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U.S. Intelligence Agencies See a Different World in 2030

December 10, 2012

U.S. Intelligence Agencies Predict a Transformed World

A pond is dried up due to an El Nino-induced drought, in Jones, Isabela province, the Philippines. Photographer: Nana Buxani/Bloomberg

New technologies, dwindling resources and explosive population growth in the next 18 years will alter the global balance of power and trigger radical economic and political changes at a speed unprecedented in modern history, says a new report by the U.S. intelligence community.

The 140-page report released today by the National Intelligence Council lays out dangers and opportunities for nations, economies, investors, political systems and leaders due to four “megatrends” that government intelligence analysts say are transforming the world.

Those major trends are the end of U.S. global dominance, the rising power of individuals against states, a rising middle class whose demands challenge governments, and a Gordian knot of water, food and energy shortages, according to the analysts.

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“We are at a critical juncture in human history, which could lead to widely contrasting futures,” Council Chairman Christopher Kojm writes in the report.

Leading the list of the “game-changers” -- factors the report says will shape the impact of the megatrends -- is the “crisis-prone” global economy, which is vulnerable to international shocks and to disparities among national economies moving at significantly different speeds.

The future is “malleable,” according to Kojm. “Our effort is to encourage decision-makers, whether in government or outside, to think and plan for the long term so that negative futures do not occur and positive ones have a better chance of unfolding.”

‘Tectonic Shifts’

The report reflects the consensus judgments of all 16 U.S. intelligence agencies, who consulted or contracted with academics, research institutes, political leaders and corporations in 14 countries and the European Union.

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While technological advances, migrations, wars and other factors drove change in earlier periods, what sets the next quarter century apart is the way seven “tectonic shifts” are combining to drive change at an accelerating rate, said NIC Counselor Mathew Burrows, the report’s principle author. Those factors are: the growth of the middle class, wider access to new technologies, shifting economic power, aging populations, urbanization, growing demand for food and water, and U.S. energy independence

“It’s hard to wrap your mind around it, to tell you the truth; it’s just been happening at great velocity,” Burrows said in an interview with Bloomberg News discussing the 18-month research project.

‘Black Swans’

That velocity is a function of several mutually reinforcing dynamics, the report found. One is what the report calls a “definitive shift of economic power to the East and South” as the U.S., European and Japanese share of global income is projected to fall from 56 percent today to well under half by 2030.

The report envisions an international economy that remains prone to potential “black swans” such as the collapse of the euro and the European Union, a pandemic, a Chinese economic collapse, a nuclear war or a debilitating cyberattack.

Even absent such events, it says: “A return to pre-2008 growth rates and previous patterns of rapid globalization looks increasingly unlikely, at least for the next decade,” in part because total non-financial debt across G-7 countries has doubled since 1980 to 300 percent of GDP.

Population Growth

The key question, the report says, is whether divergent growth rates and increased volatility “will result in a global economic breakdown or whether the development of multiple growth centers will lead to resiliency.”

A world population that’s projected to rise to 8.3 billion from 7.1 billion today by 2030 will add to the strains, the report says. More people will join the middle class, especially in the developing world, and even conservative estimates forecast the global middle class doubling to more than 2 billion in 18 years.

The education sector will both drive and benefit from this growth in the middle class, the report projects, and economic success will be closely tied to educational levels. In the Middle East and North Africa, average levels of schooling are expected to rise from 7.1 years to 8.7 years. Education for women -- a driver of both economic growth and social health and welfare -- will rise from 5 years to 7 years in the region, according to the report.

Cities Grow

Much of this growing middle class will flock to cities, increasing the world’s urban population from roughly 50 percent of the world’s total to nearly 60 percent by 2030. Rising incomes will fuel their appetite for food -- especially protein from meat and fish -- water and energy, which will be in shorter supply, the report says, in part because climate change and water shortages will alter patterns of arable land and greater demand for energy could curb the amount of fuel available to make fertilizers and other products.

Demand for food will rise 35 percent by 2030 as global gains in agricultural productivity decline, the report says. Worldwide water requirements will reach 6,900 billion cubic meters in 2030, 40 percent more than current sustainable water supplies, making water a likely cause of regional conflicts, particularly in South Asia and the Middle East, the report says.

Climate Change

Climate change will complicate resource management, particularly in Asia, where monsoons are crucial to the growing season and decreased rainfall could disrupt the region’s ability to feed its growing population.

Changes in temperature and precipitation patterns are happening faster than expected, Burrows said. When his researchers updated their section on climate change, the new figures showed the rate of change was even greater than it was 18 months before, when they started the project.

New communications technologies and expanding educational opportunities, meanwhile, will empower the growing middle classes to make greater demands on their governments for services, a scenario that’s already part of the Arab Spring movements in countries such as Egypt.

“You have a huge problem on the resource side,” Burrows said. “How do you manage all this prosperity that is putting a lot of strain on the resources?”

‘Bad Scenario’

The solution to resource shortages will have to be public and private sector cooperation, Burrows said. “You have to have collaboration on the technology, you have to have a big energy or water project the world is really geared up for, because otherwise it turns into a bad scenario,” he said.

At the same time, though, communications technology is shifting political power from nations “toward multifaceted and amorphous networks that will form to influence state and global actions,” the report says.

“Those nations with some of the strongest fundamentals -- GDP, population size, etc. -- will not be able to punch their weight unless they learn to operate in networks and coalitions in a multipolar world,” according to the report

The same technologies will also allow groups to to attack electrical grids or computer networks, Burrows said. While enormous caches of data eventually will enable governments to “figure out and predict what people are going to be doing” and “get more control over society,” he said, for now “the scales tip more in favor of the individual than the state.”

Asia Rising

At the same time, power will shift from North America and Europe to an Asia with GDP, population, military spending and technological investment that will surpass the West’s, the report projects.

China will surpass the U.S. economically a few years before 2030, and regional players such as Colombia, India, Nigeria and Turkey will become increasingly important to the global economy.

The U.S. role in this new world order is hard to predict because the degree to which it continues to dominate the international system could vary widely, the report says.

“The ’unipolar’ moment is over and Pax Americana -- the era of American ascendancy in international politics that began in 1945 -- is fast winding down,” the report says.

Despite that, the U.S. most likely will remain “first among equals” in 2030, the report says.

The U.S. will remain the only power “that can really orchestrate these coalitions, including non-state actors and state actors, to really manage, deal with these huge challenges and changes” the world faces, Burrows said.

While the report envisions the end of a unipolar world, and “the U.S. can’t dictate,” Burrows said, “you can’t see any other power out there that can organize it.”

To contact the reporter on this story: Nicole Gaouette in Washington at ngaouette@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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