US forecast as no. 2 economy, but energy independent

US forecast as no. 2 economy, but energy independent
Washington:  A new intelligence assessment of global trends projects that China will outstrip the United States as the leading economic power before 2030, but that America will remain an indispensable world leader, bolstered in part by an era of energy independence.

Russia's clout will wane, as will the economic strength of other countries reliant on oil for revenues, the assessment says.

The product of four years of intelligence-gathering and analysis, the study, by the National Intelligence Council, presents grounds for optimism and pessimism in nearly equal measure. The council reports to the director of national intelligence and has responsibilities for long-term strategic analysis.

One remarkable development it anticipates is a spreading affluence that leads to a larger global middle class that is better educated and has wider access to health care and new communications technologies like the Internet and smartphones. The report assesses global trends to 2030.

"The growth of the global middle class constitutes a tectonic shift," the study states, saying that billions of people will gain new individual power as they climb out of poverty.

"For the first time, a majority of the world's population will not be impoverished, and the middle classes will be the most important social and economic sector in the vast majority of countries around the world."

At the same time, it warns, half of the world's population probably will be living in areas that suffer severe shortages of fresh water, meaning that management of natural resources will be a key component of global national security efforts.

But these developments also bring significant risks, allowing radicalized groups to enter world politics on a scale even more violent than current terrorist organizations by adopting "lethal and disruptive technologies," including biological weapons and cyberweapons.

The study warns of the risk that terrorists could mount a computer-network attack in which the casualties would be measured not by the hundreds or thousands killed but by the millions severely affected by damaged infrastructure, like electrical grids' being taken down.

"There will not be any hegemonic power," the 166-page report states. "Power will shift to networks and coalitions in a multipolar world."

It warns that at least 15 countries are "at high risk of state failure" by 2030, among them Afghanistan and Pakistan, but also Somalia, Burundi, Rwanda, Yemen and Uganda.

The study acknowledges that the future "is malleable," and lists important "game-changers" that will most influence the global scene to 2030: a crisis-prone world economy, shortcomings in governance, conflicts within states and between them, the impact of new technologies and whether the United States can "work with new partners to reinvent the international system."

The best-case situation for global security to 2030, according to the study, would be a growing political partnership between the United States and China. But it could take a crisis to bring Washington and Beijing together - something like a nuclear standoff between India and Pakistan resolved only by bold cooperation between the United States and China.

The worst-case situation envisions a stalling of economic globalization that would preclude any advancement of financial well-being around the world. That would be a likely outcome following an outbreak of a health pandemic that, even if short-lived, would result in closed borders and economic isolationism.

The chief author and manager of the project, Mathew Burrows, who is counselor for the National Intelligence Council, said the findings had been presented in advance in more than 20 nations to groups of academic experts, business leaders and government officials, including local intelligence officers.

In an interview, Mr. Burrows noted that the audiences in China were far more accepting of the American intelligence assessments - both those predicting China's economic ascendancy and those warning of political dangers if there was no reform of governance in Beijing - than were audiences in Russia.

To assess the validity of this study, the research and analysis team graded their past work on global trends, an effort undertaken every four years since 1996. Past studies, they found, had underestimated the speed with which changes arrived on the global scene.

About 50 countries around the world will be at risk of internal conflict or wars with neighbors, the study says, most sparked by increasing nationalism and border rivalries fought out in the absence of any regional security architecture to resolve them.

The risk of conflict within a state - like a civil war or an insurgency - is expected to decline in Latin America, but will remain high in sub-Saharan Africa, in parts of the Middle East and South Asia, as well as in some Asia-Pacific island hot spots, the study warns.

"A more fragmented international system increases the risks" of conflict between states, the study also cautions. "Additionally, increased resource competition, spread of lethal technologies and spillover from regional conflicts increase the potential for interstate conflicts."

Most worrisome - and already part of the global security dynamic - is an assessment that future wars in Asia and the Middle East could include nuclear weapons.

Other important demographic trends will be aging populations in Europe, Japan, South Korea and Taiwan, which could slow their economies further. The report warns that Russia's economy will join these nations in their "slow relative declines." The United States will benefit from its domestic oil and natural gas supplies and new technologies to tap them, allowing the nation to become energy independent and even a net exporter of fuel.

"China alone will probably have the largest economy, surpassing that of the United States a few years before 2030," the report states.

In general, it found, "the health of the global economy increasingly will be linked to how well the developing world does - more so than the traditional West."

In addition to China, the developing nations that "will become especially important to the global economy" include India, Brazil, Colombia, Indonesia, Nigeria, South Africa and Turkey.
© 2012, The New York Times News Service
Story First Published: December 10, 2012 20:19 IST

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