NIC 2004-13

 

Report of the National Intelligence Council’s

2020 Project

Based on consultations with nongovernmental

experts around the world

December 2004

To obtain a copy of this publication, please contact:

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GPO Stock 041-015-0024-6; ISBN 0-16-073-218-2.



Contents Page

Executive Summary 9

Methodology 19

Introduction 25

The Contradictions of Globalization

An Expanding and Integrating Global Economy

The Technology Revolution

Lingering Social Inequalities

Fictional Scenario: Davos World 

27

29

34

37

40

Rising Powers: The Changing Geopolitical Landscape

Rising Asia

Other Rising States?

The “Aging” Powers

Growing Demands for Energy

US Unipolarity—How Long Can It Last?

Fictional Scenario: Pax Americana 

47

48

51

56

59

63

64

New Challenges to Governance

Halting Progress on Democratization

Identity Politics

Fictional Scenario: A New Caliphate 

73

73

79

83

Pervasive Insecurity

Transmuting International Terrorism

Intensifying Internal Conflicts

Rising Powers: Tinder for Conflict?

The WMD Factor

Fictional Scenario: Cycle of Fear 

93

93

97

98

100

104

Policy Implications 111
4
5

Graphics and Tables

China’s and India’s Per Capita GDPs Rising Against US 31

When China’s and India’s GDPs Would Exceed Today’s Rich Countries 32

Telescoping the Population of the World to 2020 48

China’s Rise 50

Projected Rise in Defense Spending, 2003–2025 51

Fossil Fuels Will Continue to Dominate in 2020 59

An Expanding European Union 60

Number of Religious Adherents, 1900–2025 80

Key Areas of Radical Islamic Activities Since 1992 82

EU: Estimated and Projected Muslim Population, 1985–2025 83

Global Trends in Internal Conflict, 1990-2003 101
6
7

Special Topics

The 2020 Global Landscape 8

Mapping the Global Future 26

What Would an Asian Face on Globalization Look Like? 28

What Could Derail Globalization? 30

Biotechnology: Panacea and Weapon 36

The Status of Women in 2020 38

Risks to Chinese Economic Growth 52

India vs. China: Long-Term Prospects 53

Asia: The Cockpit for Global Change? 55

Global Aging and Migration 58

Could Europe Become A Superpower? 61

The Geopolitics of Gas 62

Eurasian Countries: Going Their Separate Ways? 74

Climate Change and Its Implications Through 2020 76

Latin America in 2020: Will Globalization Cause the Region to Split? 78

Organized Crime 96

Cyber Warfare? 97

How Can Sub-Saharan Africa Move Forward? 99

International Institutions in Crisis 102

The Rules of War: Entering “No Man’s Land” 103

Post-Combat Environments Pose the Biggest Challenge 104

Is the United States’ Technological Prowess at Risk? 112

How the World Sees the United States 114
8

The 2020 Global Landscape

Relative Certainties Key Uncertainties

Globalization largely irreversible,

likely to become less Westernized.

Whether globalization will pull in lagging

economies; degree to which Asian countries set

new “rules of the game.”

World economy substantially larger. Extent of gaps between “haves” and “have-nots”;

backsliding by fragile democracies; managing or

containing financial crises.

Increasing number of global firms

facilitate spread of new technologies.

Extent to which connectivity challenges

governments.

Rise of Asia and advent of possible

new economic middle-weights.

Whether rise of China/India occurs smoothly.

Aging populations in established

powers.

Ability of EU and Japan to adapt work forces,

welfare systems, and integrate migrant

populations; whether EU becomes a superpower.

Energy supplies “in the ground”

sufficient to meet global demand.

Political instability in producer countries; supply

disruptions.

Growing power of nonstate actors. Willingness and ability of states and international

institutions to accommodate these actors.

Political Islam remains a potent force. Impact of religiosity on unity of states and potential

for conflict; growth of jihadist ideology.

Improved WMD capabilities of some

states.

More or fewer nuclear powers; ability of terrorists

to acquire biological, chemical, radiological, or

nuclear weapons.

Arc of instability spanning Middle

East, Asia, Africa.

Precipitating events leading to overthrow of

regimes.

Great power conflict escalating into

total war unlikely.

Ability to manage flashpoints and competition for

resources.

Environmental and ethical issues

even more to the fore.

Extent to which new technologies create or resolve

ethical dilemmas.

US will remain single most powerful

actor economically, technologically,

militarily.

Whether other countries will more openly

challenge Washington; whether US loses S&T

edge.
9

Executive Summary

At no time since the formation of the Western alliance system in 1949 have the

shape and nature of international alignments been in such a state of flux. The end

of the Cold War shifted the tectonic plates, but the repercussions from these momentous

events are still unfolding. Emerging powers in Asia, retrenchment in Eurasia, a roiling

Middle East, and transatlantic divisions are among the issues that have only come to a

head in recent years. The very magnitude and speed of change resulting from a

globalizing world—apart from its precise character—will be a defining feature of the

world out to 2020. Other significant characteristics include: the rise of new powers, new

challenges to governance, and a more pervasive sense of insecurity, including terrorism.

As we map the future, the prospects for increasing global prosperity and the limited

likelihood of great power conflict provide an overall favorable environment for coping

with what are otherwise daunting challenges. The role of the United States will be an

important variable in how the world is shaped, influencing the path that states and

nonstate actors choose to follow.

New Global Players

The likely emergence of China and India, as well as others, as new major global

players—similar to the advent of a united Germany in the 19th century and a

powerful United States in the early 20th century—will transform the geopolitical

landscape, with impacts potentially as dramatic as those in the previous two

centuries. In the same way that commentators refer to the 1900s as the “American

Century,” the 21st century may be seen as the time when Asia, led by China and India,

comes into its own. A combination of sustained high economic growth, expanding

military capabilities, and large populations will be at the root of the expected rapid rise in

economic and political power for both countries.

• Most forecasts indicate that by 2020 China’s gross national product (GNP) will

exceed that of individual Western economic powers except for the United States.

India’s GNP will have overtaken or be on the threshold of overtaking European

economies.

• Because of the sheer size of China’s and India’s populations—projected by the US

Census Bureau to be 1.4 billion and almost 1.3 billion respectively by 2020—their

standard of living need not approach Western levels for these countries to become

important economic powers.

Barring an abrupt reversal of the process of globalization or any major upheavals in

these countries, the rise of these new powers is a virtual certainty. Yet how China and

India exercise their growing power and whether they relate cooperatively or

competitively to other powers in the international system are key uncertainties. The

economies of other developing countries, such as Brazil, could surpass all but the

largest European countries by 2020; Indonesia’s economy could also approach the

economies of individual European countries by 2020.
10

By most measures—market size, single currency, highly skilled work force, stable

democratic governments, and unified trade bloc—an enlarged Europe will be able to

increase its weight on the international scene. Europe’s strength could be in providing a

model of global and regional governance to the rising powers. But aging populations

and shrinking work forces in most countries will have an important impact on the

continent. Either European countries adapt their work forces, reform their social

welfare, education, and tax systems, and accommodate growing immigrant populations

(chiefly from Muslim countries), or they face a period of protracted economic stasis.

Japan faces a similar aging crisis that could crimp its longer run economic recovery, but

it also will be challenged to evaluate its regional status and role. Tokyo may have to

choose between “balancing” against or “bandwagoning” with China. Meanwhile, the

crisis over North Korea is likely to come to a head sometime over the next 15 years.

Asians’ lingering resentments and concerns over Korean unification and cross-Taiwan

Strait tensions point to a complicated process for achieving regional equilibrium.

Russia has the potential to enhance its international role with others due to its position

as a major oil and gas exporter. However, Russia faces a severe demographic crisis

resulting from low birth rates, poor medical care, and a potentially explosive AIDS

situation. To the south, it borders an unstable region in the Caucasus and Central Asia,

the effects of which—Muslim extremism, terrorism, and endemic conflict—are likely to

continue spilling over into Russia. While these social and political factors limit the

extent to which Russia can be a major global player, Moscow is likely to be an important

partner both for the established powers, the United States and Europe, and for the

rising powers of China and India.

With these and other new global actors, how we mentally map the world in 2020 will

change radically. The “arriviste” powers—China, India, and perhaps others such as

Brazil and Indonesia—have the potential to render obsolete the old categories of East

and West, North and South, aligned and nonaligned, developed and developing.

Traditional geographic groupings will increasingly lose salience in international relations.

A state-bound world and a world of mega-cities, linked by flows of telecommunications,

trade and finance, will co-exist. Competition for allegiances will be more open, less

fixed than in the past.

Impact of Globalization

We see globalization—growing interconnectedness reflected in the expanded flows of

information, technology, capital, goods, services, and people throughout the world—as

an overarching “mega-trend,” a force so ubiquitous that it will substantially shape

all the other major trends in the world of 2020. But the future of globalization is not

fixed; states and nonstate actors—including both private companies and NGOs—will

struggle to shape its contours. Some aspects of globalization—such as the growing

global interconnectedness stemming from the information technology (IT) revolution—

almost certainly will be irreversible. Yet it is also possible, although unlikely, that the

process of globalization could be slowed or even stopped, just as the era of globalization
11

in the late 19th and early 20th centuries was reversed by catastrophic war and global

depression.

Barring such a turn of events, the world economy is likely to continue growing

impressively: by 2020, it is projected to be about 80 percent larger than it was in

2000, and average per capita income will be roughly 50 percent higher. Of course,

there will be cyclical ups and downs and periodic financial or other crises, but this basic

growth trajectory has powerful momentum behind it. Most countries around the world,

both developed and developing, will benefit from gains in the world economy. By

having the fastest-growing consumer markets, more firms becoming world-class

multinationals, and greater S&T stature, Asia looks set to displace Western countries as

the focus for international economic dynamism—provided Asia’s rapid economic growth

continues.

Yet the benefits of globalization won’t be global. Rising powers will see exploiting

the opportunities afforded by the emerging global marketplace as the best way to assert

their great power status on the world stage. In contrast, some now in the “First World”

may see the closing gap with China, India, and others as evidence of a relative decline,

even though the older powers are likely to remain global leaders out to 2020. The

United States, too, will see its relative power position eroded, though it will remain in

2020 the most important single country across all the dimensions of power. Those left

behind in the developing world may resent China and India’s rise, especially if they feel

squeezed by their growing dominance in key sectors of the global marketplace. And

large pockets of poverty will persist even in “winner” countries.

The greatest benefits of globalization will accrue to countries and groups that can

access and adopt new technologies. Indeed, a nation’s level of technological

achievement generally will be defined in terms of its investment in integrating and

applying the new, globally available technologies—whether the technologies are

acquired through a country’s own basic research or from technology leaders. The

growing two-way flow of high-tech brain power between the developing world and the

West, the increasing size of the information computer-literate work force in some

developing countries, and efforts by global corporations to diversify their high-tech

operations will foster the spread of new technologies. High-tech breakthroughs—such

as in genetically modified organisms and increased food production—could provide a

safety net eliminating the threat of starvation and ameliorating basic quality of life issues

for poor countries. But the gap between the “haves” and “have-nots” will widen unless

the “have-not” countries pursue policies that support application of new technologies—

such as good governance, universal education, and market reforms.

Those countries that pursue such policies could leapfrog stages of development,

skipping over phases that other high-tech leaders such as the United States and Europe

had to traverse in order to advance. China and India are well positioned to become

technology leaders, and even the poorest countries will be able to leverage

prolific, cheap technologies to fuel—although at a slower rate—their own

development.
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• The expected next revolution in high technology involving the convergence of nano-,

bio-, information and materials technology could further bolster China and India’s

prospects. Both countries are investing in basic research in these fields and are well

placed to be leaders in a number of key fields. Europe risks slipping behind Asia in

some of these technologies. The United States is still in a position to retain its

overall lead, although it must increasingly compete with Asia to retain its edge and

may lose significant ground in some sectors.

More firms will become global, and those operating in the global arena will be

more diverse, both in size and origin, more Asian and less Western in orientation.

Such corporations, encompassing the current, large multinationals, will be

increasingly outside the control of any one state and will be key agents of change

in dispersing technology widely, further integrating the world economy, and

promoting economic progress in the developing world. Their ranks will include a

growing number based in such countries as China, India, or Brazil. While North

America, Japan, and Europe might collectively continue to dominate international

political and financial institutions, globalization will take on an increasingly non-Western

character. By 2020, globalization could be equated in the popular mind with a rising

Asia, replacing its current association with Americanization.

An expanding global economy will increase demand for many raw materials, such as oil.

Total energy consumed probably will rise by about 50 percent in the next two decades

compared to a 34 percent expansion from 1980-2000, with a greater share provided by

petroleum. Most experts assess that with substantial investment in new capacity,

overall energy supplies will be sufficient to meet global demands. But on the supply

side, many of the areas—the Caspian Sea, Venezuela, and West Africa—that are being

counted on to provide increased output involve substantial political or economic risk.

Traditional suppliers in the Middle East are also increasingly unstable. Thus sharper

demand-driven competition for resources, perhaps accompanied by a major

disruption of oil supplies, is among the key uncertainties.

• China, India, and other developing countries’ growing energy needs suggest a

growing preoccupation with energy, shaping their foreign policies.

• For Europe, an increasing preference for natural gas may reinforce regional

relationships—such as with Russia or North Africa—given the interdependence of

pipeline delivery.

New Challenges to Governance

The nation-state will continue to be the dominant unit of the global order, but

economic globalization and the dispersion of technologies, especially

information technologies, will place enormous new strains on governments.

Growing connectivity will be accompanied by the proliferation of virtual communities of

interest, complicating the ability of states to govern. The Internet in particular will spur
13

the creation of even more global movements, which may emerge as a robust force in

international affairs.

Part of the pressure on governance will come from new forms of identity politics

centered on religious convictions. In a rapidly globalizing world experiencing population

shifts, religious identities provide followers with a ready-made community that serves as

a “social safety net” in times of need—particularly important to migrants. In particular,

political Islam will have a significant global impact leading to 2020, rallying

disparate ethnic and national groups and perhaps even creating an authority that

transcends national boundaries. A combination of factors—youth bulges in many

Arab states, poor economic prospects, the influence of religious education, and the

Islamization of such institutions as trade unions, nongovernmental organizations, and

political parties—will ensure that political Islam remains a major force.

• Outside the Middle East, political Islam will continue to appeal to Muslim migrants

who are attracted to the more prosperous West for employment opportunities but do

not feel at home in what they perceive as an alien and hostile culture.

Regimes that were able to manage the challenges of the 1990s could be overwhelmed

by those of 2020. Contradictory forces will be at work: authoritarian regimes will face

new pressures to democratize, but fragile new democracies may lack the adaptive

capacity to survive and develop.

The so-called “third wave” of democratization may be partially reversed by

2020—particularly among the states of the former Soviet Union and in Southeast

Asia, some of which never really embraced democracy. Yet democratization and

greater pluralism could gain ground in key Middle Eastern countries which thus far have

been excluded from the process by repressive regimes.

With migration on the increase in several places around the world—from North Africa

and the Middle East into Europe, Latin America and the Caribbean into the United

States, and increasingly from Southeast Asia into the northern regions—more countries

will be multi-ethnic and will face the challenge of integrating migrants into their societies

while respecting their ethnic and religious identities.

Chinese leaders will face a dilemma over how much to accommodate pluralistic

pressures to relax political controls or risk a popular backlash if they do not. Beijing

may pursue an “Asian way of democracy,” which could involve elections at the local

level and a consultative mechanism on the national level, perhaps with the Communist

Party retaining control over the central government.

With the international system itself undergoing profound flux, some of the

institutions that are charged with managing global problems may be

overwhelmed by them. Regionally based institutions will be particularly challenged to

meet the complex transnational threats posed by terrorism, organized crime, and WMD

proliferation. Such post-World War II creations as the United Nations and the
14

international financial institutions risk sliding into obsolescence unless they adjust to the

profound changes taking place in the global system, including the rise of new powers.

Pervasive Insecurity

We foresee a more pervasive sense of insecurity—which may be as much based on

psychological perceptions as physical threats—by 2020. Even as most of the world

gets richer, globalization will profoundly shake up the status quo—generating

enormous economic, cultural, and consequently political convulsions. With the

gradual integration of China, India, and other emerging countries into the global

economy, hundreds of millions of working-age adults will become available for

employment in what is evolving into a more integrated world labor market.

• This enormous work force—a growing portion of which will be well educated—will be

an attractive, competitive source of low-cost labor at the same time that

technological innovation is expanding the range of globally mobile occupations.

• The transition will not be painless and will hit the middle classes of the

developed world in particular, bringing more rapid job turnover and requiring

professional retooling. Outsourcing on a large scale would strengthen the antiglobalization movement. Where these pressures lead will depend on how political

leaders respond, how flexible labor markets become, and whether overall economic

growth is sufficiently robust to absorb a growing number of displaced workers.

Weak governments, lagging economies, religious extremism, and youth bulges

will align to create a perfect storm for internal conflict in certain regions. The

number of internal conflicts is down significantly since the late 1980s and early 1990s

when the breakup of the Soviet Union and Communist regimes in Central Europe

allowed suppressed ethnic and nationalistic strife to flare. Although a leveling off point

has been reached where we can expect fewer such conflicts than during the last

decade, the continued prevalence of troubled and institutionally weak states means that

such conflicts will continue to occur.

Some internal conflicts, particularly those that involve ethnic groups straddling national

boundaries, risk escalating into regional conflicts. At their most extreme, internal

conflicts can result in failing or failed states, with expanses of territory and populations

devoid of effective governmental control. Such territories can become sanctuaries for

transnational terrorists (such as al-Qa’ida in Afghanistan) or for criminals and drug

cartels (such as in Colombia).

The likelihood of great power conflict escalating into total war in the next 15 years

is lower than at any time in the past century, unlike during previous centuries

when local conflicts sparked world wars. The rigidities of alliance systems before

World War I and during the interwar period, as well as the two-bloc standoff during the

Cold War, virtually assured that small conflicts would be quickly generalized. The

growing dependence on global financial and trade networks will help deter interstate
15

conflict but does not eliminate the possibility. Should conflict occur that involved one or

more of the great powers, the consequences would be significant. The absence of

effective conflict resolution mechanisms in some regions, the rise of nationalism in

some states, and the raw emotions and tensions on both sides of some issues—for

example, the Taiwan Strait or India/Pakistan issues—could lead to miscalculation.

Moreover, advances in modern weaponry—longer ranges, precision delivery, and more

destructive conventional munitions—create circumstances encouraging the preemptive

use of military force.

Current nuclear weapons states will continue to improve the survivability of their

deterrent forces and almost certainly will improve the reliability, accuracy, and lethality

of their delivery systems as well as develop capabilities to penetrate missile defenses.

The open demonstration of nuclear capabilities by any state would further discredit the

current nonproliferation regime, cause a possible shift in the balance of power, and

increase the risk of conflicts escalating into nuclear ones. Countries without nuclear

weapons—especially in the Middle East and Northeast Asia—might decide to

seek them as it becomes clear that their neighbors and regional rivals are doing

so. Moreover, the assistance of proliferators will reduce the time required for additional

countries to develop nuclear weapons.

Transmuting International Terrorism

The key factors that spawned international terrorism show no signs of abating

over the next 15 years. Facilitated by global communications, the revival of Muslim

identity will create a framework for the spread of radical Islamic ideology inside and

outside the Middle East, including Southeast Asia, Central Asia and Western Europe,

where religious identity has traditionally not been as strong. This revival has been

accompanied by a deepening solidarity among Muslims caught up in national or

regional separatist struggles, such as Palestine, Chechnya, Iraq, Kashmir, Mindanao,

and southern Thailand, and has emerged in response to government repression,

corruption, and ineffectiveness. Informal networks of charitable foundations,

madrassas, hawalas1

, and other mechanisms will continue to proliferate and be

exploited by radical elements; alienation among unemployed youths will swell the ranks

of those vulnerable to terrorist recruitment.

