Although the emerging powers will want topreserve ample leeway and autonomy to exertregional influence independent of the UnitedStates, their relationships with the US arelikely to deepen if their plans for greatereconomic development remain on track.Economic collapse, especially in China’scase, could lead to a nationalistic upsurge andincreased tensions with foreign powers,including the United States.Europe will face difficult domestic challengesthat could constrain its ability to play a largerglobal role, especially in the security realm.A sense of increased threat—whether fromterrorism or a resurgent Russia—couldchange the European calculus on the need formore defense spending and greater capacityfor unified action. Growing interest inMaghreb and Middle East economic andsocial developments increases the potentialfor Europe to play a stabilizing role similar towhat it accomplished with enlargement to theEast. Japan, to keep pace with China, mayincrease its political and security role in theregion. We expect other countries, such asBrazil, to assume more expansive regionalroles and to increase their involvement oncertain key global issues such as trade andclimate change.Current trends suggest Russia has a moreimmediate interest in directly challengingwhat it sees as a US-dominated internationalsystem than do other rising powers. A morediversified economy, development of anindependent middle class, and reliance onforeign technological expertise andinvestment for development of its energyresources could change that trajectory,however. An earlier-than-anticipated moveaway from fossil fuels also could undercutRussia’s recent resurgence.In the Middle East, where the US is likely toremain the dominant external actor, currenttrends suggest a greater role for Asian stateswhich are reinforcing their growing economiclinks with stronger political ties. Asianpowers—in addition to European ones—could seek or be drawn into roles in anyfuture international security effort in theMiddle East. The role of NGOs will growcommensurate with the increase ofhumanitarian needs owing to climate change.In turn, the international community,including the US, will become moredependent on NGOs to shoulder the burden ofhumanitarian relief.Less Financial Margin of ErrorThe dollar is vulnerable to a major financialcrisis and the dollar’s international role islikely to decline from that of the unparalleled“global reserve currency,” to something of afirst among equals in a basket of currenciesby 2025. This could occur suddenly in thewake of a crisis, or gradually with globalrebalancing. This decline will entail realtradeoffs and force new, difficult choices inthe conduct of American foreign policy.94

Anti-Americanism on the Wane?America’s reputation abroad has fluctuated over the decades—from the Ugly American of the1950s to the widespread international protests over Vietnam in the 1960s and 1970s to antinuclearactivism in Europe in the 1980s. Anti-Americanism has experienced an upsurge duringthis decade. Between 2002 and 2007, the US image became less favorable in 27 of 33 countriespolled. Attitudes critical of the United States can be parsed into two basic categories:“Transitory criticism” fueled by disagreements with specific aspects of the United States thatcan change with time, such as its foreign policies.“Anti-Americanism” reflecting deep and undifferentiated antipathy toward most aspects ofthe United States.To the extent that certain aspects of American life—for example, its political system, people,culture, S&T, education, and business practices—are seen abroad as admirable, perceptions ofthe United States will be complex, keeping views flexible and open to revision. The downwardtrajectory of America’s reputation suggested above may have bottomed out. Polling in 2008 byPew’s Global Attitudes Project found US favorability ratings up in 10 of the 21 countries forwhich trend data are available. Looking ahead, what regional drivers and dynamics might bepivotal for encouraging such a turnaround?Europe/Eurasia. In contrast to regions more uniformly pro- or anti-American, Europe/Eurasiatends to hold more volatile views of the US. The views of Western Europeans appear to bebuoyed to the extent that the United States, its key allies, NATO, and the EU deepen practicalmultilateral approaches to international problems. The views of Central and East Europeans,who are traditionally favorable toward the United States, probably will recede over time to theWest European norm. No single set of US actions will reassure all states of the former SovietUnion, but avoiding a heavy movement of military assets into Moscow’s perceived Near Abroadwould stave off the tensest of relations with Russia.Near East/South Asia. Societies most hostile to the United States are found in the IslamicMiddle East, as well as Pakistan and North Africa. India is an important exception. Drivers forturning around the US image include a strong commitment to significant progress onIsrael/Palestine, disentangling anti-terrorism from a perceived war on Islam, and seeking toprovide aid to needy citizens in addition to military-security elites. To the extent Iran isperceived to be a dangerous revisionist power, people and states in the region will tend to viewUS military capability positively.Sub-Saharan Africa. Africa continues to harbor goodwill toward the United States. Publics inSub-Saharan Africa tend to find American lifestyles and standards of living enviable. IfAFRICOM, the new US military command, does not present an overly militarized face tocitizens in African countries, and humanitarian and economic developmental aid continues, thesurveys suggest African opinion about the United States will remain favorable.(Continued on next page…)95

