What the world will look like in 2025-By Marvi Memon

An understanding of various intelligentsia analysis on the shape of the international system in 2025 is critical for us to better position ourselves in the comity of nations in this highly globalised and competitive system. Globalisation brings greater wealth and increased inequalities. By 2025 the shift of wealth from west to east will be complete. Along with this, the great game for energy resources, coupled with demographic shifts and climate change, will make the world trends competitive.

Demographic trends, which are drivers for growth, will change for different parts of the world. Some statistics are important. The world population is projected to grow from 6.5 billion people in 2005 to 8 billion people in 2025 with all its effects on scarcity of resources. According to the World Bank, by 2025 the developing world will move into a “global middle class” and will grow from 440 million to 1.2 billion or for 7.6 percent of the world’s population to 16.1 percent; this growth will be contributed by China and India mainly. Interestingly, by 2025-2030, those considered poor in the world will shrink by about 23 percent. However, the global income of these poor will also shrink by 40 percent. The eight largest economies in 2025 will be the following: the US, China, Japan, India, Russia, Germany, the UK and France.

China and India will be the most populous regions. China’s demographic dividend will cease around 2015, when aging will begin and the controlled population strategy will provide a drop in productivity. At the same time, nearly half of India’s population of 1.5 billion will be under the age of 30. Even though this has certain GDP growth advantages, it could also lead to more tension and instability as India will continue to have illiteracy rates of at least 35 per cent. An illiterate population overcrowding the urban districts is likely to create volatility, shifting workers from the densely-population north to the south, causing more tensions.

Demographically, the west’s ability to shape globalisation will be limited by its coming-of-age syndrome. In 2025 only 16 percent of the world’s population will live in the west, down from 24 percent in 1980. Growing unemployment in the west will make labour laws tougher and unskilled workers’ entries into west from east more difficult. Violence as a result of inequalities, racism and blockage of entry is expected in the western countries.

Russia’s demographic position will worsen by 2025. Population of younger men and women will decline. Muslim minorities will have better fertility rates, and Turkic Chinese and Asian immigrants will increase in Russia. Japan, due to its demographic weaknesses, will have to rely on technological innovation to compensate for decline in workers. Youthful societies will surface around Latin America, sub-Saharan Africa, the Middle East, and the northern parts of South Asia. The Populations of Pakistan Afghanistan, Nigeria, Yemen, Ethiopia, and Congo are projected to be on an upward trajectory. Young demographics are supposed to lead to political violence and civil conflict in these countries. Fifty-seven percent of the world will live in urban areas, up from 50 percent today. By 2025, eight more megacities which will be added to the list of the current 19. Migration from poorer countries to richer will cause political issues.

With such demographic shifts the resource scrambles will be equally interesting. Globalisation leads to global growth, which leads to strain on the world’s strategic resources, including energy, food and water supplies, thus increasing the levels of resource competition. Climate change will make this competition more acute even though its exact impact will be spread unevenly over different regions of the world. The response strategy to these challenges will have to be in the form of introduction of new technologies to provide solutions. With China and India scrambling for energy, they will push for blue water navies and presence in Africa. This will lead to their scramble for political power in these regions as well.

By 2025 China is expected to be the leading military power, the world’s second largest economy, the largest importer of natural resources and the biggest polluter of all times. This will pose the US with a direct challenger. State-owned enterprises will take pre-eminence by 2025 and energy diversification will be through them. The specialty in terms of industry sectors for each emerging market economy is likely to be as follows: Brazilian in agribusiness and offshore energy exploration; Russian in energy and metals; Indian in IT services, pharmaceuticals, and auto parts; and Chinese in steel, home appliances, and telecommunications equipments. The SOEs are expected to raise political tensions creating public backlash in Western countries against foreign trade and investment.

Russia which will be sandwiched between resource hungry east and resource poor west will use its energy resources to create clout but could suffer if alternative energy options are discovered sooner. Brazil and Indonesia have the potential to rise and so do Saudi Arabia and Iran. If alternative fuels are found faster, the international system could witness massive shifts of power and thus more instability.

With fuel alternative drive, food for fuel will increase demand for food by 50 percent leading to more riots and violence. Many countries eager to cut back on foreign energy imports will concentrate on coal for electricity generation but whether these will be environmentally friendly techniques or not is doubtful. China, US, India and Russia which have the world’s largest coal reserves will use this option to grow their energy resources. China will overtake US in terms of carbon emission. New technology structures for new energy types will take at least 25 years to build and thus will not be so easily constructed.

States lose 30-50 percent of their GDP due to the import of energy. This in the future risks leading to state failure. Those states who have a large import dependence, low GDP per capita, high current account deficits, heavy international indebtedness have a chance of being declared failed state sooner than others. Whilst it is possible that due to lower demands of increased fuel prices, the prices may go down, such a scenario will lead to instability within states like Iran who are investing their future growth and escape from poverty on higher oil prices.

China’s energy needs will necessitate stronger ties with Saudi Arabia; it will try to balance these out with stronger ties with Iran. India will try and make energy overtures in Iran and Central Asia. The prized fuel will be natural gas. By 2025 consumption of gas will grow by 60 percent. The three countries holding 57 percent of world’s natural gas will be in a prime position: Russia, Iran, Qatar.

Due to climate change certain natural disasters could reduce state size, increase health issues in the areas around the equator especially, bringing more poverty and misery to these populations. Whilst the emerging giants will compete for aid provision and thus political clout in these disaster stricken areas, the concept of climate migrants will grow. Climate change with water scarcity around Himalayan belt with lead to water conflicts in those countries.

Pakistan’s position in such a world needs careful strategizing from today and in fact since yesterday. Political leadership needs to not only save Pakistan falling into state failure immediately, it needs to plan for 2025 with the ownership of all political elements. Short of this, Pakistan’s prospects as painted by world intelligentsia are very worrying.

The writer is a member of the National Assembly from the PML-Q. Email: marvi.memon@gmail.com

Courtesy: The News, 15/8/2008

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