We expect that by 2020 al-Qa’ida will be superceded by similarly inspired Islamic

extremist groups, and there is a substantial risk that broad Islamic movements akin to

al-Qa’ida will merge with local separatist movements. Information technology, allowing

for instant connectivity, communication, and learning, will enable the terrorist threat to

become increasingly decentralized, evolving into an eclectic array of groups, cells, and

individuals that do not need a stationary headquarters to plan and carry out operations.

Training materials, targeting guidance, weapons know-how, and fund-raising will

become virtual (i.e., online).

1 Hawalas constitute an informal banking system.
16

Terrorist attacks will continue to primarily employ conventional weapons, incorporating

new twists and constantly adapting to counterterrorist efforts. Terrorists probably will be

most original not in the technologies or weapons they use but rather in their operational

concepts—i.e., the scope, design, or support arrangements for attacks.

Strong terrorist interest in acquiring chemical, biological, radiological and nuclear

weapons increases the risk of a major terrorist attack involving WMD. Our greatest

concern is that terrorists might acquire biological agents or, less likely, a nuclear

device, either of which could cause mass casualties. Bioterrorism appears

particularly suited to the smaller, better-informed groups. We also expect that terrorists

will attempt cyber attacks to disrupt critical information networks and, even more likely,

to cause physical damage to information systems.

Possible Futures

In this era of great flux, we see several ways in which major global changes could take

shape in the next 15 years, from seriously challenging the nation-state system to

establishing a more robust and inclusive globalization. In the body of this paper we

develop these concepts in four fictional scenarios which were extrapolated from the key

trends we discuss in this report. These scenarios are not meant as actual forecasts,

but they describe possible worlds upon whose threshold we may be entering,

depending on how trends interweave and play out:

• Davos World provides an illustration of how robust economic growth, led by China

and India, over the next 15 years could reshape the globalization process—giving it

a more non-Western face and transforming the political playing field as well.

• Pax Americana takes a look at how US predominance may survive the radical

changes to the global political landscape and serve to fashion a new and inclusive

global order.

• A New Caliphate provides an example of how a global movement fueled by radical

religious identity politics could constitute a challenge to Western norms and values

as the foundation of the global system.

• Cycle of Fear provides an example of how concerns about proliferation might

increase to the point that large-scale intrusive security measures are taken to

prevent outbreaks of deadly attacks, possibly introducing an Orwellian world.

Of course, these scenarios illustrate just a few of the possible futures that may develop

over the next 15 years, but the wide range of possibilities we can imagine suggests that

this period will be characterized by increased flux, particularly in contrast to the relative

stasis of the Cold War era. The scenarios are not mutually exclusive: we may see two

or three of these scenarios unfold in some combination or a wide range of other

scenarios.
17

Policy Implications

The role of the United States will be an important shaper of the international order in

2020. Washington may be increasingly confronted with the challenge of managing—at

an acceptable cost to itself—relations with Europe, Asia, the Middle East, and others

absent a single overarching threat on which to build consensus. Although the

challenges ahead will be daunting, the United States will retain enormous

advantages, playing a pivotal role across the broad range of issues—economic,

technological, political, and military—that no other state will match by 2020.

Some trends we probably can bank on include dramatically altered alliances and

relationships with Europe and Asia, both of which formed the bedrock of US power in

the post-World War II period. The EU, rather than NATO, will increasingly become the

primary institution for Europe, and the role which Europeans shape for themselves on

the world stage is most likely to be projected through it. Dealing with the US-Asia

relationship may arguably be more challenging for Washington because of the greater

flux resulting from the rise of two world-class economic and political giants yet to be fully

integrated into the international order. Where US-Asia relations lead will result as much

or more from what the Asians work out among themselves as any action by

Washington. One could envisage a range of possibilities from the US enhancing its role

as balancer between contending forces to Washington being seen as increasingly

irrelevant.

The US economy will become more vulnerable to fluctuations in the fortunes of others

as global commercial networking deepens. US dependence on foreign oil supplies also

makes it more vulnerable as the competition for secure access grows and the risks of

supply side disruptions increase.

While no single country looks within striking distance of rivaling US military

power by 2020, more countries will be in a position to make the United States pay

a heavy price for any military action they oppose. The possession of chemical,

biological, and/or nuclear weapons by Iran and North Korea and the possible

acquisition of such weapons by others by 2020 also increase the potential cost of any

military action by the US against them or their allies.

The success of the US-led counterterrorism campaign will hinge on the capabilities and

resolve of individual countries to fight terrorism on their own soil. Counterterrorism

efforts in the years ahead—against a more diverse set of terrorists who are connected

more by ideology than by geography—will be a more elusive challenge than focusing on

a centralized organization such as al-Qa’ida. A counterterrorism strategy that

approaches the problem on multiple fronts offers the greatest chance of

containing—and ultimately reducing—the terrorist threat. The development of

more open political systems and representation, broader economic opportunities, and

empowerment of Muslim reformers would be viewed positively by the broad Muslim

communities who do not support the radical agenda of Islamic extremists.
18

Even if the numbers of extremists dwindle, however, the terrorist threat is likely to

remain. The rapid dispersion of biological and other lethal forms of technology

increases the potential for an individual not affiliated with any terrorist group to be able

to wreak widespread loss of life. Despite likely high-tech breakthroughs that will make it

easier to track and detect terrorists at work, the attacker will have an easier job than the

defender because the defender must prepare against a large array of possibilities.

The United States probably will continue to be called on to help manage such conflicts

as Palestine, North Korea, Taiwan, and Kashmir to ensure they do not get out of hand if

a peace settlement cannot be reached. However, the scenarios and trends we analyze

in the paper suggest the possibility of harnessing the power of the new players in

contributing to global security and relieving the US of some of the burden.

Over the next 15 years the increasing centrality of ethical issues, old and new,

have the potential to divide worldwide publics and challenge US leadership.

These issues include the environment and climate change, privacy, cloning and

biotechnology, human rights, international law regulating conflict, and the role of

multilateral institutions. The United States increasingly will have to battle world public

opinion, which has dramatically shifted since the end of the Cold War. Some of the

current anti-Americanism is likely to lessen as globalization takes on more of a nonWestern face. At the same time, the younger generation of leaders—unlike during the

post-World War II period—has no personal recollection of the United States as its

“liberator” and is more likely to diverge with Washington’s thinking on a range of issues.

In helping to map out the global future, the United States will have many opportunities to

extend its advantages, particularly in shaping a new international order that integrates

disparate regions and reconciles divergent interests.
19

Methodology

To launch the NIC 2020 Project, in November 2003 we brought together some 25

leading outside experts from a wide variety of disciplines and backgrounds to engage in

a broad-gauged discussion with Intelligence Community analysts. We invited three

leading “futurists”—Ted Gordon of the UN’s Millennium Project; Jim Dewar, Director of

the RAND Corporation’s Center for Longer Range Global Policy and the Future of the

Human Condition; and Ged Davis, former head of Shell International’s scenarios

project2

—to discuss their most recent work and the methodologies they employed to

think about the future. Princeton University historian Harold James gave the keynote

address, offering lessons from prior periods of “globalization.”

We surveyed and studied various methodologies (see box on page 22) and reviewed a

number of recent “futures” studies. Besides convening a meeting of counterparts in the

UK, Canada, Australia, and New Zealand to learn their thinking, we organized six

regional conferences in countries on four continents—one in the United Kingdom, South

Africa, Singapore, and Chile, two in Hungary—to solicit the views of foreign experts from

a variety of backgrounds—academics, business people, government officials, members

of nongovernmental organizations and other institutions—who could speak

authoritatively on the key drivers of change and conceptualize broad regional themes.

Our regional experts also contributed valuable insights on how the rest of the world

views the United States. In addition to the conferences held overseas, which included

hundreds of foreign participants, we held a conference in the Washington, DC area on

India.

We augmented these discussions with conferences and workshops that took a more indepth view of specific issues of interest, including new technologies, the changing

nature of warfare, identity politics, gender issues, climate change and many others (see

box on page 20 for a complete list of the conferences). Participants explored key trends

that were presented by experts and then developed alternative scenarios for how the

trends might play out over the next 15 years. And we consulted numerous organizations

and individuals on the substantive aspects of this study, as well as on methodologies

and approaches for thinking about the future.

• The UN Millennium Project—an independent body that advises the UN on strategies

for achieving the Millennium development goals—provided invaluable data on crosscutting issues. We also consulted the Eurasia Group, Oxford Analytica, CENTRA

Technologies, and the Stimson Center.

• Other individual scholars we consulted included Michael F. Oppenheimer, President,

Global Scenarios, who facilitated several of our sessions and informed our thinking

on methodologies; Georgetown and now Princeton Professor John Ikenberry, who

organized several seminars of academic experts over the course of more than a

2 Shell International Limited has for decades used scenarios to identify business risks and opportunities. Ged Davis

led this effort for many years.
20

year to examine various aspects of US preeminence and critique preliminary drafts

of the report; Enid Schoettle, who was one of the architects of Global Trends 2015;

Professor Barry B. Hughes, Graduate School of International Studies, University of

Denver, whose related statistical and scenario work is featured on our Web site;

Anne Solomon, Senior Adviser on Technology Policy and Director of the

Biotechnology and Public Policy Program at the Center for Strategic and

International Studies in Washington, DC, who organized several stimulating

conferences on S&T topics; Elke Matthews, an independent contractor who

conducted substantial open-source research; Philip Jenkins, Distinguished Professor

of History and Religious Studies, Pennsylvania State University, who provided

invaluable insights on global trends pertaining to religion; Nicholas Eberstadt, Henry

Wendt Chair in Political Economy, American Enterprise Institute, who provided us

with important perspectives on demographic issues; and Jeffrey Herbst, Chair,

Department of Politics, Princeton University, who was instrumental in our analysis of

issues pertaining to Africa.

NIC 2020 Project Conferences and Workshops

Presentation by Joint Doctrine and Concepts Center (MoD/UK)—CIA Headquarters (September

2003)

Conference on Anti-Americanism—Wye Plantation (October 2003)

Inaugural NIC 2020 Project Conference—Washington, DC (November 2003)

Professor Ikenberry’s series of International Relations Roundtables—Georgetown University

(November 2003-November 2004)

Joint US-Commonwealth Intelligence Officials’ Conference —Washington, DC (December 2003)

African Experts’ Roundtable—Washington, DC (January 2004)

Middle East NIC 2020 Workshop—Wilton Park, UK (March 2004)

Africa NIC 2020 Workshop—Johannesburg, South Africa (March 2004)

Global Evolution of Dual-Use Biotechnology—Washington, DC (March 2004)

Russia and Eurasia NIC 2020 Workshop—Budapest, Hungary (April 2004)

Europe NIC 2020 Workshop—Budapest, Hungary (April 2004)

Global Identity Roundtable Discussion—CIA Headquarters (May 2004)

Asia NIC 2020 Workshop—Singapore (May 2004)

Conference on The Changing Nature of Warfare—Center for Naval Analysis (May 2004)

Latin America NIC 2020 Workshop—Santiago, Chile (June 2004)

Technological Frontiers, Global Power, Wealth, and Conflict—Center for Strategic and

International Studies (CSIS) (June 2004)

Climate Change—University of Maryland (June 2004)

NSA Tech 2020—Baltimore, Maryland (June 2004)

Conference on Muslims in Europe—Oxford, England (July 2004)

Women in 2020—Washington, DC (August 2004)

Business Leader Roundtable Discussion—CIA Headquarters (September 2004)

India and Geopolitics in 2020–Rosslyn, Virginia (September 2004)

Stimson Center-sponsored roundtables on Scenarios—Washington, DC (Spring-Summer, 2004)

Information and Communications, Technological and Social Cohesion and the Nation-State—

Washington, DC (September 2004)

Wrap-Up NIC 2020 Project Workshop—Virginia (October 2004)

Consultation on Preliminary NIC 2020 Draft with UK experts and the International Institute of

Strategic Studies—London, England (October 2004)
21

• The following organizations arranged the regional conferences for the project:

Wilton Park, Central European University, Bard College, the South African Institute

for International Affairs, Adolfo Ibañez University, Nueva Mayoria, and the Asia

Society. Timothy Sharp and Professor Ewan Anderson of Sharp Global Solutions

Ltd arranged a conference in London of UK experts to critique a preliminary draft of

the report.

• We also want to thank our colleagues in the US Intelligence Community, who

provided us with useful data and shared their ideas about global trends.

Scenario Development Process

While straight-line projections are useful in establishing a baseline and positing a

mainline scenario, they typically present a one-dimensional view of how the future might

unfold and tend to focus attention exclusively on the “prediction.” Scenarios offer a

more dynamic view of possible futures and focus attention on the underlying interactions

that may have particular policy significance. They are especially useful in thinking about

the future during times of great uncertainty, which we believe is the case for the next 15

years. Scenarios help decisionmakers to break through conventional thinking and basic

assumptions so that a broader range of possibilities can be considered—including new

risks and opportunities.

The six international workshops generated an enormous amount of data and analysis on

the key drivers that are likely to lead to regional change in the 2020 timeframe. The NIC

2020 Project staff conducted additional research, drafted papers, and initiated follow-up

roundtable discussions and conferences. We analyzed the findings from the regional

workshops, highlighted key regional trends that had global implications, and looked at

the regional product in its totality to identify salient cross-regional trends. These key

findings were set aside as the raw material for development of the global scenarios.

To jumpstart the global scenario development process, the NIC 2020 Project staff

created a Scenario Steering Group (SSG)—a small aggregation of respected members

of the policy community, think tanks, and analysts from within the Intelligence

Community—to examine summaries of the data collected and consider scenario

concepts that take into account the interaction between key drivers of global change.

SSG examined the product of the international workshops and explored fledgling

scenarios for plausibility and policy relevance.

We studied extensively key futures work developed in the public and private sectors that

employed scenario techniques, identified the “best practices,” and then developed our

own unique approach, combining trend analysis and scenarios. Papers that influenced

our work include those produced by Goldman Sachs, the UK Ministry of Defense, and

Shell International, Ltd. (see box on page 22).
22

Scenario and Futures Work That Influenced Our Thinking

Our consultations with Ged Davis, formerly the leader of Shell International’s scenariobuilding effort, affirmed our intent to develop scenarios for policymakers. Shell builds

global scenarios every three years to help its leaders make better decisions.

Following initial research, Shell’s team spends about a year conducting

interviews and holding workshops to develop and finalize the scenarios, seeking

throughout the process to ensure a balance between unconventional thinking and

plausibility. We used a similar approach. We also benefited from consultations

with other organizations that do futures work:

The Joint Doctrine and Concepts Centre, an integral part of the UK Ministry of

Defense, undertook an ambitious attempt to develop a coherent view of how the world

might develop over the next 30 years in ways that could alter the UK’s security. The

project—Strategic Trends—was designed to assist the MOD in gaining a strategic

understanding of future threats, risks, challenges, and opportunities.

Meta-Analysis of Published Material on Drivers and Trends, produced by the UK

Defense Evaluation and Research Agency, reviewed over 50 futures studies.

The RAND Corporation—as part of a parallel, NIC-sponsored effort to update its 2001

monograph The Global Revolution: Bio/Nano/Materials Trends and Their Synergies with

IT by 2015—provided substantive guidance by delineating technology trends and their

interaction; identifying applications that will transform the future; commenting

extensively on drafts; and providing thought-provoking, technology-driven scenario

concepts.

Peter Schwartz, Chairman, Global Business Network and author of Inevitable

Surprises, provided us with invaluable insights on the nature of surprise, including the

use of drivers, the interpretation of insights across disciplines, and the application of

scenario work to the private sector.

Toffler Associates contributed ideas at several points, including in association with the

NSA Tech 2020 project (see below). In addition, Drs. Alvin and Heidi Toffler

participated in our capstone conference, sharing their insights on understanding the

future based on their vast experience in the field.

The National Security Agency’s project—Tech 2020—also helped identify key

technology convergences expected to impact society between now and 2020. We have

incorporated valuable insights from this project and are grateful to NSA for stimulating a

rewarding Intelligence Community dialogue on future trends.
23

After scenario concepts were explored, critiqued, and debated within the SSG and with

other groups that the NIC engaged, eight global scenarios that held particular promise

were developed. The NIC then held a wrap-up workshop with a broader group of

experts to examine the eight scenarios, discuss the merits and weaknesses of each,

and ultimately narrow the number of scenarios included in the final publication to four.

The scenarios depicted in this publication were selected for their relevance to

policymakers and because they cause us to question key assumptions about the

future—but they do not attempt to predict it. Nor are they mutually exclusive.

Interactive Tools

Significantly, the NIC 2020 Project also employs information technology and analytic

tools unavailable in earlier NIC efforts. Its global sweep and scope required that we

engage in a continuing, worldwide dialogue about the future. With the help of CENTRA

Technologies, we created an interactive, password-protected Web site to serve as a

repository for discussion papers and workshop summaries. The site also provided a

link to massive quantities of basic data for reference and analysis. It contained

interactive tools to keep our foreign and domestic experts engaged and created “handson” computer simulations that allowed novice and expert alike to develop their own

scenarios.3 Much of this supporting material involving the Empirical Web-boxes

Scenario capability has now been transferred to the open, unclassified NIC Web site

with publication of this report.

3 To access these new innovations log on to the NIC website: www.cia.gov/nic.
24
25

Introduction

The international order is in the midst of

profound change: at no time since the

formation of the Western alliance system

in 1949 have the shape and nature of

international alignments been in such a

state of flux as they have during the past

decade. As a result, the world of 2020

will differ markedly from the world of

2004, and in the intervening years the

United States will face major

international challenges that differ

significantly from those we face today.

The very magnitude and speed of

change resulting from a globalizing

world—regardless of its precise

character—will be a defining feature of

the world out to 2020. Other significant

characteristics include:

• The contradictions of globalization.

• Rising powers: the changing

geopolitical landscape.

• New challenges to governance.

• A more pervasive sense of insecurity.

As with previous upheavals, the seeds of

major change have been laid in the

trends apparent today. Underlying the

broad characteristics listed above are a

number of specific trends that overlap

and play off each other:

• The expanding global economy.

• The accelerating pace of scientific

change and the dispersion of dualuse technologies.

• Lingering social inequalities.

• Emerging powers.

• The global aging phenomenon.

• Halting democratization.

• A spreading radical Islamic ideology.

• The potential for catastrophic

terrorism.

• The proliferation of weapons of mass

destruction.

• Increased pressures on international

institutions.

As we survey the next 15 years, the role

of the United States will be an important

variable in how the world is shaped,

influencing the path that states and

nonstate actors choose to follow. In

addition to the pivotal role of the United

States, international bodies including

international organizations, multinational

corporations, nongovernmental

organizations (NGOs) and others can

mitigate distinctly negative trends, such

as greater insecurity, and advance

positive trends.
26
27

The Contradictions of Globalization

Whereas in Global Trends 2015 we

viewed globalization—growing

interconnectedness reflected in the

expanded flows of information,

technology, capital, goods, services, and

people throughout the world—as among

an array of key drivers, we now view it

more as a “mega-trend”—a force so

ubiquitous that it will substantially shape

all of the other major trends in the world of

2020.

“[By 2020] globalization is likely

to take on much more of a ‘nonWestern’ face...”

The reach of globalization was

substantially broadened during the last 20

years by Chinese and Indian economic

liberalization, the collapse of the Soviet

Union, and the worldwide information

technology revolution. Through the next

15 years, it will sustain world economic

growth, raise world living standards, and

substantially deepen global interdependence. At the same time, it will profoundly

shake up the status quo almost

everywhere—generating enormous

economic, cultural, and consequently

political convulsions.

Certain aspects of globalization, such as

the growing global inter-connectedness

stemming from the information technology

revolution, are likely to be irreversible.

Real-time communication, which has

transformed politics almost everywhere, is

a phenomenon that even repressive

governments would find difficult to

expunge.

• It will be difficult, too, to turn off the

phenomenon of entrenched economic

interdependence, although the pace of

global economic expansion may ebb

and flow. Interdependence has

widened the effective reach of

multinational business, enabling

smaller firms as well as large

multinationals to market across

borders and bringing heretofore nontraded services into the international

arena.