(Continued…)East/Southeast Asia: Views of the United States in this region are relatively positive. DespiteChina’s economic growth, and nascent Asian integration, US “soft power” still eclipses China’s.The United States will continue to be looked to as a reliable security partner in Northeast Asia,and to a lesser extent in Southeast Asia. Public perceptions are at risk of downward swings inChina, depending on portrayals of the United States in the country’s official media.Latin America: On balance, views of the United States are fairly favorable and stable, muchmore so in Central America, but less so in the Andean region. Some level of migration to theUnited States for jobs and subsequent remittance of earnings back to Latin America will be akey. Also important will be the degree to which US and Latin interests are viewed as shared,especially on multilateral tasks such as interdicting illegal drug supplies and combatingorganized crime and gangs.Aggregating across regions, what does the tally sheet of factors affecting anti-Americanism looklike out to 2025? First, factors favorable to the United States:Many state leaders and publics are distrustful of vast power itself, independent of the owner.As China becomes more powerful, some wariness will be displaced onto Beijing, and theUnited States’ own function as a counterweight will become more appreciated.The US is benefiting from a likely turn in the battle of ideas. First, and foremost, support forterrorism has declined dramatically over the last few years in many Muslim countries. FewerMuslims now consider suicide bombing justifiable, and confidence in Usama Bin Ladin haswaned.As big emerging markets in Asia and elsewhere grow, globalization will less often beequated with Americanization. As traditional ways of life are upset around the globe,unwanted foreign ideas and customs will appear more the product of modernity than ofAmerican sprawl.Potentially unfavorable would be perceived slowness in tackling pressing transnational problemssuch as global climate change, food security, and energy security. A currently indeterminatefactor will be the effect of increasingly pervasive mobile telephony, Internet connectivity, anddirect satellite media on how individuals around the world receive their images of the UnitedStates. On balance, however, major trends suggest that anti-Americanism is declining.96

The dollar’s global reserve status confersprivileges on the US including insulationfrom risk of currency shocks, whichenables lower interest rates, while a steadysource of outside demand for US dollarsaffords the US a unique ability to runlarge fiscal account deficits withoutreproach from the global economy.Enjoyed by the US for more than 60 years,these privileges have perhaps so permeatedUS thinking as to go unnoticed. While totalloss of reserve status is unlikely, the dollar’sdecline may force the US into difficulttradeoffs between achieving ambitiousforeign policy goals and the high domesticcosts of supporting those objectives. In theface of higher interest rates, higher taxes, andpotential oil shocks, the US public wouldhave to weigh the economic consequences oftaking strong military action, for example.The impact on others desirous of a strongerUS role could be equally great if the USwould decline or be unwilling to take action.In addition, US financial dependence onexternal powers for fiscal stability may curtailUS freedom of action in unanticipated ways.More Limited Military SuperiorityIn 2025, the US will still retain uniquemilitary capabilities, especially its ability toproject military power globally, that othernations will continue to envy and rely on tosecure a safer world. The United States’ability to protect the “global commons” andensure the free flow of energy could gaingreater prominence as concerns over energysecurity grow. The US also will continue tobe viewed as the security partner of choice bymany states confronted with the rise ofpotential hostile nuclear powers. Althoughthe emergence of new nuclear-weapon statesmay constrain US freedom of action, USmilitary superiority in both conventional andnuclear weapons and missile defensecapabilities will be a critical element indeterring openly aggressive behavior on thepart of any new nuclear states. The US willalso be expected to play a significant role inusing its military power to counter globalterrorism.“Anticipated developments in the securityenvironment leading to 2025 may raisequestions about traditional US advantages inconventional military power.”However, potential US adversaries willcontinue to try to level the playing field bypursuing asymmetrical strategies designed toexploit perceived US military and politicalvulnerabilities. In the future, advanced statesmight engage in counterspace strikes, networkattacks, and information warfare to disrupt USmilitary operations on the eve of a conflict.Cyber and sabotage attacks on critical USeconomic, energy, and transportationinfrastructures might be viewed by someadversaries as a way to circumvent USstrengths on the battlefield and attack directlyUS interests at home. In addition, thecontinued proliferation of long-range missilesystems, anti-access capabilities, and nuclearweapons and other forms of WMD might beperceived by potential adversaries and USallies alike as increasingly constraining USfreedom of action in time of crisis despite USconventional military superiority.Traditional US allies, particularly Israeland Japan, could come to feel less securein 2025 than they do today as a result ofemerging unfavorable demographic trendswithin their respective countries, resourcescarcities, and more intensive militarycompetitions in the Middle East and EastAsia, especially if there is also doubtabout the vitality of US securityguarantees.97

