Wednesday 19 February 2014

A FORECAST FOR THE 21ST CENTURY BY GEORGE FRIEDMAN


After the debris of the European power is cleared in the 20th century, as well as what is left of the Soviet Union, one power remains standing and overwhelming powerful. The power is USA.
USA is economically, militarily and physically the most powerful country in the world and there is no real challenger to that power.
For past 500years, Europe was center of international Systems, because they controlled the North Atlantic; the main highway to Europe and the entire world
However, in early 1980s, something remarkably happened for the first time in history; trans-pacific trade equaled trans-Atlantic trade.  With Europe reduced to a collection of secondary power after the World War II and shift in trade patterns, the control of North Atlantic was no longer key to controlling the world trade.


Whatever country that controlled both the North Atlantic and Pacific could control the world trade. In 21st century, the country located on both oceans would control the world global economy. This put USA at an advantage against any other country in the world.

Also given the cost of building naval power and cost of deploying it around the world would make the country with such potential the world leader i.e. USA in 21st century. The inherent power of USA coupled with its geographical position make the USA the pivotal actor of the 21st century. That certainly does not make the USA loved. On the contrary, its power makes it feared.
Therefore, the history of the 21st century will revolve around opposing struggles. One will be secondary powers forming coalitions to contain and control USA, and the USA actively preemptively to prevent an effective coalition from forming.

Islamic war is already ending. Russia is recreating its old sphere of influence and it will challenge the USA. It may be the last on the great Northern European plain but will be met by US dominated forces in three Baltic countries- Estonia, Latvia and Lithuania as well as Poland.
China is the next challenge to the US with a few disadvantages:

-          China is an isolated country physically. It has Siberia to its north, the Himalayas jungles to the eastern part of the country, so it’s not easy for China to expand

-          China has not been a major naval power for centuries and building a building a navy requires long time to build ships creates well experienced or trained sailors.

-          China is inherently unstable. Whenever it opens its border to the outside world, the coastal region becomes prosperous, but the vast majority of Chinese in the interior remain impoverished. This leads to tension, conflict and instability.

Powers that may emerge in the middle of the 21st century are;

JAPAN

The third largest economy in the world and most vulnerable, being highly dependent on importation of raw materials since it has almost none of its own. With history of militarism, Japan will not remain the marginal pacific power it has been.

TURKEY

Currently the 17th largest economy in the world. Most stable in the Arab region.

POLAND

Its economy is large and growing

There might be global war between these above three powers and the USA. Tremendous technical advances will come out of the war. All sides will be looking for new forms of energy to substitutes for hydro carbons for many obvious reasons. The need for solar power, economically the most efficient energy source on earth will increase.
Another major feature of the 21st century will be end of population explosion. In 2050, advanced economies would be losing population at a dramatic rate. By 2100, even under developing economies would have reached birth rates that will stabilize their population. The entire system of production will shift. This shift will force the countries into greater dependence on technology- robots will substitute for human labour and intensive genetic research to make people productive longer. This will create a major labour shortage in advance economies. They will design laws to encourage people from developing countries to their country i.e. USA will be inducing Mexicans to come over to USA. This will make Mexico which is presently 15th largest economy in the world to rise in its rankings and become an economy power.

USA IN 21ST CENTURY
Present Facts about USA

-          America constitutes just 4% of the world population but produces about 26% of all goods and services consume in the world.
       -          In 2007 USD GDP was about $14 trillion compared to world’s GDP of $54trillion  i.e. about 26% of the world economy actually takes place in USA.

 
      -          The next largest economy is China, with a GDP of $10.3trillion, about 71% of USA.

-          US economy is so huge that it’s larger than economies of the next four countries combined; Japan, India, Germany and Russia excluding China.

 -          People talk about USA declining auto/steel industry that was generation ago the mainstay of their economy. Yes some industries have moved overseas but at production of only $2.8trillion. USA is the largest in the world. Twice the size of third largest industrial power, Japan.

 -          There is talk of oil shortages- which exist and will doubtedly increase. However USA produces 8.3million barrel of oil daily in 2007 compare with Russia 9.7m, and 10.7m of Saudi Arabia. US oil production is 85% of Saudi oil.

 -          USA produces more than Iran, Kuwait or UAE. However, input of oil into USA is vast because of its industrial /consumption capacity. Natural gas – at 22.4trillion cubic feet. Russia is no 1 and USA no 2 with 18.7trillion cubic feet. US natural gas production is greater than that of next five producers combined.