Yet the process of globalization, powerful

as it is, could be substantially slowed or

even reversed, just as the era of

globalization in the late 19th and early 20th

centuries was reversed by catastrophic

war and global depression. Some

features that we associate with the

globalization of the 1990s—such as

economic and political liberalization—are

prone to “fits and starts” and probably will

depend on progress in multilateral

negotiations, improvements in national

governance, and the reduction of

conflicts. The freer flow of people across

national borders will continue to face

social and political obstacles even when

there is a pressing need for migrant

workers.

“India and China probably will be

among the economic

heavyweights or ‘haves.’”
28

What Would An Asian Face on Globalization Look Like?

Rising Asia will continue to reshape globalization, giving it less of a “Made in the USA” character

and more of an Asian look and feel. At the same time, Asia will alter the rules of the globalizing

process. By having the fastest-growing consumer markets, more firms becoming world-class

multinationals, and greater S&T stature, Asia looks set to displace Western countries as the

focus for international economic dynamism—provided Asia’s rapid economic growth continues.

Asian finance ministers have considered establishing an Asian monetary fund that would

operate along different lines from IMF, attaching fewer strings on currency swaps and giving

Asian decision-makers more leeway from the “Washington macro-economic consensus.”

• In terms of capital flows, rising Asia may still accumulate large currency reserves—currently

$850 billion in Japan, $500 billion in China, $190 billion in Korea, and $120 billion in India,

or collectively three-quarters of global reserves—but the percentage held in dollars will fall.

A basket of reserve currencies including the yen, renminbi, and possibly rupee probably will

become standard practice.

• Interest-rate decisions taken by Asian central bankers will impact other global financial

markets, including New York and London, and the returns from Asian stock markets are

likely to become an increasing global benchmark for portfolio managers.

As governments devote more resources to basic research and development, rising Asia will

continue to attract applied technology from around the world, including cutting-edge technology,

which should boost their high performance sectors. We already anticipate (as stated in the text)

that the Asian giants may use the power of their markets to set industry standards, rather than

adopting those promoted by Western nations or international standards bodies. The

international intellectual property rights regime will be profoundly molded by IPR regulatory and

law enforcement practices in East and South Asia.

Increased labor force participation in the global economy, especially by China, India, and

Indonesia, will have enormous effects, possibly spurring internal and regional migrations. Either

way it will have a large impact, determining the relative size of the world’s greatest new “megacities” and, perhaps, act as a key variable for political stability/instability for decades to come.

To the degree that these vast internal migrations spill over national borders—currently, only a

miniscule fraction of China’s 100 million internal migrants end up abroad—they could have

major repercussions for other regions, including Europe and North America.

An expanded Asian-centric cultural identity may be the most profound effect of a rising Asia.

Asians have already begun to reduce the percentage of students who travel to Europe and

North America with Japan and—most striking—China becoming educational magnets. A new,

more Asian cultural identity is likely to be rapidly packaged and distributed as incomes rise and

communications networks spread. Korean pop singers are already the rage in Japan, Japanese

anime have many fans in China, and Chinese kung-fu movies and Bollywood song-and-dance

epics are viewed throughout Asia. Even Hollywood has begun to reflect these Asian

influences—an effect that is likely to accelerate through 2020.
29

Moreover, the character of globalization

probably will change just as capitalism

changed over the course of the 19th and

20th centuries. While today’s most

advanced nations—especially the United

States—will remain important forces

driving capital, technology and goods,

globalization is likely to take on much

more of a “non-Western face” over the

next 15 years.

• Most of the increase in world

population and consumer demand

through 2020 will take place in today’s

developing nations—especially China,

India, and Indonesia—and

multinational companies from today’s

advanced nations will adapt their

“profiles” and business practices to the

demands of these cultures.

• Able to disperse technology widely

and promote economic progress in the

developing world, corporations already

are seeking to be “good citizens” by

allowing the retention of non-Western

practices in the workplaces in which

they operate. Corporations are in the

position to make globalization more

palatable to people concerned about

preserving unique cultures.

• New or expanding corporations from

countries lifted up by globalization will

make their presence felt globally

through trade and investments abroad.

• Countries that have benefited and are

now in position to weigh in will seek

more power in international bodies and

greater influence on the “rules of the

game.”

• In our interactions, many foreign

experts have noted that while popular

opinion in their countries favors the

material benefits of globalization,

citizens are opposed to its perceived

“Americanization,” which they see as

threatening to their cultural and

religious values. The conflation of

globalization with US values has in

turn fueled anti-Americanism in some

parts of the world.

“...the world economy is

projected to be about 80 percent

larger in 2020 than it was in

2000, and average per capita

income to be roughly 50 percent

higher.”

Currently, about two-thirds of the world’s

population live in countries that are

connected to the global economy. Even

by 2020, however, the benefits of

globalization won’t be global. Over the

next 15 years, gaps will widen between

those countries benefiting from

globalization—economically,

technologically, and socially—and those

underdeveloped nations or pockets within

nations that are left behind. Indeed, we

see the next 15 years as a period in which

the perceptions of the contradictions and

uncertainties of a globalized world come

even more to the fore than is the case

today.

An Expanding and Integrating Global

Economy

The world economy is projected to be

about 80 percent larger in 2020 than it

was in 2000 and average per capita

income to be roughly 50 percent higher.

Large parts of the world will enjoy

unprecedented prosperity, and a

numerically large middle class will be

created for the first time in some formerly

poor countries. The social structures in
30

What Could Derail Globalization?

The process of globalization, powerful as it is, could be substantially slowed or even

stopped. Short of a major global conflict, which we regard as improbable, another

large-scale development that we believe could stop globalization would be a pandemic.

However, other catastrophic developments, such as terrorist attacks, could slow its

speed.

Some experts believe it is only a matter of time before a new pandemic appears, such

as the 1918–1919 influenza virus that killed an estimated 20 million worldwide. Such a

pandemic in megacities of the developing world with poor health-care systems—in SubSaharan Africa, China, India, Bangladesh or Pakistan—would be devastating and could

spread rapidly throughout the world. Globalization would be endangered if the death toll

rose into the millions in several major countries and the spread of the disease put a halt

to global travel and trade during an extended period, prompting governments to expend

enormous resources on overwhelmed health sectors. On the positive side of the ledger,

the response to SARS showed that international surveillance and control mechanisms

are becoming more adept at containing diseases, and new developments in

biotechnologies hold the promise of continued improvement.

A slow-down could result from a pervasive sense of economic and physical

insecurity that led governments to put controls on the flow of capital, goods, people,

and technology that stalled economic growth. Such a situation could come about in

response to terrorist attacks killing tens or even hundreds of thousands in several US

cities or in Europe or to widespread cyber attacks on information technology. Border

controls and restrictions on technology exchanges would increase economic transaction

costs and hinder innovation and economic growth. Other developments that could

stimulate similar restrictive policies include a popular backlash against globalization

prompted, perhaps, by white collar rejection of outsourcing in the wealthy countries

and/or resistance in poor countries whose peoples saw themselves as victims of

globalization.

those developing countries will be

transformed as growth creates a greater

middle class. Over a long time frame,

there is the potential, so long as the

expansion continues, for more

traditionally poor countries to be pulled

closer into the globalization circle.

Most forecasts to 2020 and beyond

continue to show higher annual growth for

developing countries than for high-income

ones. Countries such as China and India

will be in a position to achieve higher

economic growth than Europe and Japan,

whose aging work forces may inhibit their

growth. Given its enormous population—

and assuming a reasonable degree of

real currency appreciation—the dollar

value of China’s gross national product

(GNP) may be the second largest in the

world by 2020. For similar reasons, the

value of India’s output could match that of

a large European country. The

economies of other developing countries,
31

such as Brazil and Indonesia, could

surpass all but the largest European

economies by 2020.4

• Even with all their dynamic growth,

Asia’s “giants” and others are not likely

to compare qualitatively to the

economies of the US or even some of

the other rich countries. They will

have some dynamic, world-class

sectors, but more of their populations

will work on farms, their capital stocks

will be less sophisticated, and their

financial systems are likely to be less

efficient than those of other wealthy

countries.

4 Dreaming with the BRICS, Goldman Sachs study,

October 2003.

Continued Economic Turbulence.

Sustained high-growth rates have

historical precedents. China already has

had about two decades of 7 percent and

higher growth rates, and Japan, South

Korea, and Taiwan have managed in the

past to achieve annual rates averaging

around 10 percent for a long period.

Fast-developing countries have

historically suffered sudden setbacks,

however, and economic turbulence is

increasingly likely to spill over and upset

broader international relations. Many

emerging markets—such as Mexico in

the mid-1990s and Asian countries in the

late 1990s—suffered negative effects

from the abrupt reversals of capital

movements, and China and India may
32

encounter similar problems. The scale of

the potential reversals would be

unprecedented, and it is unclear whether

current international financial

mechanisms would be in a position to

forestall wider economic disruption.

“Competitive pressures will force

companies based in the advanced

economies to ‘outsource’ many

blue- and white-collar jobs.”

With the gradual integration of China,

India, and other developing countries into

the global economy, hundreds of millions

of working-age adults will join what is

becoming, through trade and investment

flows, a more interrelated world labor

market. World patterns of production,

trade, employment, and wages will be

transformed.

• This enormous work force—a growing

portion of which will be well

educated—will be an attractive,

competitive source of low-cost labor at

the same time that technological

innovation is expanding the range of

globally mobile occupations.

• Competition from these workers will

increase job “churning,” necessitate

professional retooling, and restrain

wage growth in some occupations.

Where these labor market pressures lead

will depend on how political leaders and
33

policymakers respond. Against the

backdrop of a global economic recession,

such resources could unleash

widespread protectionist sentiments. As

long as sufficiently robust economic

growth and labor market flexibility are

sustained, however, intense international

competition is unlikely to cause net job

“loss” in the advanced economies.

• The large number of new service

sector jobs that will be created in India

and elsewhere in the developing

world, for example, will likely exceed

the supply of workers with those

specific skills in the advanced

economies.

• Job turnover in advanced economies

will continue to be driven more by

technological change and the

vicissitudes of domestic rather than

international competition.

Mobility and Laggards. Although the

living standards of many people in

developing and underdeveloped countries

will rise over the next 15 years, per capita

incomes in most countries will not

compare to those of Western nations by

2020. There will continue to be large

numbers of poor even in the rapidly

emerging economies, and the proportion

of those in the middle stratum is likely to

be significantly less than is the case for

today’s developed nations. Experts

estimate it could take China another 30

years beyond 2020 for per capita

incomes to reach current rates in

developed economies.

• Even if, as one study estimates,

China’s middle class could make up

as much as 40 percent of its

population by 2020—double what it is

now—it would be still well below the

60 percent level for the US. And per

capita income for China’s middle class

would be substantially less than

equivalents in the West.

• In India, there are now estimated to be

some 300 million middle-income

earners making $2,000-$4,000 a year.

Both the number of middle earners

and their income levels are likely to

rise rapidly, but their incomes will

continue to be substantially below

averages in the US and other rich

countries even by 2020.

• However, a $3,000 annual income is

considered sufficient to spur car

purchases in Asia; thus rapidly rising

income levels for a growing middle

class will combine to mean a huge

consumption explosion, which is

already evident.

Widening income and regional disparities

will not be incompatible with a growing

middle class and increasing overall

wealth. In India, although much of the

west and south may have a large middle

class by 2020, a number of regions such

as Bihar, Uttar Pradesh, and Orissa will

remain underdeveloped.

Moreover, countries not connected to the

world economy will continue to suffer.

Even the most optimistic forecasts admit

that economic growth fueled by

globalization will leave many countries in

poverty over the next 15 years.

• Scenarios developed by the World

Bank indicate, for example, that SubSaharan Africa will be far behind even

under the most optimistic scenario.

The region currently has the largest
34

share of people living on less than $1

per day.

If the growing problem of abject poverty

and bad governance in troubled states in

Sub-Saharan Africa, Eurasia, the Middle

East, and Latin America persists, these

areas will become more fertile grounds

for terrorism, organized crime, and

pandemic disease. Forced migration also

is likely to be an important dimension of

any downward spiral. The international

community is likely to face choices about

whether, how, and at what cost to

intervene.

“...the greatest benefits of

globalization will accrue to

countries and groups that can

access and adopt new

technologies.”

The Technology Revolution

The trend toward rapid, global diffusion of

technology will continue, although the

stepped-up technology revolution will not

benefit everyone equally.

• Among the drivers of the growing

availability of technology will be the

growing two-way flow of high-tech

brain power between developing

countries and Western countries, the

increasing size of the technologically

literate workforce in some developing

countries, and efforts by multinational

corporations to diversify their hightech operations.

New technology applications will foster

dramatic improvements in human

knowledge and individual well-being.

Such benefits include medical

breakthroughs that begin to cure or

mitigate some common diseases and

stretch lifespans, applications that

improve food and potable water

production, and expansion of wireless

communications and language translation

technologies that will facilitate

transnational business, commercial, and

even social and political relationships.

Moreover, future technology trends will be

marked not only by accelerating

advancements in individual technologies

but also by a force-multiplying

convergence of the technologies—

information, biological, materials, and

nanotechnologies—that have the

potential to revolutionize all dimensions of

life. Materials enabled with

nanotechnology’s sensors and facilitated

by information technology will produce

myriad devices that will enhance health

and alter business practices and models.

Such materials will provide new

knowledge about environment, improve

security, and reduce privacy. Such

interactions of these technology trends—

coupled with agile manufacturing

methods and equipment as well as

energy, water, and transportation

technologies—will help China’s and

India’s prospects for joining the “First

World.” Both countries are investing in

basic research in these fields and are well

placed to be leaders in a number of key

fields. Europe risks slipping behind Asia

in creating some of these technologies.

The United States is still in a position to

retain its overall lead, although it must

increasingly compete with Asia and may

lose significant ground in some sectors.

To Adaptive Nations Go Technology ‘s

Spoils. The gulf between “haves” and

“have-nots” may widen as the greatest

benefits of globalization accrue to

countries and groups that can access and
35

adopt new technologies. Indeed, a

nation’s level of technological

achievement generally will be defined in

terms of its investment in integrating and

applying the new, globally available

technologies—whether the technologies

are acquired through a country’s own

basic research or from technology

leaders. Nations that remain behind in

adopting technologies are likely to be

those that have failed to pursue policies

that support application of new

technologies—such as good governance,

universal education, and market

reforms—and not solely because they are

poor.

Those that employ such policies can

leapfrog stages of development, skipping

over phases that other high-tech leaders

such as the United States and Europe

had to traverse in order to advance.

China and India are well positioned to

achieve such breakthroughs. Yet, even

the poorest countries will be able to

leverage prolific, cheap technologies to

fuel—although at a slower rate—their

own development.

• As nations like China and India surge

forward in funding critical science and

engineering education, research, and

other infrastructure investments, they

will make considerable strides in

manufacturing and marketing a full

range of technology applications—

from software and pharmaceuticals to

wireless sensors and smart-materials

products.

Rapid technological advances outside the

United States could enable other

countries to set the rules for design,

standards, and implementation, and for

molding privacy, information security, and

intellectual property rights (IPR).

• Indeed, international IPR enforcement

is on course for dramatic change.

Countries like China and India will,

because of the purchasing power of

their huge markets, be able to shape

the implementation of some

technologies and step on the

intellectual property rights of others.

The attractiveness of these large

markets will tempt multinational firms

to overlook IPR indiscretions that only

minimally affect their bottom lines.

Additionally, as many of the expected

advancements in technology are

anticipated to be in medicine, there

will be increasing pressure from a

humanitarian and moral perspective to

“release” the property rights “for the

good of mankind.”

Nations also will face serious challenges

in oversight, control, and prohibition of

sensitive technologies. With the same

technology, such as sensors, computing,

communication, and materials,

increasingly being developed for a range

of applications in both everyday,

commercial settings and in critical military

applications the monitoring and control of

the export of technological components

will become more difficult. Moreover,

joint ventures, globalized markets and the

growing proportion of private sector

capital in basic R&D will undermine

nation-state efforts to keep tabs on

sensitive technologies.

• Questions concerning a country’s

ethical practices in the technology

realm—such as with genetically

modified foods, data privacy,

biological material research,

concealable sensors, and biometric

devices—may become an increasingly

important factor in international trade

policy and foreign relations.
36

Biotechnology: Panacea and Weapon

The biotechnological revolution is at a relatively early stage, and major advances in the

biological sciences coupled with information technology will continue to punctuate the

21st century. Research will continue to foster important discoveries in innovative

medical and public health technologies, environmental remediation, agriculture,

biodefense, and related fields.

On the positive side, biotechnology could be a “leveling” agent between developed and

developing nations, spreading dramatic economic and healthcare enhancements to the

neediest areas of the world.

• Possible breakthroughs in biomedicine such as an antiviral barrier will reduce the

spread of HIV/AIDS, helping to resolve the ongoing humanitarian crisis in SubSaharan Africa and diminishing the potentially serious drag on economic growth in

developing countries like India and China. Biotechnology research and innovations

derived from continued US investments in Homeland Security—such as new

therapies that might block a pathogen’s ability to enter the body—may eventually

have revolutionary healthcare applications that extend beyond protecting the US

from a terrorist attack.

• More developing countries probably will invest in indigenous biotechnology

developments, while competitive market pressures increasingly will induce firms and

research institutions to seek technically capable partners in developing countries.

However, even as the dispersion of biotechnology promises a means of improving the

quality of life, it also poses a major security concern. As biotechnology information

becomes more widely available, the number of people who can potentially misuse such

information and wreak widespread loss of life will increase. An attacker would appear to

have an easier job—because of the large array of possibilities available—than the

defender, who must prepare against them all. Moreover, as biotechnology advances

become more ubiquitous, stopping the progress of offensive BW programs will become

increasingly difficult. Over the next 10 to 20 years there is a risk that advances in

biotechnology will augment not only defensive measures but also offensive biological

warfare (BW) agent development and allow the creation of advanced biological agents

designed to target specific systems—human, animal, or crop.

Lastly, some biotechnology techniques that may facilitate major improvements in health

also will spur serious ethical and privacy concerns over such matters as comprehensive

genetic profiling; stem cell research; and the possibility of discovering DNA signatures

that indicate predisposition for disease, certain cognitive abilities, or anti-social

behavior.
37

At the same time, technology will be a

source of tension in 2020: from

competition over creating and attracting

the most critical component of

technological advancement—people—to

resistance among some cultural or

political groups to the perceived privacyrobbing or homogenizing effects of

pervasive technology.

Lingering Social Inequalities

Even with the potential for technological

breakthroughs and the dispersion of new

technologies, which could help reduce

inequalities, significant social welfare

disparities within the developing and

between developing and OECD countries

will remain until 2020.

Over the next 15 years, illiteracy rates of

people 15 years and older will fall,

according to UNESCO, but they will still

be 17 times higher in poor and

developing countries than those in

OECD5 countries. Moreover, illiteracy

rates among women will be almost twice

as high as those among men. Between

1950 and 1980 life expectancy between

the more- and less-developed nations

began to converge markedly; this

probably will continue to be the case for

many developing countries, including the

most populous. However, by US Census

Bureau projections, over 40 countries—

including many African countries, Central

Asian states, and Russia—are projected

5 The OECD, Organization for Economic Cooperation

and Development, an outgrowth of the Marshall Planera Organization for European Economic Cooperation,

boasts 30 members from among developed and

emerging-market nations and active relationships with

70 others around the world.

to have a lower life expectancy in 2010

than they did in 1990.

Even if effective HIV/AIDS prevention

measures are adopted in various

countries, the social and economic impact

of the millions already infected with the

disease will play out over the next 15

years.

• The rapid rise in adult deaths caused

by AIDS has left an unprecedented

number of orphans in Africa. Today in

some African countries one in ten

children is an orphan, and the

situation is certain to worsen.