Surprises and UnintendedConsequencesAs we have made clear throughout thisvolume, the next 15-20 years contain morecontingencies than certainties. All actors—not just the United States—will be affected byunforeseen “shocks.” For various reasons theUS appears better able than most to absorbthose shocks, but US fortunes also ride on thestrength and resiliency of the entireinternational system, which we judge to bemore fragile and less prepared for theimplications of obvious trends like energysecurity, climate change, and increasedconflict, let alone surprises.While, by their nature, surprises are not easilyanticipated, we have tried through thescenarios to lay out possible alternativefutures and each is suggestive of possiblechanges in the US role.A World Without the West. In this scenariothe US withdraws and its role is diminished.In dealing with unstable parts of the world inits neighborhood like Afghanistan, China, andIndia, the Central Asians must form or bolsterother partnerships—in this case the ShanghaiCooperation Organization. The fragmentationand breakdown of the global order intoregional and other blocs—while not on thescale of US-Soviet bipolar split—probablywould usher in an era of slower economicgrowth and globalization, less effective actionon transnational issues like climate changeand energy security, and the potential forincreased political instability.October Surprise. The lack of effectivemanagement of the tradeoffs amongglobalization, economic growth, andenvironmental damage is shared widelyamong more players than the US. Implicit inthe scenario is the need for better USleadership and stronger multilateralinstitutions if the world is to avoid even moredevastating crises. The results ofmiscalculation on the part of others—such asthe Chinese—have significant political costs,which probably would make it more difficultfor the US and others to put together a planfor more sustainable economic development,including conflicts among the major powers.BRICs’ Bust-Up. In this scenario, growinggreat power rivalries and increasing energyinsecurity lead to a military confrontationbetween India and China. The US isperceived by Beijing as favoring India toChina’s detriment. Great power war isaverted, but the protagonists must rely on athird party—in this case Brazil—to helpreconstitute the international fabric. Giventhe BRICs’ disarray, the United States’ poweris greatly enhanced, but the internationalsystem is in for a bumpy ride as the militaryclash leads to internal upheavals increasingnationalist fervor.Politics Is Not Always Local. On someissues, such as the environment, a seismicshift in government versus nonstate actorauthorities has occurred. For the first time, acoalition of nonstate actors is seen by a largenumber of electorates as better representing“planetary” interests and, in this scenario,governments must heed their advice or faceserious political costs. This may not alwaysbe the case since on other more traditionalnational security issues, national, ethnic, classand other differences are likely to re-emerge,undercutting the clout of transnationalpolitical movements. The US, like othergovernments, must adapt to the changingpolitical landscape.Leadership Will Be KeyAs we indicated at the beginning of the study,human actions are likely to be the crucialdeterminant of the outcomes. Historically, aswe have pointed out, leaders and their ideas—positive and negative—were among the98

iggest game-changers during the lastcentury. Individually and collectively overthe next 15-20 years, leaders are likely to becrucial to how developments turn out,particularly in terms of ensuring a morepositive outcome. As we have emphasized,today’s trends appear to be heading toward apotentially more fragmented and conflictedworld over the next 15-20 years, but badoutcomes are not inevitable. Internationalleadership and cooperation will be necessaryto solve the global challenges and tounderstand the complexities surroundingthem. This study is meant as an aid in thatprocess: by laying out some of the alternativepossibilities we hope to help policymakerssteer us toward positive solutions.99