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01/18/2001

Global Trends, Part II

Continuing with our discussion of the future, as defined by the
National Intelligence Council''s report titled "Global Trends
2015," we''ll focus on issues affecting the world economy.

But first, following are some conclusions that the CIA-sponsored
document reached with regards to science and technology.

While advances in S&T will improve the quality of life across
many different spectrums, there will obviously be problems from
a security standpoint.

"Increasing reliance on computer networks is making critical
U.S. infrastructures more attractive as targets. Computer
network operations today offer new options for attacking the
United States within its traditional continental sanctuary -
potentially anonymously and with selective effects.
Nevertheless, we do not know how quickly or effectively such
adversaries as terrorists or disaffected states will develop the
tradecraft to use cyber warfare tools and technology, or, in fact,
whether cyber warfare will ever evolve into a decisive combat
arm.

"Rapid advances and diffusion of biotechnology, nano-
technology, and the materials sciences, moreover, will add to the
capabilities of our adversaries to engage in biological warfare or
bioterrorism."

The Global Economy / Hot Spots

"While the outlook for the global economy appears strong..."

U.S. - "Given its large trade deficit and low domestic savings,
the U.S. economy - the most important driver of recent global
growth - is vulnerable to a loss of international confidence in its
growth prospects that could lead to a sharp downturn, which, if
long lasting, would have deleterious economic and policy
consequences for the rest of the world."

Europe and Japan - Their populations are aging rapidly,
"requiring more than 110 million new workers by 2015 to
maintain current dependency ratios between the working
population and retirees. Conflicts over social services or
immigration policies in major European states could dampen
economic growth." This is an understatement.

In addition, the first uncertainty about Japan "is whether it will
carry out the structural reforms needed to resume robust
economic growth and to slow its decline relative to the rest of
East Asia, particularly China. The second uncertainty is whether
Japan will alter its security policy to allow Tokyo to maintain a
stronger military and more reciprocal relationship with the
United States."

China - "Ambitious goals for reforming its economy will be
difficult to achieve: restructuring state-owned enterprises,
cleaning up and transforming the banking system, and cutting the
government''s employment rolls in half. Growth would slow if
these reforms go off-track."

But, "China has proven politically resilient, economically
dynamic, and increasingly assertive in positioning itself for a
leadership role in East Asia. (However) its long-term military
program in particular suggests that Beijing wants to have the
capability to achieve its territorial objectives, outmatch its
neighbors, and constrain U.S. power in the region."

"Two conditions, in the view of many specialists, would lead to a
major security challenge for the U.S. and its allies in the region:
a weak, disintegrating China, or an assertive China willing to use
its growing economic wealth and military capabilities to pursue
its strategic advantage in the region. These opposite extremes
bound a more commonly held view among experts that China
will continue to see peace as essential to its economic growth and
internal stability."

[More on China next week.]

Emerging Markets - "Many emerging market countries have not
yet undertaken the financial reforms needed to help them survive
the next economic crisis. Absent such reform, a series of future
economic crises in emerging market countries probably will dry
up the capital flows crucial for high rates of economic growth."
This is already happening in Asia. Countries like Indonesia
(only the 4th-largest in terms of population in the world), the
Philippines, and Thailand show me nothin''!

Global energy supplies - Turbulence in this area would have a
devastating effect. "Such a result could be driven by conflict
among key energy-producing states, sustained internal instability
in two or more major energy-producing states, or major terrorist
actions."

The Middle East - Most regimes are change resistant and there is
little positive change in the region, "raising the prospects for
increased demographic pressures, social unrest, religious and
ideological extremism, and terrorism directed both at the regimes
and at their Western supporters."

Russia - "Remains internally weak and institutionally linked to
the international system primarily through its permanent seat on
the UN Security Council. In this view, whether Russia can
adjust to this diminished status in a manner that preserves rather
than upsets regional stability is also uncertain."

India - "Global trends conflict significantly in India. The size of
its population - 1.2 billion by 2015 - and its technologically
driven economic growth virtually dictate that India will be a
rising regional power. The unevenness of its internal economic
growth, with a growing gap between rich and poor, and serious
questions about the fractious nature of its politics, all cast doubt
on how powerful India will be by 2015. Whatever its degree of
power, India''s rising ambition will further strain its relations
with China, as well as complicate its ties with Russia, Japan, and
the West - and continue its nuclear standoff with Pakistan."