The debilitation and death of millions of

people resulting from the AIDS pandemic

will have a growing impact on the

economies of the hardest-hit countries,

particularly those in Sub-Saharan Africa,

where more than 20 million are believed

to have died from HIV/AIDS since the

early 1980s. Studies show that

household incomes drop by 50 to 80

percent when key earners become

infected. In “second wave” HIV/AIDS

countries—Nigeria, Ethiopia, Russia,

India, China, Brazil, Ukraine, and the

Central Asian states—the disease will

continue to spread beyond traditional

high-risk groups into the general

population. As HIV/AIDS spreads, it has

the potential to derail the economic

prospects of many up-and-coming

economic powers.
38

The Status of Women in 2020

By 2020, women will have gained more rights and freedoms—in terms of education,

political participation, and work force equality—in most parts of the world, but UN and

World Health Organization data suggest that the gender gap will not have been closed

even in the developed countries and still will be wide in developing regions. Although

women’s share in the global work force will continue to rise, wage gaps and regional

disparities will persist.

• Although the difference between women’s and men’s earnings narrowed during the

past 10 years, women continue to receive less pay than men. For example, a UN

study in 2002 showed that in 27 of 39 countries surveyed—both in OECD and

developing countries—women’s wages were 20 to 50 percent less than men’s for

work in manufacturing.

Certain factors will tend to work against gender equality while others will have a positive

impact.

Factors Impeding Equality

In regions where high youth bulges intersect with historical patterns of patriarchal bias,

the added pressure on infrastructure will mean intensified competition for limited public

resources and an increased probability that females will not receive equal treatment.

For instance, if schools cannot educate all, boys are likely to be given first priority. Yet

views are changing among the younger generation. In the Middle East, for example,

many younger Muslims recognize the importance of educated wives as potential

contributors to family income.

In countries such as China and India, where there is a pervasive “son preference”

reinforced by government population control policies, women face increased risk not

only of female infanticide but also of kidnapping and smuggling from surrounding

regions for the disproportionately greater number of unattached males. Thus far, the

preference for male children in China has led to an estimated shortfall of 30 million

women.

Such statistics suggest that the global female trafficking industry, which already earns

an estimated $4 billion every year, is likely to expand, making it the second most

profitable criminal activity behind global drug trafficking.

The feminization of HIV/AIDS is another worrisome trend. Findings from the July 2004

Global AIDS conference held in Bangkok reveal that the percentage of HIV-infected

women is rising on every continent and in every major region in the world except

Western Europe and Australia. Young women comprise 75 percent of those between

the ages of 15 to 24 who are infected with HIV globally.

(Continued on next page...)
39

(continued...) The Status of Women in 2020

Factors Contributing to Equality

A broader reform agenda that includes good governance and low unemployment

levels is essential to raising the status of women in many countries. International

development experts emphasize that while good governance need not fit a Western

democratic mold, it must deliver stability through inclusiveness and accountability.

Reducing unemployment levels is crucial because countries already unable to provide

employment for male job-seekers are not likely to improve employment opportunities for

women.

The spread of information and communication technologies (ICT) offers great

promise. According to World Bank analysis, increases in the level of ICT infrastructure

tend to improve gender equality in education and employment. ICT also will enable

women to form social and political networks. For regions suffering political oppression,

particularly in the Middle East, these networks could become a 21st century counterpart

to the 1980s’ Solidarity Movement against the Communist regime in Poland.

Women in developing regions often turn to nongovernmental organizations (NGOs)

to provide basic services. NGOs could become even more important to the status of

women by 2020 as women in developing countries face increased threats and acquire

IT networking capabilities.

The current trend toward decentralization and devolution of power in most states will

afford women increased opportunities for political participation. Despite only

modest gains in the number of female officeholders at the national level—women

currently are heads of state in only eight countries—female participation in local and

provincial politics is steadily rising and will especially benefit rural women removed from

the political center of a country.

Other Benefits

The stakes for achieving gender parity are high and not just for women. A growing body

of empirical literature suggests that gender equality in education promotes economic

growth and reduces child mortality and malnutrition. At the Millennium Summit, UN

leaders pledged to achieve gender equity in primary and secondary education by the

year 2005 in every country of the world.

• By 2005, the 45 countries that are not on course to meet the UN targets are likely to

suffer 1 to 3 percent lower GDP per capita growth as a result.
40

Fictional Scenario: Davos World 

This scenario provides an illustration

of how robust economic growth over

the next 15 years could reshape the

globalization process—giving it a

more non-Western face. It is depicted

in the form of a hypothetical letter

from the head of the World Economic

Forum to a former US Federal

Reserve chairman on the eve of the

annual Davos meeting in 2020.

Under this scenario, the Asian giants

as well as other developing states

continue to outpace most “Western”

economies, and their huge, consumerdriven domestic markets become a

major focus for global business and

technology. Many boats are lifted, but

some founder. Africa does better than

one might think, while some mediumsized emerging countries are

squeezed. Western powers, including

the United States, have to contend

with job insecurity despite the many

benefits to be derived from an

expanding global economy. Although

benefiting from energy price

increases, the Middle East lags behind

and threatens the future of

globalization. In addition, growing

tensions over Taiwan may be on the

verge of triggering an economic

meltdown. At the end of the scenario,

we identify some lessons to be drawn

from our fictional account, including

the need for more management by

leaders lest globalization slip off the

rails.
41
42
43
44
45
46
47

Rising Powers: The Changing

Geopolitical Landscape

The likely emergence of China and India

as new major global players—similar to

the rise of Germany in the 19th century

and the United States in the early 20th

century—will transform the geopolitical

landscape, with impacts potentially as

dramatic as those of the previous two

centuries. In the same way that

commentators refer to the 1900s as the

“American Century,” the early 21st century

may be seen as the time when some in

the developing world, led by China and

India, come into their own.

• The population of the region that

served as the locus for most 20thcentury history—Europe and Russia—

will decline dramatically in relative

terms; almost all population growth

will occur in developing nations that

until recently have occupied places on

the fringes of the global economy (see

graphic on page 48).6

• The “arriviste” powers—China, India,

and perhaps others such as Brazil and

Indonesia—could usher in a new set

of international alignments, potentially

marking a definitive break with some

of the post-World War II institutions

and practices.

• Only an abrupt reversal of the process

of globalization or a major upheaval in

these countries would prevent their

rise. Yet how China and India

6 CIA, Long-Term Global Demographic Trends:

Reshaping the Geopolitical Landscape, July 2001.

exercise their growing power and

whether they relate cooperatively or

competitively to other powers in the

international system are key

uncertainties.

A combination of sustained high

economic growth, expanding military

capabilities, active promotion of high

technologies, and large populations will

be at the root of the expected rapid rise in

economic and political power for both

countries.

• Because of the sheer size of China’s

and India’s populations—projected by

the US Census Bureau to be 1.4

billion and almost 1.3 billion

respectively by 2020—their standard

of living need not approach Western

levels for these countries to become

important economic powers.

• China, for example, is now the third

largest producer of manufactured

goods, its share having risen from four

to 12 percent in the past decade. It

should easily surpass Japan in a few

years, not only in share of

manufacturing but also of the world’s

exports. Competition from “the China

price” already powerfully restrains

manufactures prices worldwide.

• India currently lags behind China (see

box on page 53) on most economic

measures, but most economists

believe it also will sustain high levels

of economic growth.
48

At the same time, other changes are

likely to shape the new landscape. These

include the possible economic rise of

other states—such as Brazil, South

Africa, Indonesia, and even Russia—

which may reinforce the growing role of

China and India even though by

themselves these other countries would

have more limited geopolitical impact.

Finally, we do not discount the possibility

of a stronger, more united Europe and a

more internationally activist Japan,

although Europe, Japan, and Russia will

be hard pressed to deal with aging

populations.

The growing demand for energy will drive

many of these likely changes on the

geopolitical landscape. China’s and

India’s perceived need to secure access

to energy supplies will propel these

countries to become more global rather

than just regional powers, while Europe

and Russia’s co-dependency is likely to

be strengthened.

Rising Asia

China’s desire to gain “great power”

status on the world stage will be reflected

in its greater economic leverage over
49

countries in the region and elsewhere as

well as its steps to strengthen its military.

East Asian states are adapting to the

advent of a more powerful China by

forging closer economic and political ties

with Beijing, potentially accommodating

themselves to its preferences, particularly

on sensitive issues like Taiwan.

• Japan, Taiwan, and various Southeast

Asian nations, however, also may try

to appeal to each other and the United

States to counterbalance China’s

growing influence.

China will continue to strengthen its

military through developing and acquiring

modern weapons, including advanced

fighter aircraft, sophisticated submarines,

and increasing numbers of ballistic

missiles. China will overtake Russia and

others as the second largest defense

spender after the United States over the

next two decades and will be, by any

measure, a first-rate military power.

Economic setbacks and crises of

confidence could slow China’s

emergence as a full-scale great power,

however. Beijing’s failure to maintain its

economic growth would itself have a

global impact.

• Chinese Government failure to satisfy

popular needs for job creation could

trigger political unrest.

• Faced with a rapidly aging society

beginning in the 2020s, China may be

hard pressed to deal with all the

issues linked to such serious

demographic problems. It is unlikely

to have developed by then the same

coping mechanisms—such as

sophisticated pension and health-care

systems—characteristic of Western

societies.

• If China’s economy takes a downward

turn, regional security would weaken,

resulting in heightened prospects for

political instability, crime, narcotics

trafficking, and illegal migration.

“Economic setbacks and crises of

confidence could slow China’s

emergence as a full-scale great

power.... ”

The rise of India also will present

strategic complications for the region.

Like China, India will be an economic

magnet for the region, and its rise will

have an impact not only in Asia but also

to the north—Central Asia, Iran, and other

countries of the Middle East. India seeks

to bolster regional cooperation both for

strategic reasons and because of its

desire to increase its leverage with the

West, including in such organizations as

the World Trade Organization (WTO).
50
51

As India’s economy grows, governments

in Southeast Asia—Malaysia,

Singapore, Thailand, and other

countries—may move closer to India to

help build a potential geopolitical

counterweight to China. At the same

time, India will seek to strengthen its ties

with countries in the region without

excluding China.

• Chinese-Indian bilateral trade is

expected to rise rapidly from its

current small base of $7.6 billion,

according to Goldman Sachs and

other experts.

Just like China, India may stumble and

experience political and economic

volatility with pressure on resources—

land, water, and energy supplies—

intensifying as it modernizes. For

example, India will face stark choices as

its population increases and its surface

and ground water become even more

polluted.

Other Rising States?

Brazil, Indonesia, Russia, and South

Africa also are poised to achieve

economic growth, although they are

unlikely to exercise the same political

clout as China or India. Their growth

undoubtedly will benefit their neighbors,

but they appear unlikely to become

such economic engines that they will

be able to alter the flow of economic

power within and through their
52

Risks to Chinese Economic Growth

Whether China’s rise occurs smoothly is a key uncertainty. In 2003, the RAND

Corporation identified and assessed eight major risks to the continued rapid growth of

China’s economy over the next decade. Its “Fault Lines in China’s Economic Terrain”

highlighted:

• Fragility of the financial system and state-owned enterprises

• Economic effects of corruption

• Water resources and pollution

• Possible shrinkage of foreign direct investment

• HIV/AIDS and epidemic diseases

• Unemployment, poverty, and social unrest

• Energy consumption and prices

• Taiwan and other potential conflicts

RAND’s estimates of the negative growth impact of these adverse developments

occurring separately on a one-at-a-time basis range from a low of between 0.3 and

0.8 percentage points for the effects of poverty, social unrest, and unemployment to a

high of between 1.8 and 2.2 percentage points for epidemic disease.

• The study assessed the probability that none of these developments would occur

before 2015 as low and noted that they would be more likely to occur in clusters

rather than individually – financial distress, for example, would also worsen

corruption, compound unemployment, poverty, and social unrest, and reduce foreign

direct investment.

• RAND assessed the probability of all of these adverse developments occurring

before 2015 as very low but estimated that should they all occur their cumulative

effect would be to reduce Chinese economic growth by between 7.4 and 10.7

percentage points—effectively wiping out growth during that time frame.
53

India vs. China: Long-Term Prospects

India lags economically behind China, according to most measures such as overall GDP,

amount of foreign investment (today a small fraction of China’s), and per capita income. In

recent years, India’s growth rate has lagged China’s by about 20 percent. Nevertheless,

some experts believe that India might overtake China as the fastest growing economy in the

world. India has several factors working for it:

• Its working-age population will continue to increase well into the 2020s, whereas, due to

the one-child policy, China’s will diminish and age quite rapidly.

• India has well-entrenched democratic institutions, making it somewhat less vulnerable to

political instability, whereas China faces the continuous challenge of reconciling an

increasingly urban and middle-class population with an essentially authoritarian political

system.

• India possesses working capital markets and world-class firms in some important hightech sectors, which China has yet to achieve.

On the other hand, while India has clearly evolved beyond what the Indians themselves

referred to as the 2-3 percent “Hindu growth rate,” the legacy of a stifling bureaucracy still

remains. The country is not yet attractive for foreign investment and faces strong political

challenges as it continues down the path of economic reform. India is also faced with the

burden of having a much larger proportion of its population in desperate poverty. In

addition, some observers see communal tensions just below the surface, citing the overall

decline of secularism, growth of regional and caste-based political parties, and the 2002

“pogrom” against the Muslim minority in Gujarat as evidence of a worsening trend.

Several factors could weaken China’s prospects for economic growth, especially the risks to

political stability and the challenges facing China’s financial sector as it moves toward a

fuller market orientation. China might find its own path toward an “Asian democracy” that

may not involve major instability or disruption to its economic growth—but there are a large

number of unknowns.

In many other respects, both China and India still resemble other developing states in the

problems each must overcome, including the large numbers, particularly in rural areas, who

have not enjoyed major benefits from economic growth. Both also face a potentially serious

HIV/AIDS epidemic that could seriously affect economic prospects if not brought under

control. According to recent UN data, India has overtaken South Africa as the country with

the largest number of HIV-infected people.

The bottom line: India would be hard-pressed to accelerate economic growth rates to levels

above those reached by China in the past decade. But China’s ability to sustain its current

pace is probably more at risk than is India’s; should China’s growth slow by several

percentage points, India could emerge as the world’s fastest-growing economy as we head

towards 2020.
54

regions—a key element in Beijing and

New Delhi’s political and economic

rise.

Experts acknowledge that Brazil is a

pivotal state with a vibrant democracy, a

diversified economy and an

entrepreneurial population, a large

national patrimony, and solid economic

institutions. Brazil’s success or failure in

balancing pro-growth economic measures

with an ambitious social agenda that

reduces poverty and income inequality

will have a profound impact on regionwide economic performance and

governance during the next 15 years.

Luring foreign direct investment and

advancing regional stability and equitable

integration—including trade and

economic infrastructure—probably will

remain axioms of Brazilian foreign policy.

Brazil is a natural partner both for the

United States and Europe and for rising

powers China and India and has the

potential to enhance its leverage as a net

exporter of oil.

Experts assess that over the course of

the next decade and a half Indonesia

may revert to high growth of 6 to 7

percent, which along with its expected

increase in its relatively large population

from 226 to around 250 million would

make it one of the largest developing

economies. Such high growth would

presume an improved investment

environment, including intellectual

property rights protection and openness

to foreign investment. With slower growth

its economy would be unable to absorb

the unemployed or under-employed labor

force, thus heightening the risk of greater

political instability. Indonesia is an

amalgam of divergent ethnic and religious

groups. Although an Indonesian national

identity has been forged in the five

decades since independence, the

government is still beset by stubborn

secessionist movements.

Russia’s energy resources will give a

boost to economic growth, but Russia

faces a severe demographic challenge

resulting from low birth rates, poor

medical care, and a potentially explosive

AIDS situation. US Census Bureau

projections show the working-age

population likely to shrink dramatically by

2020. Russia’s present trajectory away

from pluralism toward bureaucratic

authoritarianism also decreases the

chances it will be able to attract foreign

investment outside the energy sector,

limiting prospects for diversifying its

economy. The problems along its

southern borders—including Islamic

extremism, terrorism, weak states with

poor governance, and conflict—are likely

to get worse over the next 15 years.

Inside Russia, the autonomous republics

in North Caucasus risk failure and will

remain a source of endemic tension and

conflict. While these social and political

factors limit the extent to which Russia

can be a major global player, in the

complex world of 2020 Russia could be

an important, if troubled, partner both for

the established powers, such as the

United States and Europe, and the rising

powers of China and India. The potential

also exists for Russia to enhance its

leverage with others as a result of its

position as a major oil and gas exporter.
55

Asia: The Cockpit for Global Change?

According to the regional experts we consulted, Asia will exemplify most of the trends

that we see as shaping the world over the next 15 years. Northeast and Southeast Asia

will progress along divergent paths—the countries of the North will become wealthier

and more powerful, while at least some states in the South may lag economically and

will continue to face deep ethnic and religious cleavages. As Northeast Asia acts as a

political and economic center of gravity for the countries of the South, parts of

Southeast Asia will be a source of transnational threats—terrorism and organized

crime—to the countries of the North. The North/South divisions are likely to be reflected

in a cultural split between non-Muslim Northeast Asia, which will adapt to the continuing

spread of globalization, and Southeast Asia, where Islamic fundamentalism may

increasingly make inroads in such states as Indonesia, Malaysia, and parts of The

Philippines. The diversion of investment towards China and India also could spur

Southeast Asia to implement plans for a single economic community and investment

area by 2020.

The experts also felt that demographic factors will play a key role in shaping regional

developments. China and other countries in Northeast Asia, including South Korea, will

experience a slowing of population growth and a “graying” of their peoples over the next

15 years. China also will have to face the consequences of a gender imbalance caused

by its one-child policy. In Southeast Asian countries such as The Philippines and

Indonesia, rising populations will challenge the capacity of governments to provide basic

services. Population and poverty pressures will spur migration within the region and to

Northeast Asia. High population concentrations and increasing ease of travel will

facilitate the spread of infectious diseases, risking the outbreak of pandemics.

The regional experts felt that the possibility of major inter-state conflict remains higher in

Asia than in other regions. In their view, the Korean Peninsula and Taiwan Strait crises

are likely to come to a head by 2020, risking conflict with global repercussions. At the

same time, violence within Southeast Asian states—in the form of separatist

insurgencies and terrorism—could intensify. China also could face sustained armed

unrest from separatist movements along its western borders.

Finally, the roles of and interaction between the region’s major powers—China, Japan,

and the US—will undergo significant change by 2020. The United States and China

have strong incentives to avoid confrontation, but rising nationalism in China and fears

in the US of China as an emerging strategic competitor could fuel an increasingly

antagonistic relationship. Japan’s relationship with the US and China will be shaped by

China’s rise and the nature of any settlement on the Korean Peninsula and over

Taiwan.
56

“Russia’s energy resources will

give a boost to economic growth,

but Russia faces a severe

demographic challenge...[with

its] working-age population likely

to shrink dramatically.”

South Africa will continue to be

challenged by AIDS and widespread

crime and poverty, but prospects for its

economy—the largest in the region—look

promising. According to some forecasts,

South Africa’s economy is projected to

grow over the next decade in the 4- to

5-percent range if reformist policies are

implemented. Experts disagree over

whether South Africa can be an engine

for more than southern Africa or will

instead forge closer relationships with

middling or up-and-coming powers on

other continents. South African experts

adept at scenario-building and gaming

see the country’s future as lying with

partnerships formed outside the region.

The “Aging” Powers

Japan’s economic interests in Asia have

shifted from Southeast Asia toward

Northeast Asia—especially China and the

China-Japan-Korea triangle—over the

past two decades and experts believe the

aging of Japan’s work force will reinforce

dependence on outbound investment and

greater economic integration with

Northeast Asia, especially China7

. At the

same time, Japanese concerns regarding

regional stability are likely to grow owing

to the ongoing crisis over North Korea,

continuing tensions between China and

7 Asia’s Shifting Strategic Landscape, Foreign Policy

Research Institute, 26 November 2003.

Taiwan and the challenge of integrating

rising China and India without major

disruption. If anything, growing Chinese

economic power is likely to spur

increased activism by Japan on the world

stage.

Opinion polls indicate growing public

support for Japan becoming a more

“normal” country with a proactive foreign

policy. Experts see various trajectories

that Japan could follow depending on

such factors as the extent of China’s

growing strength, a resurgence or lack of

continued vitality in Japan’s economy, the

level of US influence in the region and

how developments in Korea and Taiwan

play out. At some point, for example,

Japan may have to choose between

“balancing” against or “bandwagoning”

with China.