 -          Though USA wholly dependent on foreign energy is also one of the world largest energy produces.

 -          Given the vast size of America economy, it is interesting to note that USA is still under populated by global standard. Measured in inhabitants per square kilometer, the world average population density is 49, Japan is 338, Germany 230 and America only 31. If we exclude Alaska which is largely inhabitable, US population density is about 34.

So America compared to Japan, or Germany is largely under populated. If we compare population in proportion to Arable land, i.e. land that is suitable for agriculture, US has five times as much land per person as Asia, twice as much as Europe and three times as much as the global average. An economy consists of land, labour and capital, in case of USA, the nation can still grow. There is plenty room to increase all the three.

Why Is US Economy so Powerful? 

Answer is military power and geographical reality as created economic reality.

-          USA Navy controls all the oceans of the world. Whether it is a junk in Southern China sea or shore of the African coast, a tanker in Persian Gulf, or a cabin cruiser in Caribbean, every ship in the world moves under the eyes of America satellites in space and its movement is guaranteed or denied at will by US Navy. The combined naval force of the rest of the world doesn’t come close to equaling that of US navy. This means that USA controls world international trade. It has become the foundation of American security and wealth.

 
-          The US-Soviet conflict known as the cold war was a global conflict. It was basically who will control Europe tattered empire after World War II. USA had inherent advantage. The Soviet Union has enormous but essentially land locked. USA is vast, but has vast access to the world’s ocean. Thus, with the collapse of Soviet originated the American sea power and also opened the door for US naval power to dominate the world. USA offer to most nation access to their international trade system and the right to sell into the America economy. Exclusion from this by any nation in the world would mean impoverishment, while inclusion means wealth.
US – JIHADIST WAR

From late seventies until fall of Soviet Union, US helped create forces in Afghanistan that could resist Soviet Union. These forces turned on USA once Soviet Union collapsed. Trained in covert arts, knowledge about process of USA intelligence, these men mounted an operation against USA that involved many stages and culminated in Sept 11, 2001.

USA is historically a war-like country. USA has been at war for about 10% of its existence. During the twentieth century, USA was at war about 15% of its existence. And since beginning of 21st century, since 2001, USA has been at war. War is central to America existence and its frequency is increasing. It’s built into American culture and deeply rooted in American geopolitics. USA was born out of war and has continued to fight to this day at an increasing pace.

USA emerged from the World War II, not only has the world largest navy but also with naval bases scattered all over the world. Any sea going vessel, commercial or military from Persian Gulf to the South China Sea to the Caribbean could be monitored by USA naval, who would chose to watch it, stop it, or sink it. The combined weight of all worlds existing fleet is insignificant compared to America naval power.

No one goes anywhere on the sea if USA doesn’t approve. US will continue to encourage chaos in the Islamic world, generating animosity toward America and perhaps terrorist who will attack them in future. The Middle East still fragmented than ever before. US defeat or stalemate in Iraq or Afghanistan is the likely outcome and both will appear to have ended badly for America. But on the broader level, that does not matter to USA as long as the Muslims are fighting each other; the USA has won its war. The present uprising in the Middle East is a big plus for America.

Anger does not make history. Power does and may be supplemented by anger, but it derives from more fundamental realities; geography, demographic, technology and culture. All of these will define America power just has America power will define the 21st century.

 POPULATION, COMPUTER AND CULTURE

The United States is socially imitated and politically condemned. It sits on the ideological fault line of international system. As population declines in the 21st century due to shift in reproductive patterns, the USA becomes the centre for rapidly redefined modes of social life. You can’t have a modern economy without computers and corporations, and if you are going to program computers, you need to know English; the language of computing. On one hand, those who want to resist the trend must actually avoid American model of life and thought. On the other hand, those who don’t adapt America ways can’t have a modern economy. This is what gives America its strength and continually frustrates critics. Falling population are restructuring the pattern of families and daily lives. Computers are transforming, simplifying and focusing the way people think. Corporations are constantly reorganizing the way we work. Between these three factors Love, reason and family lives daily are being transformed and through that transformation America is growing.

Old institutions have shattered but new ones have not yet emerged. The 21st century will be period in which a range of new institutions, moral system and practices will begin their first tentative emergence. Half of the 21st century will be marked by intense social conflict globally.

NEW FAULT LINES: Areas where conflict might arise in 21st century.

Pacific Basin –fastest growing in past half century. Two large economies dominate this region, Japan/China. They depend on this area for maritime trade, shipping goods to USA and Europe and importing raw materials from Persian Gulf and rest of pacific. An interruption on flow of activities in this axis will be catastrophic.