“...Europe’s strength may be in

providing... a model of global and

regional governance to the rising

powers...”

By most measures—market size, single

currency, highly skilled work force, stable

democratic governments, unified trade

bloc, and GDP—an enlarged Europe will

have the ability to increase its weight on

the international scene. Its crossroads

location and the growing diversity of its

population—particularly in pulling in new

members—provides it with a unique

ability to forge strong bonds both to the

south with the Muslim world and Africa

and to the east with Russia and Eurasia.
57

The extent to which Europe enhances its

clout on the world stage depends on its

ability to achieve greater political

cohesion. In the short term, taking in ten

new east European members probably

will be a “drag” on the deepening of

European Union (EU) institutions

necessary for the development of a

cohesive and shared “strategic vision” for

the EU’s foreign and security policy.

• Unlike the expansion when Ireland,

Spain, Portugal and Greece joined the

Common Market in the 1970s and

early 1980s, Brussels has a fraction of

the structural funds available for

quickly bringing up the Central

Europeans to the economic levels of

the rest of the EU.

• Possible Turkish membership

presents both challenges—because of

Turkey’s size and religious and

cultural differences—as well as

opportunities, provided that mutual

acceptance and agreement can be

achieved. In working through the

problems, a path might be found that

can help Europe to accommodate and

integrate its growing Muslim

population.

Defense spending by individual European

countries, including the UK, France, and

Germany is likely to fall further behind

China and other countries over the next

15 years. Collectively these countries will

outspend all others except the US and

possibly China8

. EU member states

8 Strategic Trends, Joint Doctrine and Concepts

Centre, March 2003.

historically have had difficulties in

coordinating and rationalizing defense

spending in such a way as to boost

capabilities despite progress on a greater

EU security and defense role. Whether

the EU will develop an army is an open

question, in part because its creation

could duplicate or displace NATO forces.

While its military forces have little

capacity for power projection, Europe’s

strength may be in providing, through its

commitment to multilateralism, a model of

global and regional governance to the

rising powers, particularly if they are

searching for a “Western” alternative to

strong reliance on the United States. For

example, an EU-China alliance, though

still unlikely, is no longer unthinkable.

Aging populations and shrinking work

forces in most countries will have an

important impact on the continent,

creating a serious but not insurmountable

economic and political challenge.

Europe’s total fertility rate is about 1.4—

well below the 2.1 replacement level.

Over the next 15 years, West European

economies will need to find several

million workers to fill positions vacated by

retiring workers. Either European

countries adapt their work forces, reform

their social welfare, education, and tax

systems, and accommodate growing

immigrant populations (chiefly from

Muslim countries) or they face a period of

protracted economic stasis that could

threaten the huge successes made in

creating a more United Europe.
58

Global Aging and Migration

According to US Census Bureau projections, about half of the world’s population lives in

countries or territories whose fertility rates are not sufficient to replace their current

populations. This includes not only Europe, Russia, and Japan, where the problem is

particularly severe, but also most parts of developed regions such as Australia, New

Zealand, North America, and East Asian countries like Singapore, Hong Kong, Taiwan,

and South Korea. Certain countries in the developing world, including Arab and Muslim

states such as Turkey, Algeria, Tunisia, and Lebanon, also are dropping below the level

of 2.1 children per woman necessary to maintain long-term population stability.

9

China is a special case where the transition to an aging population—nearly 400 million

Chinese will be over 65 by 2020—is particularly abrupt and the emergence of a serious

gender imbalance could have increasing political, social, and even international

repercussions. An unfunded nationwide pension arrangement means many Chinese

may have to continue to work into old age.

Migration has the potential to help solve the problem of a declining work force in Europe

and, to a lesser degree, Russia and Japan and probably will become a more important

feature of the world of 2020, even if many of the migrants do not have legal status.

Recipient countries face the challenge of integrating new immigrants so as to minimize

potential social conflict.

• Remittances from migrant workers are increasingly important to developing

economies. Some economists believe remittances are greater than foreign direct

investment in most poor countries and in some cases are more valuable than

exports.

However, today one-half of Nigerian-born medical doctors and PhDs reside in the

United States. Most experts do not expect the current, pronounced trend of “brain

drain” from the Middle East and Africa to diminish. Indeed, it could increase with the

expected growth of employment opportunities, particularly in Europe.

9 Nicholas Eberstadt, “Four Surprises in Global Demography,” Foreign Policy Research Institute’s Watch on the

West, Vol 5, Number 5, July 2004.
59

Growing Demands for Energy

Growing demands for energy—

especially by the rising powers—through

2020 will have substantial impacts on

geopolitical relations. The single most

important factor affecting the demand

for energy will be global economic

growth, particularly that of China and

India.

• Despite the trend toward more

efficient energy use, total energy

consumed probably will rise by about

50 percent in the next two decades

compared to a 34 percent expansion

from 1980–2000, with an increasing

share provided by petroleum.

• Renewable energy sources such as

hydrogen, solar, and wind energy

probably will account for only about 8

percent of the energy supply in 2020.

While Russia, China, and India all

plan expansions of their nuclear

power sector, nuclear power

probably will decline globally in

absolute terms in the next decade.

The International Energy Agency

assesses that with substantial

investment in new capacity, overall

energy supplies will be sufficient to meet

growing global demand. Continued
60
61

Could Europe Become A Superpower?

According to the regional experts we consulted, Europe’s future international role depends

greatly on whether it undertakes major structural economic and social reforms to deal with its

aging work-force problem. The demographic picture will require a concerted, multidimensional

approach including:

• More legal immigration and better integration of workers likely to be coming mainly

from North Africa and the Middle East. Even if more guest workers are not allowed in,

Western Europe will have to integrate a growing Muslim population. Barring increased legal

entry may only lead to more illegal migrants who will be harder to integrate, posing a longterm problem. It is possible to imagine European nations successfully adapting their work

forces and social welfare systems to these new realities; it is harder to see a country—

Germany, for example—successfully assimilating millions of new Muslim migrant workers in

a short period of time.

• Increased flexibility in the workplace, such as encouraging young women to take a

few years off to start families in return for guarantees of reentry. Encouraging the

“younger elderly” (50-65 year olds) to work longer or return to the work force also would help

ease labor shortages.

The experts felt that the current welfare state is unsustainable and the lack of any economic

revitalization could lead to the splintering or, at worst, disintegration of the European Union,

undermining its ambitions to play a heavyweight international role.

The experts believe that the EU’s economic growth rate is dragged down by Germany and its

restrictive labor laws. Structural reforms there—and in France and Italy to lesser extents—

remain key to whether the EU as a whole can break out of its slow-growth pattern. A total break

from the post-World War II welfare state model may not be necessary, as shown in Sweden’s

successful example of providing more flexibility for businesses while conserving many worker

rights. Experts are dubious that the present political leadership is prepared to make even this

partial break, believing a looming budgetary crisis in the next five years would be the more likely

trigger for reform.

If no changes were implemented Europe could experience a further overall slowdown, and

individual countries might go their own way, particularly on foreign policy, even if they remained

nominal members. In such a scenario, enlargement is likely to stop with current members,

making accession unlikely for Turkey and the Balkan countries, not to mention long-term

possibilities such as Russia or Ukraine. Doing just enough to keep growth rates at one or two

percent may result in some expansion, but Europe probably would not be able to play a major

international role commensurate with its size.

In addition to the need for increased economic growth and social and welfare reform, many

experts believe the EU has to continue streamlining the complicated decision-making process

that hinders collective action. A federal Europe—unlikely in the 2020 timeframe—is not

necessary to enable it to play a weightier international role so long as it can begin to mobilize

resources and fuse divergent views into collective policy goals. Experts believe an economic

“leap forward”—stirring renewed confidence and enthusiasm in the European project—could

trigger such enhanced international action.
62

limited access of the international oil

companies to major fields could restrain

this investment, however, and many of

the areas—the Caspian Sea, Venezuela,

West Africa and South China Sea—that

are being counted on to provide

increased output involve substantial

political or economic risk. Traditional

suppliers in the Middle East are also

increasingly unstable. Thus sharper

demand-driven competition for resources,

perhaps accompanied by a major

disruption of oil supplies, is among the

key uncertainties.

China and India, which lack adequate

domestic energy resources, will have to

ensure continued access to outside

suppliers; thus, the need for energy will

be a major factor in shaping their foreign

and defense policies, including expanding

naval power.

• Experts believe China will need to

boost its energy consumption by

about 150 percent and India will need

to nearly double its consumption by

2020 to maintain a steady rate of

economic growth.

• Beijing’s growing energy requirements

are likely to prompt China to increase

its activist role in the world—in the

Middle East, Africa, Latin America,

and Eurasia. In trying to maximize

and diversify its energy supplies,

China worries about being vulnerable

to pressure from the United States

which Chinese officials see as having

an aggressive energy policy that can

be used against Beijing.

• For more than ten years Chinese

officials have openly asserted that

production from Chinese firms

The Geopolitics of Gas. Both oil and

gas suppliers will have greater leverage

than today, but the relationship between

gas suppliers and consumers is likely to

be particularly strong because of the

restrictions on delivery mechanisms.

Gas, unlike oil, is not yet a fungible

source of energy, and the

interdependency of pipeline delivery—

producers must be connected to

consumers, and typically neither group

has many alternatives—reinforces

regional alliances.

• More than 95 percent of gas produced

and three quarters of gas traded is

distributed via pipelines directly from

supplier to consumer, and gas-toliquids technology is unlikely to

change these ratios substantially by

2020.

• Europe will have access to supplies in

Russia and North Africa while China

will be able to draw from eastern

Russia, Indonesia, and potentially

huge deposits in Australia. The

United States will look almost

exclusively to Canada and other

western hemisphere suppliers.

investing overseas is more secure

than imports purchased on the

international market. Chinese firms

are being directed to invest in projects

in the Caspian region, Russia, the

Middle East, and South America in

order to secure more reliable access.

Europe’s energy needs are unlikely to

grow to the same extent as those of the

developing world, in part because of

Europe’s expected lower economic

growth and more efficient use of energy.
63

Europe’s increasing preference for

natural gas, combined with depleting

reserves in the North Sea, will give an

added boost to political efforts already

under way to strengthen ties with Russia

and North Africa, as gas requires a higher

level of political commitment by both

sides in designing and constructing the

necessary infrastructure. According to a

study by the European Commission, the

Union’s share of energy from foreign

sources will rise from about half in 2000

to two-thirds by 2020. Gas use will

increase most rapidly due to

environmental concerns and the phasing

out of much of the EU’s nuclear energy

capacity.

“...many of the areas... being

counted on to provide increased

[energy] output involve substantial

political or economic risk.... Thus

sharper demand-driven

competition... perhaps accompanied

by a major disruption of oil supplies,

is among the key uncertainties.”

Deliveries from the Yamal-Europe

pipeline and the Blue Stream pipeline will

help Russia increase its gas sales to the

EU and Turkey by more than 40 percent

over 2000 levels in the first decade of the

21st century; as a result, Russia’s share of

total European demand will rise from 27

percent in 2000 to 31 percent in 2010.

Russia, moreover, as the largest energy

supplier outside of OPEC, will be well

positioned to marshal its oil and gas

reserves to support domestic and foreign

policy objectives. Algeria has the world’s

eighth largest gas reserves and also is

seeking to increase its exports to Europe

by 50 percent by the end of the decade.

US Unipolarity—How Long Can It

Last?

A world with a single superpower is

unique in modern times. Despite the rise

in anti-Americanism, most major powers

today believe countermeasures such as

balancing are not likely to work in a

situation in which the US controls so

many of the levers of power. Moreover,

US policies are not perceived as

sufficiently threatening to warrant such a

step.

• Growing numbers of people around

the world, especially in the Middle

East and the broader Muslim world,

believe the US is bent on regional

domination—or direct political and

economic domination of other states

and their resources. In the future,

growing distrust could prompt

governments to take a more hostile

approach, including resistance to

support for US interests in

multinational forums and development

of asymmetric military capabilities as a

hedge against the US.

“There are few policy-relevant

theories to indicate how states are

likely to deal with a situation in

which the US continues to be the

single most powerful actor

economically, militarily, and

technologically.”

Most countries are likely to experiment

with a variety of different tactics from

various degrees of resistance to

engagement in an effort to influence how

US power is exercised. We expect that

countries will pursue strategies designed

to exclude or isolate the US—perhaps
64

temporarily—in order to force or cajole

the US into playing by others’ rules.

Many countries increasingly believe that

the surest way to gain leverage over

Washington is by threatening to withhold

cooperation. In other forms of bargaining,

foreign governments will try to find ways

to “bandwagon” or connect their policy

agendas to those of the US—for example

on the war on terrorism—and thereby

fend off US opposition to other policies.

Fictional Scenario: Pax 

Americana 

The scenario portrayed below looks at

how US predominance may survive

radical changes to the global political

landscape, with Washington

remaining the central pivot for

international politics. It is depicted as

the diary entry by a fictitious UN

Secretary-General in 2020. Under

this scenario, key alliances and

relationships with Europe and Asia

undergo change. US-European

cooperation is renewed, including on

the Middle East. There are new

security arrangements in Asia, but the

United States still does the heavy

lifting. The scenario also suggests

that Washington has to struggle to

assert leadership in an increasingly

diverse, complex, and fast-paced

world. At the end of the scenario, we

identify lessons learned from how the

scenario played out.
65
66
67
68
69
70
71
72
73

New Challenges to Governance

The nation-state will continue to be the

dominant unit of the global order, but

economic globalization and the dispersion

of technologies, especially information

technologies, will place enormous strains

on governments. Regimes that were able

to manage the challenges of the 1990s

could be overwhelmed by those of 2020.

Contradictory forces will be at work:

authoritarian regimes will face new

pressures to democratize, but fragile new

democracies may lack the adaptive

capacity to survive and develop.

• With migration on the increase in

several places around the world—

from North Africa and the Middle East

into Europe, Latin America and the

Caribbean into the United States, and

increasingly from Southeast Asia into

the northern regions—more countries

will be multi-ethnic and multi-religious

and will face the challenge of

integrating migrants into their societies

while respecting their ethnic and

religious identities.

Halting Progress on Democratization

Global economic growth has the potential

to spur democratization, but backsliding

by many countries that were considered

part of the “third wave” of democratization

is a distinct possibility. In particular, by

2020 democratization may be partially

reversed among the states of the former

Soviet Union and in Southeast Asia,

some of which never really embraced

democracy. Russia and most of the

Central Asian regimes appear to be

slipping back toward authoritarianism,

and global economic growth probably will

not on its own reverse such a trend. The

development of more diversified

economies in these countries—by no

means inevitable—would be crucial in

fostering the growth of a middle class,

which in turn would spur democratization.

• Beset already by severe economic

inequalities, aging Central Asian rulers

must contend with unruly and large

youth populations lacking broad

economic opportunities. Central

Asian governments are likely to

suppress dissent and revert to

authoritarianism to maintain order,

risking growing insurgencies.

“...backsliding by many countries

that were considered part of the

‘third wave’ of democratization is

a distinct possibility.”

Chinese leaders will face a dilemma over

how much to accommodate pluralistic

pressure and relax political controls or

risk a popular backlash if they do not.

Beijing also has to weigh in the balance

its ambition to be a major global player,

which would be enhanced if its rulers

moved towards political reform.

China may pursue an “Asian way” of

democracy that might involve elections at

the local level and a consultative

mechanism on the national level, perhaps
74

Eurasian Countries: Going Their Separate Ways?

The regional experts who attended our conference felt that Russia’s political development since

the fall of Communism has been complicated by the continuing search for a post-Soviet national

identity. Putin has increasingly appealed to Russian nationalism—and, occasionally,

xenophobia—to define Russian identity. His successors may well define Russian identity by

highlighting Russia’s imperial past and its domination over its neighbors even as they reject

communist ideology.

In the view of the experts, Central Asian states are weak, with considerable potential for

religious and ethnic conflict over the next 15 years. Religious and ethnic movements could

have a destabilizing impact across the region. Eurasia is likely to become more differentiated

despite the fact that demographic counterforces—such as a dearth of manpower in Russia and

western Eurasia and an oversupply in Central Asia—could help pull the region together.

Moreover, Russia and the Central Asians are likely to cooperate in developing transportation

corridors for energy supplies.

The participants assessed that among the resource-rich countries, Russia has the best

prospects for expanding its economy beyond resource extraction and becoming more integrated

into the world economy. To diversify its economy, Russia would need to undertake structural

changes and institute the rule of law, which could in turn encourage foreign direct investment

outside of the energy sector. Knowing that Europe probably would want to forge a “special

relationship” with a Russia that is stronger economically, Moscow probably would be more

tolerant of former Soviet states moving closer to Europe. If Russia fails to diversify its economy,

it could well experience the petro-state phenomenon of unbalanced economic development,

huge income inequality, capital flight, and increased social problems.

Regional experts were less confident about the potential for significant economic diversification

in the other resource-rich countries in Central Asia and the South Caucasus over the next 15

years—in particular, Kazakhstan, Turkmenistan, and Azerbaijan. For countries with more

limited natural resources, such as Ukraine, Georgia, Kyrgyztan, Tajikistan and Uzbekistan, the

challenge will be to develop effective project and service industries, requiring better governance.

Central Asian countries—Kazakhstan, Krgyzstan, Tajikistan, Turkmenistan, and Uzbekistan—

face the stiff challenge of keeping the social peace in a context of high population growth, a

relatively young population, limited economic prospects, and growing radical Islamic influence.

Allowing more emigration could help alleviate these pressures in Central Asian countries.

Russia would benefit from migration as a means of compensating for its loss of approximately

one million people a year through 2020. Russia, however, has little experience in integrating

migrants from other cultures; Russian nationalism is on the increase as a result of growing

ethnic unrest domestically, and our experts believe any efforts to expand immigration policies

would be exploited by nationalist politicians.

Ironically, the experts foresaw more unity if economic conditions worsen globally and Eurasia is

isolated. In that case, a stagnant Russia would be looked to by the others to maintain order

along the southern rim as some Central Asian countries—Turkmenistan, Tajikistan, and

Kyrgyzstan—faced potential collapse.
75

with the Communist Party retaining

control over the central government.

• Younger Chinese leaders who are

already exerting influence as mayors

and regional officials have been

trained in Western-style universities

and have a good understanding of

international standards of governance.

• Most of the experts at our regional

conference, however, believe present

and future leaders are agnostic on the

issue of democracy and are more

interested in developing what they

perceive to be the most effective

model of governance.

Democratic progress could gain ground in

key Middle Eastern countries, which thus

far have been excluded from the process

by repressive regimes. Success in

establishing a working democracy in Iraq

and Afghanistan—and democratic

consolidation in Indonesia—would set an

example for other Muslim and Arab

states, creating pressures for change.

However, a 2001 Freedom House study

showed a dramatic and expanding gap in

the levels of freedom and democracy

between Islamic countries and the rest of

the world. The lack of economic growth

in the Middle East outside the energy

sector is one of the primary underlying

factors for the slow pace. Many regional

experts are not hopeful that the

generational turnover in several of the

regimes will by itself spur democratic

reform.

• The extent to which radical Islam

grows and how regimes respond to its

pressures will also have long-term

repercussions for democratization and

the growth of civil society institutions,

although radicals may use the ballot

box to gain power.

• An extended period of high oil prices

would allow regimes to put off

economic and fiscal reform.

High-Tech Pressures on Governance.

Today individual PC users have more

capacity at their fingertips than NASA had

with the computers used in its first moon

launches. The trend toward even more

capacity, speed, affordability, and mobility

will have enormous political implications:

myriad individuals and small groups—

many of whom had not been previously

so empowered—will not only connect with

one another but will plan, mobilize, and

accomplish tasks with potentially more

satisfying and efficient results than their

governments can deliver. This almost

certainly will affect individuals’

relationships with and views of their

governments and will put pressure on

some governments for more

responsiveness.

• China is experiencing among the

fastest rates of increase of Internet

and mobile phone users in the world,

according to the International

Telecommunications Union, and is the

leading market for broadband

communication.

• Reports of growing investment by

many Middle Eastern governments in

developing high-speed information

infrastructures, although they are not

yet widely available to the population

nor well-connected to the larger world,

show obvious potential for the spread

of democratic—and undemocratic—

ideas.
76

Climate Change and Its Implications Through 2020

Policies regarding climate change are likely to feature significantly in multilateral

relations, and the United States, in particular, is likely to face significant bilateral

pressure to change its domestic environmental policies and to be a leader in global

environmental efforts. There is a strong consensus in the scientific community that the

greenhouse effect is real and that average surface temperatures have risen over the

last century, but uncertainty exists about causation and possible remedies. Experts in a

NIC-sponsored conference judged that concerns about greenhouse gases, of which

China and India are large producers, will increase steadily through 2020. There are

likely to be numerous weather-related events that, correctly or not, will be linked to

global warming. Any of these events could lead to widespread calls for the United

States, as the largest producer of greenhouse gases, to take dramatic steps to reduce

its consumption of fossil fuels.

Policymakers will face a dilemma: an environmental regime based solely on economic

incentives will probably not produce needed technological advances because firms will

be hesitant to invest in research when there is great uncertainty about potential profits.

On the other hand, a regime based on government regulation will tend to be costly and

inflexible. The numerous obstacles to multilateral action include resistance from OPEC

countries that depend on fossil fuel revenues, the developing world’s view that climate

change is a problem created by the industrial world and one they cannot address given

their economic constraints, and the need for significant technological innovation to

maximize energy efficiency.

Among reasons for optimism, participants noted that the world is ready and eager for

US leadership and that new multilateral institutions are not needed to address this

issue. Indeed, crafting a policy to limit carbon emissions would be simplified by the fact

that three political entities—the United States, the European Union, and China—

account for over half of all CO2 emitted into the atmosphere. An agreement that

included these three plus the Russian Federation, Japan, and India would cover twothirds of all carbon emissions.
77

• Some states will seek to control the

Internet and its contents, but they will

face increasing challenges as new

networks offer multiple means of

communicating.

Growing connectivity also will be

accompanied by the proliferation of

transnational virtual communities of

interest, a trend which may complicate

the ability of state and global institutions

to generate internal consensus and

enforce decisions and could even

challenge their authority and legitimacy.

Groups based on common religious,

cultural, ethnic or other affiliations may be

torn between their national loyalties and

other identities. The potential is

considerable for such groups to drive

national and even global political

decisionmaking on a wide range of issues

normally the purview of governments.

The Internet in particular will spur the

creation of global movements, which may

emerge even more as a robust force in

international affairs. For example,

technology-enabled diaspora

communications in native languages

could lead to the preservation of

language and culture in the face of

widespread emigration and cultural

change as well as the generation of

political and economic power.

Populist themes are likely to emerge as

a potent political and social force,

especially as globalization risks

aggravating social divisions along

economic and ethnic lines. In parts of

Latin America particularly, the failure of

elites to adapt to the evolving demands of

free markets and democracy probably will

fuel a revival in populism and drive

indigenous movements, which so far

have sought change through democratic

means, to consider more drastic means

for seeking what they consider their “fair

share” of political power and wealth.

• However, as with religion, populism

will not necessarily be inimical to

political development and can serve to

broaden participation in the political

process. Few experts fear a general

backsliding to the rule of military

juntas in Latin America.

The Latin American countries that are

adapting to challenges most effectively

are building sturdier and more capable

democratic institutions to implement more

inclusive and responsive policies and

enhance citizen and investor confidence.

A sense of economic progress and hope

for its continuance appears essential to

the long-term credibility of democratic

systems.

Rising nationalism and a trend toward

populism also will present a challenge to

governments in Asia. Many, such as

Laos, Cambodia, and Burma, are unable

to deliver on expanding popular demands

and risk becoming state failures.
78

Latin America in 2020: Will Globalization Cause the Region to Split?

The experts we consulted in Latin America contended that global changes over the next

15 years could deepen divisions and serve to split Latin America apart in economic,

investment, and trade policy terms. As the Southern Cone, particularly Brazil and Chile,

reach out to new partners in Asia and Europe, Central America and Mexico, along with

Andean countries, could lag behind and remain dependent on the US and Canada as

their preferred trade partners and aid providers.

For Latin Americans, government ineffectiveness, in part, prevented many countries

from realizing the full measure of economic and social benefits from greater integration

into the global economy in the past decade. Instead, the gap between rich and the

poor, the represented and the excluded, has grown. Over the next 15 years, the effects

of continued economic growth and global integration are likely to be uneven and

fragmentary. Indeed, regional experts foresee an increasing risk of the rise of

charismatic, self-styled populist leaders, historically common in the region, who would

play on popular concerns over inequities between “haves” and “have-nots” in the

weakest states in Central America and Andean countries, along with parts of Mexico. In

the most profoundly weak of these governments, particularly where the criminalization

of the society, and even the state, is most apparent, the leaders could have an

autocratic bent and be more stridently anti-American.

The experts made the following observations on regional prospects in other areas:

• Identity politics. Increasing portions of the population are identifying themselves as

indigenous peoples and will demand not only a voice but, potentially, a new social

contract. Many reject globalization as it has played out in the region, viewing it as an

homogenizing force that undermines their unique cultures and as a US-imposed,

neo-liberal economic model whose inequitably distributed fruits are rooted in the

exploitation of labor and the environment.

• Information technology. The universalization of the Internet, both as a mass

media and means of inter-personal communication, will help educate, connect,

mobilize, and empower those traditionally excluded.
79

• Experts note that a new generation of

leaders is emerging in Africa from the

private sector; these leaders are much

more comfortable with democracy

than their predecessors and might

provide a strong internal dynamic for

democracy in the future.

Identity Politics

Part of the pressure on governance will

come from new forms of identity politics

centered on religious convictions and

ethnic affiliation. Over the next 15 years,

religious identity is likely to become an

increasingly important factor in how

people define themselves. The trend

toward identity politics is linked to

increased mobility, growing diversity of

hostile groups within states, and the

diffusion of modern communications

technologies.

• The primacy of ethnic and religious

identities will provide followers with a

ready-made community that serves as

a “social safety net” in times of need—

particularly important to migrants.

Such communities also provide

networks that can lead to job

opportunities.

“Over the next 15 years, religious

identity is likely to become an

increasingly important factor in

how people define themselves.”

While we do not have comprehensive

data on the number of people who have

joined a religious faith or converted from

one faith to another in recent years,

trends seem to point toward growing

numbers of converts and a deepening

religious commitment by many religious

adherents.

• For example, Christianity, Buddhism,

and other religions and practices are

spreading in such countries as China

as Marxism declines, and the

proportion of evangelical converts in

traditionally heavily Catholic Latin

America is rising.

• By 2020, China and Nigeria will have

some of the largest Christian

communities in the world, a shift that

will reshape the traditionally Westernbased Christian institutions, giving

them more of an African or Asian or,

more broadly, a developing world

face.

• Western Europe stands apart from

this growing global “religiosity” except

for the migrant communities from

Africa and the Middle East. Many of

the churches’ traditional functions—

education, social services, etc.—are

now performed by the state. A more

pervasive, insistent secularism,

however, might not foster the cultural

acceptance of new Muslim immigrants

who view as discriminatory the ban in

some West European countries

against displays of religious

adherence.

Many religious adherents—whether

Hindu nationalists, Christian evangelicals

in Latin America, Jewish fundamentalists

in Israel, or Muslim radicals—are

becoming “activists.” They have a

worldview that advocates change of

society, a tendency toward making sharp

Manichaean distinctions between good

and evil, and a religious belief system that

connects local conflicts to a larger

struggle.
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Such religious-based movements have

been common in times of social and

political turmoil in the past and have

oftentimes been a force for positive

change. For example, scholars see the

growth of evangelism in Latin America as

providing the uprooted, racially

disadvantaged and often poorest groups,

including women, “with a social network

that would otherwise be lacking...

providing members with skills they need

to survive in a rapidly developing

society...(and helping) to promote the

development of civil society in the

region.”10

At the same time, the desire by activist

groups to change society often leads to

more social and political turmoil, some of

it violent. In particular, there are likely to

be frictions in mixed communities as the

activists attempt to gain converts among

other religious groups or older

established religious institutions. In

keeping with the intense religious

convictions of many of these movements,

activists define their identities in

opposition to “outsiders,” which can foster

strife.

Radical Islam. Most of the regions that

will experience gains in religious

“activists” also have youth bulges, which

experts have correlated with high

numbers of radical adherents, including

Muslim extremists.11

• Youth bulges are expected to be

especially acute in most Middle

10 Philip Jenkins, consultations with the National

Intelligence Council, August 4, 2004.

11 We define Muslim extremists as a subset of Islamic

activists. They are committed to restructuring political

society in accordance with their vision of Islamic law

and are willing to use violence.

Eastern and West African countries

until at least 2005-2010, and the

effects will linger long after.

• In the Middle East, radical Islam’s

increasing hold reflects the political

and economic alienation of many

young Muslims from their

unresponsive and unrepresentative

governments and related failure of

many predominantly Muslim states to

reap significant economic gains from

globalization.

The spread of radical Islam will have a

significant global impact leading to 2020,

rallying disparate ethnic and national

groups and perhaps even creating an

authority that transcends national

boundaries. Part of the appeal of radical

Islam involves its call for a return by

Muslims to earlier roots when Islamic

civilization was at the forefront of global

change. The collective feelings of

alienation and estrangement which

radical Islam draws upon are unlikely to

dissipate until the Muslim world again

appears to be more fully integrated into

the world economy.

“Radical Islam will have a

significant global impact...

rallying disparate ethnic and

national groups and perhaps even

creating an authority that

transcends national boundaries.”

Radical Islam will continue to appeal to

many Muslim migrants who are attracted

to the more prosperous West for

employment opportunities but do not feel

at home in what they perceive as an alien

culture.
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Studies show that Muslim immigrants are

being integrated as West European

countries become more inclusive, but

many second- and third-generation

immigrants are drawn to radical Islam as

they encounter obstacles to full

integration and barriers to what they

consider to be normal religious practices.

Differences over religion and ethnicity

also will contribute to future conflict, and,

if unchecked, will be a cause of regional

strife. Regions where frictions risk

developing into wider civil conflict include

Southeast Asia, where the historic

Christian-Muslim faultlines cut across

several countries, including West Africa,

The Philippines, and Indonesia.

• Schisms within religions, however

historic and longlasting, also could

lead to conflict in this era of increased

religious identity. A Shia-dominated

Iraq is likely to encourage greater

activism by Shia minorities in other

Middle Eastern nations, such as Saudi

Arabia and Pakistan.
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Fictional Scenario: A New 

Caliphate 

The fictional scenario portrayed below

provides an example of how a global

movement fueled by radical religious

identity could emerge. Under this

scenario, a new Caliphate is proclaimed

and manages to advance a powerful

counter ideology that has widespread

appeal. It is depicted in the form of a

hypothetical letter from a fictional

grandson of Bin Ladin to a family

relative in 2020. He recounts the

struggles of the Caliph in trying to

wrest control from traditional regimes

and the conflict and confusion which

ensue both within the Muslim world

and outside between Muslims and the

United States, Europe, Russia and

China. While the Caliph’s success in

mobilizing support varies, places far

outside the Muslim core in the Middle

East—in Africa and Asia—are

convulsed as a result of his appeals.

The scenario ends before the Caliph is

able to establish both spiritual and

temporal authority over a territory—

which historically has been the case for

previous Caliphates. At the end of the

scenario, we identify lessons to be

drawn.
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Pervasive Insecurity

We foresee a more pervasive sense of

insecurity, which may be as much based

on psychological perceptions as

physical threats, by 2020. The

psychological aspects, which we have

addressed earlier in this paper, include

concerns over job security as well as

fears revolving around migration among

both host populations and migrants.

Terrorism and internal conflicts could

interrupt the process of globalization by

significantly increasing the security

costs associated with international

commerce, encouraging restrictive

border control policies, and adversely

affecting trade patterns and financial

markets. Although far less likely than

internal conflicts, conflict among great

powers would create risks to world

security. The potential for the

proliferation of weapons of mass

destruction (WMD) will add to the

pervasive sense of insecurity.

Transmuting International Terrorism

The key factors that spawned

international terrorism show no signs of

abating over the next 15 years. Experts

assess that the majority of international

terrorist groups will continue to identify

with radical Islam. The revival of Muslim

identity will create a framework for the

spread of radical Islamic ideology both

inside and outside the Middle East,

including Western Europe, Southeast

Asia and Central Asia.

• This revival has been accompanied

by a deepening solidarity among

Muslims caught up in national or

regional separatist struggles, such

as Palestine, Chechnya, Iraq,

Kashmir, Mindanao, or southern

Thailand and has emerged in

response to government repression,

corruption, and ineffectiveness.

• A radical takeover in a Muslim

country in the Middle East could spur

the spread of terrorism in the region

and give confidence to others that a

new Caliphate is not just a dream.

• Informal networks of charitable

foundations, madrasas, hawalas,12

and other mechanisms will continue

to proliferate and be exploited by

radical elements.

• Alienation among unemployed

youths will swell the ranks of those

vulnerable to terrorist recruitment.

“Our greatest concern is that

[terrorist groups] might acquire

biological agents, or less likely, a

nuclear device, either of which

could cause mass casualties.”

There are indications that the Islamic

radicals’ professed desire to create a

transnational insurgency, that is, a drive

by Muslim extremists to overthrow a

number of allegedly apostate secular

12 Hawalas constitute an informal banking system.
94

governments with predominately Muslim

subjects, will have an appeal to many

Muslims.

• Anti-globalization and opposition to

US policies could cement a greater

body of terrorist sympathizers,

financiers, and collaborators.

“...We expect that by 2020

al-Qa’ida will have been

superceded by similarly inspired

but more diffuse Islamic

extremist groups.”

A Dispersed Set of Actors. Pressure

from the global counterterrorism effort,

together with the impact of advances in

information technology, will cause the

terrorist threat to become increasingly

decentralized, evolving into an eclectic

array of groups, cells, and individuals.

While taking advantage of sanctuaries

around the world to train, terrorists will

not need a stationary headquarters to

plan and carry out operations. Training

materials, targeting guidance, weapons

know-how, and fund-raising will

increasingly become virtual (i.e., online).

The core al-Qa’ida membership

probably will continue to dwindle, but

other groups inspired by al-Qa’ida,

regionally based groups, and individuals

labeled simply as jihadists—united by a

common hatred of moderate regimes

and the West—are likely to conduct

terrorist attacks. The al-Qa’ida

membership that was distinguished by

having trained in Afghanistan will

gradually dissipate, to be replaced in

part by the dispersion of the

experienced survivors of the conflict in

Iraq. We expect that by 2020 al-Qa’ida

will have been superceded by similarly

inspired but more diffuse Islamic

extremist groups, all of which will

oppose the spread of many aspects of

globalization into traditional Islamic

societies.

• Iraq and other possible conflicts in

the future could provide recruitment,

training grounds, technical skills and

language proficiency for a new class

of terrorists who are “professionalized” and for whom political

violence becomes an end in itself.

• Foreign jihadists—individuals ready

to fight anywhere they believe

Muslim lands are under attack by

what they see as “infidel invaders”—

enjoy a growing sense of support

from Muslims who are not

necessarily supporters of terrorism.

Even if the number of extremists

dwindles, however, the terrorist threat is

likely to remain. Through the Internet

and other wireless communications

technologies, individuals with ill intent

will be able to rally adherents quickly on

a broader, even global, scale and do so

obscurely. The rapid dispersion of bioand other lethal forms of technology

increases the potential for an individual

not affiliated with any terrorist group to

be able to inflict widespread loss of life.

Weapons, Tactics, and Targets.

In the past, terrorist organizations relied

on state sponsors for training, weapons,

logistical support, travel documents, and

money in support of their operations. In

a globalized world, groups such as

Hizballah are increasingly self-sufficient

in meeting these needs and may act in a

state-like manner to preserve “plausible

deniability” by supplying other groups,

working through third parties to meet
95

their objectives, and even engaging

governments diplomatically.

Most terrorist attacks will continue to

employ primarily conventional weapons,

incorporating new twists to keep

counterterrorist planners off balance.

Terrorists probably will be most original

not in the technologies or weapons they

employ but rather in their operational

concepts—i.e., the scope, design, or

support arrangements for attacks.

• One such concept that is likely to

continue is a large number of

simultaneous attacks, possibly in

widely separated locations.

While vehicle-borne improvised

explosive devices will remain popular as

asymmetric weapons, terrorists are

likely to move up the technology ladder

to employ advanced explosives and

unmanned aerial vehicles.

“Terrorist use of biological

agents is therefore likely, and

the range of options will grow.”

The religious zeal of extremist Muslim

terrorists increases their desire to

perpetrate attacks resulting in high

casualties. Historically, religiously

inspired terrorism has been most

destructive because such groups are

bound by few constraints.

The most worrisome trend has been an

intensified search by some terrorist

groups to obtain weapons of mass

destruction. Our greatest concern is

that these groups might acquire

biological agents or less likely, a nuclear

device, either of which could cause

mass casualties.

• Bioterrorism appears particularly

suited to the smaller, better-informed

groups. Indeed, the bioterrorist’s

laboratory could well be the size of a

household kitchen, and the weapon

built there could be smaller than a

toaster. Terrorist use of biological

agents is therefore likely, and the

range of options will grow. Because

the recognition of anthrax, smallpox

or other diseases is typically

delayed, under a “nightmare

scenario” an attack could be well

under way before authorities would

be cognizant of it.

• The use of radiological dispersal

devices can be effective in creating

panic because of the public’s

misconception of the capacity of

such attacks to kill large numbers of

people.

With advances in the design of

simplified nuclear weapons, terrorists

will continue to seek to acquire fissile

material in order to construct a nuclear

weapon. Concurrently, they can be

expected to continue attempting to

purchase or steal a weapon, particularly

in Russia or Pakistan. Given the

possibility that terrorists could acquire

nuclear weapons, the use of such

weapons by extremists before 2020

cannot be ruled out.

We expect that terrorists also will try to

acquire and develop the capabilities to

conduct cyber attacks to cause physical

damage to computer systems and to

disrupt critical information networks.

The United States and its interests

abroad will remain prime terrorist

targets, but more terrorist attacks might
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Organized Crime

Changing geostrategic patterns will shape global organized criminal activity over the

next 15 years. Organized crime is likely to thrive in resource-rich states undergoing

significant political and economic transformation, such as India, China, Russia, Nigeria,

and Brazil as well as Cuba, if it sees the end of its one-party system. Some of the

former states of the Soviet Union and the Warsaw Pact also will remain vulnerable to

high levels of organized crime.

• States that transition to one-party systems—such as any new Islamic-run state—will

be vulnerable to corruption and attendant organized crime, particularly if their

ideology calls for substantial government involvement in the economy.

• Changing patterns of migration may introduce some types of organized crime into

countries that have not previously experienced it. Ethnic-based organized crime

groups typically prey on members of their own diasporas and use them to gain

footholds in new regions.

Some organized crime syndicates will form loose alliances with one another. They will

attempt to corrupt leaders of unstable, economically fragile, or failing states, insinuate

themselves into troubled banks and businesses, exploit information technologies, and

cooperate with insurgent movements to control substantial geographic areas.

Organized crime groups usually do not want to see governments toppled but thrive in

countries where governments are weak, vulnerable to corruption, and unable or

unwilling to consistently enforce the rule of law.

• Criminal syndicates, particularly drug trafficking syndicates, may take virtual control

of regions within failing states to which the central government cannot extend its writ.

If governments in countries with WMD capabilities lose control of their inventories, the

risk of organized crime trafficking in nuclear, biological, or chemical weapons will

increase between now and 2020.

We expect that the relationship between terrorists and organized criminals will remain

primarily a matter of business, i.e., that terrorists will turn to criminals who can provide

forged documents, smuggled weapons, or clandestine travel assistance when the

terrorists cannot procure these goods and services on their own. Organized criminal

groups, however, are unlikely to form long-term strategic alliances with terrorists.