-          Japan, the third largest economy in the world, and only major industrial power to possess no major natural resources of any sort, imports all raw materials from oil to aluminum. China too, who greatly depends on imports because of its growth rate.

-          China sends almost one-quarter of its exports to USA

-          South Korea/Taiwan also depends on the pacific oceans for transport of goods and services.

US Navy controls the pacific, so they rely on the US for their economy well being.
EUROPE

 Europe is not an entity, in spite of existence of European Union, it consist of a series of sovereign nation states. Therefore in a geographical context, Europe has not become a unified transitional entity that might be a threat to USA.

 MUSLIM WORLD

The current crisis is been contained but the Islamic world overall remains unstable. We do not see any emergent of a regional global Muslim power because of the tension between these Muslim states.  Indonesia, the largest Muslim state in the world is in no position to assert itself. Same applies to Palestinian, second largest Muslim nation. They are internally divided and geographically they can’t expand because they are bracketed to west by Afghanistan, China and Persia to the North and India to the East.

Other major Muslim nations are Egypt with a population of N80m people, Turkey 71m and Iran 65m people. Out of the three, Turkey is a major force economically with the 17th largest economy in the world.

Iran is basically the smallest of the three but most aggressive. But it has its weakness; trying to protect his regime from USA, Sunni -Muslims, and anti- Iranian Arabs. Iran is not an Arab country. Geographically, Iran cannot expand because it has Afghanistan to East, Russia to the North or towards Iraq which he will be meet by USA forces.

Egypt is the largest country in Arab world but economically, Turkey is stronger and not located with multiple directions to which she can move it’s a modern world and located between Europe, Middle East and Russia.

MEXICO

With a population of about 114m in 2007 and forecast of 140m in 2050, Mexico is not a small country. As 15th largest economy in the world as at 2007, Mexico stands to be great in the next 21st century. Although it currently unstable, turn by drugs and cartels, It can overcome it chaos.

CHINA

One quarter of the world lives in China and there have been great talk about China being a global power.

My Views on China

China is an island not surrounded by water but by impassable terrain and waste lands that effectively isolate it from the rest of the world.

To the North are Siberia and Mongolia steppe 

-          Inhospitable and highly settled and difficult to transverse. To south west are the impossible Himalayas. The Southern border with Myanmar, Laos and Vietnam is covered by mountains and jungles and to the East by oceans. Only its western border with Kazakhstan can be travelled by large number of people. Vast majority of China lives 10000 miles of the coast populating the eastern part of the country by 1/3 while the other 2/3 been quite under populated.

 

-          China is historically not aggressive and only intermittently opens itself to the world.

 
       -          China is not truly a capitalist state because markets do not determine allocation. It allocates money politically and manipulates economic data.

 

-          Both China and Japan relies heavily on exports. Both have staggering growth rates but faces collapse when the growth rate begins even to barely slow. Japan bad debt rate in 1990 was about 20% of GDP. China is closer to 40% of GDP. Is new growth profitable?

 
CHINA POLITICAL CRISIS.

China is held together by money not ideology. When there is economic downturn and money stops flowing, not only will the banking system spasm, the entire fabric of Chinese society will slander. Loyalty in China is either bought or coerced.

Chinese regime rest in two pillars

1.      Vast bureaucracy that operates China.

2.      Military security complex that enforces the will of the state/communist party. The values of the communist party which is egalitarianism, selflessness, and service to the people, no longer exist.

Both Japan and China do not have the military might to confront the US.

Russia is a vast region with large population, but much power than the vast of Europe. It has two assets-land and natural resources.

In concluding, USA will still be the force to contend with in the 21st century.  

Table 1
TOP TEN WORLD ECONOMIC POWERS (GDP).
Countries
(Trillion USD)
USA
$14.60
CHINA
$10.30
JAPAN
$4.30
INDIA
$4
GERMANY
$2.90
RUSSIA
$2
BRAZIL
$2.10
UK
$2.10
FRANCE
$2.10
ITALY
$1.70

 

Table II
 
 
TOP FIVE MILITARY WORLD POWERS
 
Countries
Defense Budget
Military Personnel
 AirForce Planes
Naval ships
 
(Billion)
(People)
 
USA
$515
1.3m
22,700
700
 
CHINA
$60
2.2m
2,400
760
 
RUSSIA
$43
1.2m
6000
500
 
INDIA
$33
13.m
1200
145
 
UK
$53
195,000
2600
140

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