Organized crime is motivated by the desire to make money and tends to regard any

activity beyond that required to effect profit as bad for business. For their part, terrorist

leaders are concerned that ties to non-ideological partners will increase the chance of

successful police penetration or that profits will seduce the faithful.
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Over the next 15 years, a growing range

of actors, including terrorists, may acquire

and develop capabilities to conduct both

physical and cyber attacks against nodes

of the world’s information infrastructure,

including the Internet, telecommunications networks, and computer systems

that control critical industrial processes

such as electricity grids, refineries, and

flood control mechanisms. Terrorists

already have specified the US information

infrastructure as a target and currently

are capable of physical attacks that would

cause at least brief, isolated disruptions.

The ability to respond to such attacks will

require critical technology to close the

gap between attacker and defender.

A key cyber battlefield of the future will be

the information on computer systems

themselves, which is far more valuable

and vulnerable than physical systems.

New technologies on the horizon provide

capabilities for accessing data, either

through wireless intercept, intrusion into

Internet-connected systems, or through

direct access by insiders.

be aimed at Middle Eastern regimes and

at Western Europe.

Intensifying Internal Conflicts

Lagging economies, ethnic affiliations,

intense religious convictions, and youth

bulges will align to create a “perfect

storm,” creating conditions likely to spawn

internal conflict. The governing capacity

of states, however, will determine

whether and to what extent conflicts

actually occur. Those states unable both

to satisfy the expectations of their

peoples and to resolve or quell conflicting

demands among them are likely to

encounter the most severe and most

frequent outbreaks of violence. For the

most part, those states most susceptible

to violence are in a great arc of instability

from Sub-Saharan Africa, through North

Africa, into the Middle East, the Balkans,

the Caucasus and South and Central

Asia and through parts of Southeast Asia.

Countries in these regions are generally

those “behind” the globalization curve.

• The number of internal conflicts is

down significantly since the late 1980s

and early 1990s, when the breakup of

the Soviet Union and Communist

regimes in Central Europe allowed

suppressed ethnic and nationalist

strife to flare. Although a leveling off

point has been reached, the continued

prevalence of troubled and

institutionally weak states creates

conditions for such conflicts to occur

in the future.

“Lagging economies, ethnic

affiliations, intense religious

convictions, and youth bulges will

align to create a ‘perfect storm’

[for] internal conflict.”

Internal conflicts are often particularly

vicious, long-lasting, and difficult to

terminate. Many of these conflicts

generate internal displacements and

external refugee flows, destabilizing

neighboring countries.

• Sub-Saharan Africa will continue to be

particularly at risk for major new or

worsening humanitarian emergencies

stemming from conflict. Genocidal

conflicts aimed at annihilating all or

part of a racial, religious, or ethnic

group, and conflicts caused by other

crimes against humanity—such as

Cyber Warfare?
98

forced, large-scale expulsions of

populations—are particularly likely to

generate migration and massive,

intractable humanitarian needs.

“Africa in 2020 ... will

increasingly resemble a

patchwork quilt with significant

differences in economic and

political performance.”

Some internal conflicts, particularly those

that involve ethnic groups straddling

national boundaries, risk escalating into

regional conflicts. At their most extreme,

internal conflicts can produce a failing or

failed state, with expanses of territory and

populations devoid of effective

governmental control. In such instances,

those territories can become sanctuaries

for transnational terrorists (like al-Qa’ida

in Afghanistan) or for criminals and drug

cartels (such as in Colombia).

Rising Powers: Tinder for Conflict?

The likelihood of great power conflict

escalating into total war in the next 15

years is lower than at any time in the past

century, unlike during previous centuries

when local conflicts sparked world wars.

The rigidities of alliance systems before

World War I and during the interwar

period, as well as the two-bloc standoff

during the Cold War, virtually assured

that small conflicts would be quickly

generalized. Now, however, even if

conflict would break out over Taiwan or

between India and Pakistan, outside

powers as well as the primary actors

would want to limit its extent.

Additionally, the growing dependence on

global financial and trade networks

increasingly will act as a deterrent to

conflict among the great powers—the US,

Europe, China, India, Japan and Russia.

This does not eliminate the possibility of

great power conflict, however. The

absence of effective conflict resolution

mechanisms in some regions, the rise of

nationalism in some states, and the raw

emotions on both sides of key issues

increase the chances for miscalculation.

• Although a military confrontation

between China and Taiwan would

derail Beijing’s efforts to gain

acceptance as a regional and global

power, we cannot discount such a

possibility. Events such as Taiwan’s

proclamation of independence could

lead Beijing to take steps it otherwise

might want to avoid, just as China’s

military buildup enabling it to bring

overwhelming force against Taiwan

increases the risk of military conflict.

• India and Pakistan appear to

understand the likely prices to be paid

by triggering a conflict. But

nationalistic feelings run high and are

not likely to abate. Under plausible

scenarios Pakistan might use nuclear

weapons to counter success by the

larger Indian conventional forces,

particularly given Pakistan’s lack of

strategic depth.

“Advances in modern

weaponry—longer ranges,

precision delivery, and more

destructive conventional

munitions—create circumstances

encouraging the preemptive use

of military force.”

Should conflict occur that involved one or

more of the great powers, the

consequences would be significant.

Advances in modern weaponry—longer
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How Can Sub-Saharan Africa Move Forward?

Most of the regional experts we consulted believe the most likely scenario for Africa in 2020

is that it will increasingly resemble a patchwork quilt with significant differences in economic

and political performance.

Africa’s capacity to benefit from the positive elements of globalization will depend on the

extent to which individual countries can bring an end to conflict, improve governance, rein in

corruption, and establish the rule of law. If progress is achieved in these areas, an

expansion of foreign investment, which currently is mostly confined to the oil sector, is

possible. Our regional experts felt that if African leaders used such investment to help their

economies grow—opening avenues to wealth other than through the power of the state—

they might be able to mitigate the myriad other problems facing their countries, with the

prospect of prosperity decreasing the level of conflict.

Expanded development of existing or new sources of wealth will remain key. Although

mineral and natural resources are not evenly distributed among its countries, Sub-Saharan

Africa is well endowed with them and has the potential not only to be self-sufficient in food,

but to become a major exporter of agricultural, animal, and fish products. The lowering or

elimination of tariff barriers and agricultural subsidies in the European Union and the United

States, combined with the demand for raw materials from the burgeoning Chinese and

Indian economies, could provide major stimulus to African economies and overcome

decades of depressed commodity prices.

African experts have agreed that economic reform and good governance are essential for

high economic growth and also have concluded that African countries must take the

initiative in negotiating new aid and trade relationships that heretofore were essentially

dictated by the international financial institutions and the developed world. The New

Partnership for Africa’s Development (NEPAD), with its peer review mechanism, provides

one mechanism for bringing about this economic transformation, if its members individually

and collectively honor their commitments.

Over the next 15 years, democratic reform will remain slow and imperfect in many countries

due to a host of social and economic problems, but it is highly unlikely that democracy will

be challenged as the norm in Africa. African leaders face alliances of international and

domestic nongovernmental organizations that sometimes want to supplant certain state

services, criminal networks that operate freely across borders, and Islamic groups bent on

establishing safehavens. Some states may fail but in others the overall quality of

democracy probably will increase. An emerging generation of leaders includes many from

the private sector, who are more comfortable with democracy than their predecessors and

who could provide a strong political dynamic for democracy in the future.

Leadership will remain the ultimate wild card, which, even in the least promising

circumstances, could make a huge, positive difference. Although countries with poor

leadership will find it harder not to fail, those with good leadership that promotes order,

institutions, and conflict resolution will at least have a chance of progressing.
100

ranges, precision delivery, and more

destructive conventional munitions—

create circumstances encouraging the

preemptive use of military force. The

increased range of new missile and

aircraft delivery systems provides

sanctuary to their possessors.

Until strategic defenses become as

strong as strategic offenses, there will be

great premiums associated with the ability

to expand conflicts geographically in

order to deny an attacker sanctuary.

Moreover, a number of recent hightechnology conflicts have demonstrated

that the outcomes of early battles of

major conflicts most often determine the

success of entire campaigns. Under

these circumstances, military experts

believe preemption is likely to appear

necessary for strategic success.

The WMD Factor

Nuclear Weapons. Over the next 15

years, a number of countries will continue

to pursue their nuclear, chemical, and

biological weapons programs and in

some cases will enhance their

capabilities. Current nuclear weapons

states will continue to improve the

survivability of their deterrent forces and

almost certainly will improve the reliability,

accuracy, and lethality of their delivery

systems as well as develop capabilities to

penetrate missile defenses. The open

demonstration of nuclear capabilities by

any state would further discredit the

current nonproliferation regime, cause a

possible shift in the balance of power,

and increase the risk of conflicts

escalating into nuclear ones.

• Countries without nuclear weapons,

especially in the Middle East and

Northeast Asia, may decide to seek

them as it becomes clear that their

neighbors and regional rivals already

are doing so.

• The assistance of proliferators,

including former private entrepreneurs

such as the A.Q. Khan network, will

reduce the time required for additional

countries to develop nuclear weapons.

“Countries without nuclear

weapons ... may decide to seek

them as it becomes clear that their

neighbors and regional rivals are

already doing so.”

Chemical and Biological Weapons.

Developments in CW and BW agents and

the proliferation of related expertise will

pose a substantial threat, particularly from

terrorists, as we have noted.

• Given the goal of some terrorist

groups to use weapons that can be

employed surreptitiously and generate

dramatic impact, we expect to see

terrorist use of some readily available

biological and chemical weapons.

Countries will continue to integrate both

CW and BW production capabilities into

apparently legitimate commercial

infrastructures, further concealing them

from scrutiny, and BW/CW programs will

be less reliant on foreign suppliers.

• Major advances in the biological

sciences and information technology

probably will accelerate the pace of

BW agent development, increasing

the potential for agents that are more

difficult to detect or to defend against.

Through 2020 some countries will

continue to try to develop chemical

agents designed to circumvent the
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Chemical Weapons Convention

verification regime.

“Developments in CW and BW

agents and the proliferation of

related expertise will pose a

substantial threat, particularly

from terrorists...”

Delivery Systems. Security will remain

at risk from increasingly advanced and

lethal ballistic and cruise missiles and

unmanned aerial vehicles (UAVs). States

almost certainly will continue to increase

the range, reliability, and accuracy of the

missile systems in their inventories. By

2020 several countries of concern

probably will have acquired Land-Attack

Cruise Missiles (LACMs) capable of

threatening the US Homeland if brought

closer to US shores. Both North Korea

and Iran probably will have an ICBM

capability well before 2020 and will be

working on improvements to enhance

such capabilities, although new regimes

in either country could rethink these

objectives. Several other countries are

likely to develop space launch vehicles

(SLVs) by 2020 to put domestic satellites

in orbit and to enhance national prestige.

An SLV is a key stepping-stone toward an

ICBM: it could be used as a booster in an

ICBM development.
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International Institutions in Crisis

Increased pressures on international institutions will incapacitate many, unless and until

they can be radically adapted to accommodate new actors and new priorities.

Regionally based institutions will be particularly challenged to meet the complex

transnational threats posed by economic upheavals, terrorism, organized crime, and

WMD proliferation. Such post-World War II creations as the United Nations and

international financial institutions risk sliding into obsolescence unless they take into

consideration the growing power of the rising powers.

• Both supporters and opponents of multilateralism agree that Rwanda, Bosnia, and

Somalia demonstrated the ineffectiveness, lack of preparation, and weaknesses of

global and regional institutions to deal with what are likely to be the more common

types of conflict in the future.

The problem of state failure—which is a source or incubator for a number of

transnational threats—argues for better coordination between institutions, including the

international financial ones and regional security bodies.

Building a global consensus on how and when to intervene is likely to be the biggest

hurdle to greater effectiveness but essential in many experts’ eyes if multilateral

institutions are to live up to their potential and promise. Many states, especially the

emerging powers, continue to worry about setting precedents for outside intervention

that can be used against them. Nevertheless, most problems, such as failing states,

can only be effectively dealt with through early recognition and preventive measures.

Other issues that are likely to emerge on the international agenda will add to the

pressures on the collective international order as well as on individual countries. These

“new” issues could become the staples of international diplomacy much as human rights

did in the 1970s and 1980s. Ethical issues linked to biotechnological discoveries such

as cloning, GMOs, and access to biomedicines could become the source of hot debates

among countries and regions. As technology increases the capabilities of states to

track terrorists, concerns about privacy and extraterritoriality may increasingly surface

among publics worldwide. Similarly, debates over environmental issues connected with

tempering climate change risk scrambling the international order, pitting the US against

its traditional European allies, as well as developed countries against the developing

world, unless more global cooperation is achieved. Rising powers may see in the

ethical and environmental debates an attempt by the rich countries to slow down their

progress by imposing “Western” standards or values. Institutional reform might

increasingly surface as an issue. Many in the developing world believe power in

international bodies is too much a snapshot of the post-World War II world rather than

the current one.
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The Rules of War: Entering “No Man’s Land”

With most armed conflict taking unconventional or irregular forms—such as

humanitarian interventions and operations designed to root out terrorist home bases—

rather than conventional state-to-state warfare, the principles covering resort to, and

use of, military force will increasingly be called into question. Both the international law

enshrining territorial sovereignty and the Geneva Conventions governing the conduct of

war were developed before transnational security threats like those of the twenty-first

century were envisioned.

In the late 1990s, the outcry over former Serbian President Milosevic’s treatment of

Kosovars spurred greater acceptance of the principle of international humanitarian

interventions, providing support to those in the “just war” tradition who have argued

since the founding of the UN and before that the international community has a “duty to

intervene” in order to prevent human rights atrocities. This principle, however,

continues to be vigorously contested by countries worried about harm to the principle of

national sovereignty.

The legal status and rights of prisoners taken during military operations and suspected

of involvement in terrorism will be a subject of controversy—as with many captured

during Operation ENDURING FREEDOM in Afghanistan. A debate over the degree to

which religious leaders and others who are perceived as abetting or inciting violence

should be considered international terrorists is also likely to come to the fore.

The Iraq war has raised questions about what kind of status, if any, to accord to the

increasing number of contractors used by the US military to provide security, man POW

detention centers, and interrogate POWs or detainees.

Protection for nongovernmental organizations (NGOs) in conflict situations is another

issue that has become more complicated as some charitable work—such as Wahabi

missionaries funding terrorist causes—has received criticism and enforcement action at

the same time that Western and other NGOs have become “soft targets” in conflict

situations.

The role of the United States in trying to set norms is itself an issue and probably will

complicate efforts by the global community to come to an agreement on a new set of

rules. Containing and limiting the scale and savagery of conflicts will be aggravated by

the absence of clear rules.
104

“Such post-World War II

creations as the UN and

international financial

institutions risk sliding into

obsolescence unless they take

into consideration the growing

power of the developing world.”

Post-Combat Environments Pose the

Biggest Challenge

For the United States particularly, if the

past decades are any guide waging and

winning a conventional war is unlikely to

be much of a challenge over the next 15

years in light of our overarching

capabilities to conduct such a war.

However, the international community’s

efforts to prevent outbreaks and ensure

that conflicts are not a prelude to new

ones could remain elusive.

• Nation-building is at best an

imperfect concept, but more so with

the growing importance of cultural,

ethnic, and religious identities.

• Africa’s effort to build a regional

peacekeeping force shows some

promise, but Sub-Saharan Africa will

struggle with attracting sufficient

resources and political will.

• The enormous costs in resources

and time for meaningful nationbuilding or post-conflict/failed state

stability operations are likely to be a

serious constraint on such coalition

or international commitments.

Fictional Scenario: Cycle of 

Fear 

This scenario explores what might

happen if proliferation concerns

increased to the point that largescale intrusive security measures

were taken. In such a world,

proliferators—such as illegal arms

merchants—might find it

increasingly hard to operate, but at

the same time, with the spread of

WMD, more countries might want to

arm themselves for their own

protection. This scenario is depicted

in a series of text-message exchanges

between two arms dealers. One is

ideologically committed to leveling

the playing field and ensuring the

Muslim world has its share of WMD,

while the other is strictly for hire.

Neither knows for sure who is at the

end of his chain—a government

client or terrorist front. As the

scenario progresses, the cycle of fear

originating with WMD-laden

terrorist attacks has gotten out of

hand—to the benefit of the arms

dealers, who appear to be engaged in

lucrative deals. However, fear begets

fear. The draconian measures

increasingly implemented by

governments to stem proliferation

and guard against terrorism also

have the arms dealers beginning to

run scared. In all of this,

globalization may be the real victim.
Marco contacted me 

already. It's going to be difficult.

You're kidding. U're in one of the poorest countries 

How? In procuring it? No. Moving it. Too 

many eyes on me. 

And to get back at the Crusaders?

How do you know you didn't help the terrorists?

Can't know for certain, but I think my ultimate client's different.

Yeah I know you're committed. I'm in it for the money. Doesn't matter too much who pays just so long as they do.

Yeah, went overboard. Still I worry. Lots of people sympathize, worry even in Muslim world. America also had its share of the real thing. A big hit happened before hoof and mouth. That new Patriot Act went way beyond anything imagined after 9/11.

I worry about the chip.

You'r telling me. Dubai was so civilized, but now it's impossible to operate there. 

I want my people and faith to be respected. The bomb's important.

Don't be so sure. America's got a lot of support 'cause of the terrorists. People also leery of attacks, especially bw.

Yeah they really got the superpower on the run. Even when it isn't WMD, they think it is. Regular hoof and mouth, I heard. Hard to tell the difference at first.

aler B (gold phone) 

rns that the tide of 

ernational public 

nion may be turning 

favor of stronger unter-proliferation 

cause of the terrorist acks.

. . . and are finding conducting business increasingly difficult.

Dealer A (green phone) seems to think he is working for a country. The material he is interested in could be nuclear technology. However, he intimates that terrorists are also interested in doing business with him.

Both dealers indicate they are increasingly worried about new devices that can track them.
But maybe not as 

many as they think, if you know what I mean.

Yeah, but that's not bad for business

Which business? I've got several to tend to.

Lots of countries want an insurance policy.

Big brother and some of the smaller fry.

Against big brother. What do you mean? My client's scared 

s------- about the terrorists and their capabilities.

. . . or they run them.

Sa'id contacted you? Yeah. No relation to 

marco, of course.

Conversation breaks off at this point.

A month later. Dealer A (in black) again talks to Dealer B (in blue). Marco, the in-between mentioned in last month's conversation, has changed aliases and is now known as Sa'id, which may or may not be his real name. The dealer's quip about there being no relation is an obvious inside joke. The first dealer also reverts to his theme that the downturn in the world economy has been a boon to the illegal business. Legitimate businesses are now turning a blind eye and selling dual-use technology even when they have doubts about the end user. Dealers have also changed devices, which are shown in new colors. 

D-- well better not, but I don't beleive what those guys claim about protecting privacy. Too much has happened. martial law. Talk of preemption, special measures. Those operations last year wrapped up a big chain.

You can't trust the Americans, and they have friends in the world to help them.

Dealer A (in green ) goes back to explaining why the increased terrorist attacks have also increased government interest in WMD programs.

Dealer A (in green) looks on the bright side. With the world slipping into a recession because of the terrorist attacks and the severe clampdown, he thinks he can get legitimate businesses to look the other way. 
Yeah but they traced it back from the subsidiary. Got some help in other country. Have to be extremely careful these days. They get confused by our names. Can't keep up-marco, sa'id, muhammed. Just don't have an ear for it. 

It is not clear if text messaging has failed to go through, Dealer B has gone underground or been swept up by a security roundup. One would hope Dealer A is now getting nervous. 

I'd say witting, but with plausible deniability. 

Witting or unwitting?

Makes the corporate world an easy target. 

Got the stuff through?

his would indicate that 

uthorities inside some 

ountries remain helpful 

espite the clampdown r outward cooperation 

with the United States.

One month later

Dealer A (in black) is no doubt being intentionally cryptic about the material for fear of interception. It may have something to do with nuclear technology or possibly other illicit goods.

Are u there? Where are u?

"Lessons Learned"

·The fear cycle generated by an increasing spread of WMD and terrorist attacks, once under way, would be one of the hardest to break. The greater sense of insecurity might prompt more countries to acquire WMD for protection or deterrence. 

·A complication in combating the spread of WMD would be the ideological factor, as exemplified by one of the dealers in the scenario story. Some dealers would not be in it for the money but to level the playing field between the Muslim world and the

 West. 

·Achieving a balance so that international commerce was not obstructed by excessive security would be important since any economic meltdown could spur legitimate businesses and scientists to engage in a highly lucrative, albeit illegal activity. 

·Developing and sustaining international cooperation when the fear cycle might drive some to go it alone would be a challenge.

 
111

Policy Implications

The international order will be in greater

flux in the period out to 2020 than at any

point since the end of the Second World

War. As we map the future, the

prospects for global prosperity and the

limited likelihood of great power conflict

provide an overall favorable environment

for coping with the challenges ahead.

Despite daunting challenges, the United

States, in particular, will be better

positioned than most countries to adapt to

the changing global environment.

As our scenarios illustrate, we see

several ways in which major global

changes could begin to take shape and

be buffeted or bolstered by the forces of

change over the next 15 years. In a

sense, the scenarios provide us with four

different lenses on future developments,

underlining the wide range of factors,

discontinuities, and uncertainties shaping

a new global order. One lens is the

globalized economy, another is the

security role played by the US, a third is

the role of social and religious identity,

and a fourth is the breakdown of the

international order because of growing

insecurity. They highlight various

“switching points” that could shift

developments onto one path or the other.

The most important tipping points include

the impact of robust economic growth and

the spread of technology; the nature and

extent of terrorism; the resiliency or

weakness of states, particularly in the

Middle East, Central Asia, and Africa; and

the potential spread of conflict, including

between states.

• On balance, for example, as the

hypothetical Davos World scenario

shows, robust economic growth

probably will help to overcome

divisions and pull more regions and

countries into a new global order.

However, the rapid changes might

also produce disorder at times; one of

the lessons of that and the other

scenarios is the need for management

to ensure globalization does not go off

the rails.

The evolving framework of international

politics in all the scenarios suggests that

nonstate actors will continue to assume

a more prominent role even though they

will not displace the nation-state. Such

actors range from terrorists, who will

remain a threat to global security, to

NGOs and global firms, which exemplify

largely positive forces by spreading

technology, promoting social and

economic progress, and providing

humanitarian assistance.

The United States and other countries

throughout the world will continue to be

vulnerable to international terrorism.

As we have noted in the Cycle of Fear

scenario, terrorist campaigns that

escalate to unprecedented heights,

particularly if they involve WMD, are one

of the few developments that could

threaten globalization.

Counterterrorism efforts in the years

ahead—against a more diverse set of

terrorists who are connected more by

ideology and technology than by

geography—will be a more elusive

challenge than focusing on a relatively

centralized organization such as

al-Qa’ida. The looser the connections
112

Is the United States’ Technological Prowess at Risk?

US investment in basic research and the innovative application of technology has

directly contributed to US leadership in economic and military power during the postWorld War II era. Americans, for example, invented and commercialized the

semiconductor, the personal computer, and the Internet with other countries following

the US lead.a While the United States is still the present leader, there are signs this

leadership is at risk.

The number of US engineering graduates peaked in 1985 and is presently down 20

percent from that level; the percentage of US undergraduates taking engineering is the

second lowest of all developed countries. China graduates approximately three times

as many engineering students as the United States. However, post-9/11 security

concerns have made it harder to attract incoming foreign students and, in some cases,

foreign nationals available to work for US firms.b Non-US universities—for which a US

visa is not required—are attempting to exploit the situation and bolster their strength.

Privately funded industrial research and development—which accounts for 60 percent of

the US total—while up this year, suffered three previous years of decline.c Further,

major multinational corporations are establishing corporate “research centers” outside of

the United States.

While these signs are ominous, the integrating character of globalization and the

inherent strengths of the US economic system preclude a quick judgment of an

impending US technological demise. By recent assessments, the United States is still

the most competitive society in the world among major economies.d In a globalized

world where information is rapidly shared—including cross-border sharing done

internally by multinational corporations—the creator of new science or technology may

not necessarily be the beneficiary in the marketplace.

a “Is America Losing Its Edge? Innovation in a Globalized World.” Adam Segal, Foreign Affairs, November

December 2004; New York, NY p.2.

b “Observations on S&T Trends and Their Potential Impact on Our Future.” William Wulf (President, National

Academy of Engineering). Paper submitted to the Center for Strategic and International Studies (CSIS) in support

of the National Intelligence Council 2020 Study, Summer 2004.

c “Is America Losing Its Edge?,” p.3. d Global Competitiveness Report 2004-2005, World Economic Forum, http://www.weforum.org. October 2004.
113

among individual terrorists and various

cells, the more difficult it will be to

uncover and disrupt terrorist plotting.

• One of our scenarios—Pax

Americana—envisages a case in

which US and European consensus

on fighting terrorism would grow much

stronger but, under other scenarios,

including the hypothetical New

Caliphate, US, Russian, Chinese and

European interests diverge, possibly

limiting cooperation on

counterterrorism.

“The US will have to battle world

public opinion, which has

dramatically shifted since the end

of the Cold War.”

The success of the US-led global

counterterrorism campaign will hinge on

the capabilities and resolve of individual

countries to fight terrorism on their own

soil. Efforts by Washington to bolster the

capabilities of local security forces in

other countries and to work with them on

their priority issues (such as soaring

crime) would be likely to increase

cooperation.

• Defense of the US Homeland will

begin overseas. As it becomes more

difficult for terrorists to enter the

United States, they are likely to try to

attack the Homeland from neighboring

countries.

A counterterrorism strategy that

approaches the problem on multiple

fronts offers the greatest chance of

containing—and ultimately reducing—the

terrorist threat. The development of more

open political systems, broader economic

opportunities, and empowerment of

Muslim reformers would be viewed

positively by the broad Muslim

communities who do not support the

radical agenda of Islamic extremists. A

New Caliphate scenario dramatizes the

challenge of addressing the underlying

causes of extremist violence, not just its

manifest actions.

• The Middle East is unlikely to be the

only battleground in which this

struggle between extremists and

reformers occurs. European and

other Muslims outside the Middle East

have played an important role in the

internal ideological conflicts, and the

degree to which Muslim minorities feel

integrated in European societies is

likely to have a bearing on whether

they see a clash of civilizations as

inevitable or not. Southeast Asia also

has been increasingly a theater for

terrorism.

Related to the terrorist threat is the

problem of the proliferation of WMD and

the potential for countries to have

increased motivation to acquire nuclear

weapons if their neighbors and regional

rivals are doing so. As illustrated in the

Cycle of Fear scenario, global efforts to

erect greater barriers to the spread of

WMD and to dissuade any other

countries from seeking nuclear arms or

other WMD as protection will continue to

be a challenge. As various of our

scenarios underline, the communications

revolution gives proliferators a certain

advantage in striking deals with each

other and eluding the authorities, and the

“assistance” they provide can cut years

off the time it would take for countries to

develop nuclear weapons.
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How the World Sees the United States

In the six regional conferences that we hosted we asked participants about their views of the

role of the United States as a driver in shaping developments in their regions and globally.

Asia

Participants felt that US preoccupation with the war on terrorism is largely irrelevant to the

security concerns of most Asians. The key question that the United States needs to ask itself is

whether it can offer Asian states an appealing vision of regional security and order that will rival

and perhaps exceed that offered by China.

US disengagement from what matters to US Asian allies would increase the likelihood that they

would climb on Beijing’s bandwagon and allow China to create its own regional security order

that excludes the United States.

Participants felt that the rise of China need not be incompatible with a US-led international

order. The critical question is whether or not the order is flexible enough to adjust to a changing

distribution of power on a global level. An inflexible order would increase the likelihood of

political conflict between emerging powers and the United States. If the order is flexible, it may

be possible to forge an accommodation with rising powers and strengthen the order in the

process.

Sub-Saharan Africa

Sub-Saharan African leaders worry that the United States and other advantaged countries will

“pull up the drawbridge” and abandon the region.

Participants opined that the United States and other Western countries may not continue to

accept Africa’s most successful “export,” its people. The new African diaspora is composed

overwhelmingly of economic migrants rather than political migrants as in previous eras.

Some participants felt that Africans worry that Western countries will see some African countries

as “hopeless” over the next 15 years because of prevailing economic conditions, ecological

problems, and political circumstances.

Participants feared that the United States will focus only on those African countries that are

successful.

Latin America

Conference participants acknowledged that the United States is the key economic, political, and

military player in the hemisphere. At the same time, Washington was viewed as traditionally not

paying sustained attention to the region and, instead of responding to systemic problems, as

reacting primarily to crises. Participants saw a fundamentalist trend in Washington that would

lead to isolation and unilateralism and undercut cooperation. Most shared the view that the US

“war on terrorism” had little to do with Latin America’s security concerns.

Latin American migrants are a stabilizing force in relations with the United States. An important

part of the US labor pool, migrants also remit home needed dollars along with new views on

democratic governance and individual initiative that will have a positive impact on the region.

(Continued on next page...)
115

(Continued...) How the World Sees the United States

US policies also can have a positive impact. Some participants said the region would benefit

from US application of regional mechanisms to resolve problems rather than punitive measures

against regimes not to its liking, such as that of Fidel Castro.

Middle East

Participants felt that the role of US foreign policy in the region will continue to be crucial. The

perceived propping up of corrupt regimes by the United States in exchange for secure oil

sources has in itself helped to promote continued stagnation. Disengagement is highly unlikely

but would in itself have an incalculable effect.

Regarding the prospects for democracy in the region, participants felt that the West placed too

much emphasis on the holding of elections, which, while important, is only one element of the

democratization process. There was general agreement that if the United States and Europe

can engage with and encourage reformers rather than confront and hector, genuine democracy

would be achieved sooner.

Some Middle East experts argued that Washington has reinforced zero-sum politics in the

region by focusing on top Arab rulers and not cultivating ties with emerging leaders in and

outside the government.

Although the Middle East has a lot to gain economically from globalization, it was agreed that

Arabs/Muslims are nervous that certain aspects of globalization, especially the pervasive

influence of Western, particularly American, values and morality are a threat to traditional

cultural and religious values.

Europe and Eurasia

Participants engaged in a lively debate over whether a rift between the US and Europe is likely

to occur over the next 15 years with some contending that a collapse of the US-EU partnership

would occur as part of the collapse of the international system. Several participants contended

that if the United States shifts its focus to Asia, the EU-US relationship could be strained to the

breaking point.

• They were divided over whether China’s rise would draw the United States and Europe

closer or not.

• They also differed over the importance of common economic, environmental, and energy

problems to the alliance.

In our Eurasia workshop, participants agreed that the United States has only limited influence

on the domestic policies of the Central Asian states, although US success or failure in Iraq

would have spillover effects in Central Asia. Countries in western Eurasia, they believed, will

continue to seek a balance between Russia and the West. In their view, Ukraine almost

certainly will continue to seek admission to NATO and the European Union while Georgia and

Moldova probably will maintain their orientation in the same direction.
116

“A counterterrorism strategy that

approaches the problem on multiple

fronts offers the greatest chance of

containing—and ultimately

reducing—the terrorist threat.”

On the more positive side, one of the

likely features of the next 15 years is the

greater availability of high technology,

not only to those who invent it. As we try

to make clear in our Davos World

scenario, the high-tech leaders are not

the only ones that can expect to make

gains, but also those societies that

integrate and apply the new technologies.

For example, our scenario points up the

beneficial effects of possible new

technologies in Africa in helping to

eradicate poverty. As we have noted

elsewhere in this paper, global firms will

play a key role in promoting more

widespread prosperity and more

technological innovation.

The dramatically altered geopolitical

landscape also presents a huge

challenge for the international system as

well as for the United States, which has

been the security guarantor of the postWorld War II order. The possible

contours as several trends develop—

including rising powers in Asia,

retrenchment in Eurasia, a roiling Middle

East, and greater divisions in the

transatlantic partnership—remain

uncertain and variable.

• With the lessening in ties formed

during the Cold War, nontraditional

ad hoc alliances are likely to develop.

For example, shared interest in

multilateralism as a cornerstone of

international relations has been

viewed by some scholars as the basis

for a budding relationship between

Europe and China.

As the Pax Americana scenario

suggests, the transatlantic partnership

would be a key factor in Washington’s

ability to remain the central pivot in

international politics. The degree to

which Europe is ready to shoulder more

international responsibilities is unclear

and depends on its ability to surmount its

economic and demographic problems as

well as forge a strategic vision for its role

in the world. In other respects—GDP,

crossroads location, stable governments,

and collective military expenditures—it

has the ability to increase its weight on

the international stage.

“For Washington, dealing with a

rising Asia may be the most

challenging of all its regional

relationships.”

Asia is particularly important as an

engine for change over the next 15 years.

A key uncertainty is whether the rise of

China and India will occur smoothly. A

number of issues will be in play, including

the future of the world trading system,

advances in technology, and the shape

and scope of globalization. For

Washington, dealing with a rising Asia

may be the most challenging of all its

regional relationships. One could

envisage a range of possibilities from the

US enhancing its role as regional

balancer between contending forces to

Washington being seen as increasingly

irrelevant. Both the Korea and Taiwan

issues are likely to come to a head, and

how they are dealt with will be important

factors shaping future US-Asia ties as

well as the US role in the region. Japan’s
117

position in the region is also likely to be

transformed as it faces the challenge of a

more independent security role.

“A key uncertainty is whether the

rise of China and India will occur

smoothly.”

With the rise of the Asian giants, US

economic and technological

advantages may be vulnerable to

erosion.

• While interdependencies will grow,

increased Asian investment in hightech research coupled with the rapid

growth of Asian markets will increase

the region’s competitiveness across a

wide range of economic and technical

activity.

• US dependence on foreign oil

supplies also makes it more

vulnerable as the competition for

secure access grows and the risks of

supply-side disruptions increase.

In the Middle East, market reforms,

greater democracy, and progress toward

an Arab-Israeli peace would stem the

shift towards more radical politics in the

region and foster greater accord in the

transatlantic partnership. Some of our

scenarios highlight the extent to which the

Middle East could remain at the center of

an arc of instability extending from Africa

through Central and Southeast Asia,

providing fertile ground for terrorism and

the proliferation of WMD.

Realization of a Caliphate-like scenario

would pose the biggest challenge

because it would reject the foundations

on which the current international system

has been built. Such a possibility points

up the need to find ways to engage and

integrate those societies and regions that

feel themselves left behind or reject

elements of the globalization process.

Providing economic opportunities alone

may not be sufficient to enable the “havenots” to benefit from globalization; rather,

the widespread trend toward religious and

cultural identification suggests that

various identities apart from the nationstate will need to be accommodated in a

globalized world.

The interdependence that results from

globalization places increasing

importance not only on maintaining

stability in the areas of the world that

drive the global economy, where about

two thirds of the world’s population

resides, but also on helping the poor or

failing states scattered across a large

portion of the world’s surface which have

yet to modernize and connect with the

larger, globalizing community. Two of our

scenarios—Pax Americana and Davos

World—point up the different roles that

the United States is expected to play as

security provider and as a financial

stabilizer.

Eurasia, especially Central Asia and the

Caucasus, probably will be an area of

growing concern, with its large number of

potentially failing states, radicalism in the

form of Islamic extremism, and

importance as a supplier or conveyor belt

for energy supplies to both West and

East. The trajectories of these Eurasian

states will be affected by external powers

such as Russia, Europe, China, India and

the United States, which may be able to

act as stabilizers. Russia is likely to be

particularly active in trying to prevent

spillover, even though it has enormous

internal problems on its own plate.

Farther to the West, Ukraine, Belarus,

and Moldova could offset their
118

vulnerabilities as relatively new states by

closer association with Europe and the

EU.

Parts of Africa share a similar profile with

the weak states of Eurasia and will

continue to form part of an extended arc

of instability. As the hypothetical Davos

World scenario suggests, globalization in

terms of rising commodity prices and

expanded economic growth may be a

godsend where good governance is also

put in place. North Africa may benefit

particularly from growing ties with Europe.

Latin America is likely to become a more

diverse set of countries: those that

manage to exploit the opportunities

provided by globalization will prosper,

while those—such as the Andean nations

currently—that do not or cannot will be

left behind. Governance and

leadership—often a wild card—will

distinguish societies that prosper from

those that remain ill-equipped to adapt.

Both regions may have success stories—

countries like Brazil or South Africa—

which can provide a model for others to

follow. The United States is uniquely

positioned to facilitate Latin America

growth and integration stemming the

potential for fragmentation.

In that vein, the number of interstate and

internal conflicts has been ebbing, but

their lethality and potential to grow in

impact once they start is a trend we have

noted.

• While no single country looks within

striking distance of rivaling US military

power by 2020, more countries will be

in a position to contest the United

States in their regions. The

possession of chemical, biological,

and/or nuclear weapons by more

countries by 2020 would increase the

potential cost of any military action by

the United States and its coalition

partners.

• Most US adversaries, be they states

or nonstate actors, will recognize the

military superiority of the United

States. Rather than acquiesce to US

force, they will try to circumvent or

minimize US strengths and exploit

perceived weaknesses, using

asymmetric strategies, including

terrorism and illicit acquisition of

WMD, as illustrated in the Cycle of

Fear scenario.

“...no single country looks within

striking distance of rivaling US

military power by 2020.”

As our Pax Americana scenario

dramatizes, the United States probably

will continue to be called on to help

manage such conflicts as Palestine,

North Korea, Taiwan, and Kashmir to

ensure they do not get out of hand if a

peace settlement cannot be reached.

However, the scenarios and trends we

analyze in the paper suggest the

challenge will be to harness the power of

new players to contribute to global

security, potentially relieving the United

States of some of the burden. Such a

shift could usher in a new phase in

international politics.

• China’s and, to a lesser extent, India’s

increasing military spending and

investment plans suggest they might

be more able to undertake a larger

security burden.

• International and regional institutions

also would need to be reformed to
119

meet the challenges and shoulder

more of the burden.

Adapting the international order may also

be increasingly challenging because of

the growing number of other ethical

issues that have the potential to divide

worldwide publics. These issues include

the environment and climate change,

cloning and stem cell research, potential

biotechnology and IT intrusions into

privacy, human rights, international law

regarding conflict, and the role of

multilateral institutions.

Many ethical issues, which will become

more salient, cut across traditional

alliances or groupings that were

established to deal mainly with security

issues. Such divergent interests

underline the challenge for the

international community, including the

United States, in having to deal with

multiple, competing coalitions to achieve

resolution of some of these issues.

• Whatever its eventual impact or

success, the Kyoto climate change

treaty exemplifies how formerly

nontraditional policy issues can come

to the fore and form the core of

budding new networks or

partnerships.

• The media explosion cuts both ways:

on the one hand, it makes it potentially

harder to build a consensus because

the media tends to magnify

differences; on the other hand, the

media can also facilitate discussions

and consensus-building.

The United States will have to battle

world public opinion, which has

dramatically shifted since the end of the

Cold War. Although some of the current

anti-Americanism13 is likely to lessen as

globalization takes on more of a nonWestern face, the younger generation of

leaders—unlike during the post-World

War II period—has no personal

recollection of the United States as its

“liberator.” Thus, younger leaders are

more likely than their predecessors to

diverge with Washington’s thinking on a

range of issues.

Finally, as the Pax Americana scenario

suggests, the United States may be

increasingly confronted with the challenge

of managing—at an acceptable cost to

itself—relations with Europe, Asia, the

Middle East and others, absent a single

overarching threat on which to build

consensus. For all the challenges ahead,

the United States will nevertheless retain

enormous advantages, playing a pivotal

role across the broad range of issues—

economic, technological, political, and

military—that no other state can or will

match by 2020. Even as the existing

order is threatened, the United States will

have many opportunities to fashion a new

one.

13 The Pew Research survey of attitudes around the

world revealed sharply rising anti-Americanism,

especially in the Muslim world, but it also found that

people in Muslim countries place a high value on such

democratic values as freedom of expression, freedom

of the press, multiparty political systems, and equal

treatment under the law. Large majorities in almost

every Muslim country favor free market economic

systems and believe that Western-style democracy can

work in their own country.
120