AIDS

The NIC report addressed the global security issues related to the
scourge of AIDS; and the disease will not just be a major
problem in Africa but also in India, Southeast Asia, several
countries formerly part of the Soviet Union, and possibly China.

--"AIDS will reduce economic growth by up to 1 percent of GDP
per year and consume more than 50 percent of health budgets in
the hardest-hit countries."

--"AIDS and such associated diseases as TB will have a
destructive impact on families and society. In some African
countries, average lifespans will be reduced by as much as 30 to
40 years, generating more than 40 million orphans and
contributing to poverty, crime, and instability."

--"AIDS, other diseases, and health problems will hurt prospects
for transition to democratic regimes as they undermine civil
society, hamper the evolution of sound political and economic
institutions, and intensify the struggle for power and resources."

That''s it for now. I need to move on to China and "The
Tiananmen Papers" next week. But from time to time I may
flash back to the Global Trends 2015 report. There are some
long-term problems that don''t draw the attention they deserve,
such as the water shortage issue that will be a huge one,
particularly for the developing world where 80% of existing
water is used for agriculture interests. 3 billion folks live in
"water-stressed countries" and these shortages could trigger
conflicts between states, much as shortages in energy have done
in the past.

Brian Trumbore


AddThis Feed Button

 

-01/18/2001-      
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Hot Spots

01/18/2001

Global Trends, Part II

Continuing with our discussion of the future, as defined by the
National Intelligence Council''s report titled "Global Trends
2015," we''ll focus on issues affecting the world economy.

But first, following are some conclusions that the CIA-sponsored
document reached with regards to science and technology.

While advances in S&T will improve the quality of life across
many different spectrums, there will obviously be problems from
a security standpoint.

"Increasing reliance on computer networks is making critical
U.S. infrastructures more attractive as targets. Computer
network operations today offer new options for attacking the
United States within its traditional continental sanctuary -
potentially anonymously and with selective effects.
Nevertheless, we do not know how quickly or effectively such
adversaries as terrorists or disaffected states will develop the
tradecraft to use cyber warfare tools and technology, or, in fact,
whether cyber warfare will ever evolve into a decisive combat
arm.

"Rapid advances and diffusion of biotechnology, nano-
technology, and the materials sciences, moreover, will add to the
capabilities of our adversaries to engage in biological warfare or
bioterrorism."

The Global Economy / Hot Spots

"While the outlook for the global economy appears strong..."

U.S. - "Given its large trade deficit and low domestic savings,
the U.S. economy - the most important driver of recent global
growth - is vulnerable to a loss of international confidence in its
growth prospects that could lead to a sharp downturn, which, if
long lasting, would have deleterious economic and policy
consequences for the rest of the world."

Europe and Japan - Their populations are aging rapidly,
"requiring more than 110 million new workers by 2015 to
maintain current dependency ratios between the working
population and retirees. Conflicts over social services or
immigration policies in major European states could dampen
economic growth." This is an understatement.

In addition, the first uncertainty about Japan "is whether it will
carry out the structural reforms needed to resume robust
economic growth and to slow its decline relative to the rest of
East Asia, particularly China. The second uncertainty is whether
Japan will alter its security policy to allow Tokyo to maintain a
stronger military and more reciprocal relationship with the
United States."

China - "Ambitious goals for reforming its economy will be
difficult to achieve: restructuring state-owned enterprises,
cleaning up and transforming the banking system, and cutting the
government''s employment rolls in half. Growth would slow if
these reforms go off-track."

But, "China has proven politically resilient, economically
dynamic, and increasingly assertive in positioning itself for a
leadership role in East Asia. (However) its long-term military
program in particular suggests that Beijing wants to have the
capability to achieve its territorial objectives, outmatch its
neighbors, and constrain U.S. power in the region."

"Two conditions, in the view of many specialists, would lead to a
major security challenge for the U.S. and its allies in the region:
a weak, disintegrating China, or an assertive China willing to use
its growing economic wealth and military capabilities to pursue
its strategic advantage in the region. These opposite extremes
bound a more commonly held view among experts that China
will continue to see peace as essential to its economic growth and
internal stability."

[More on China next week.]

Emerging Markets - "Many emerging market countries have not
yet undertaken the financial reforms needed to help them survive
the next economic crisis. Absent such reform, a series of future
economic crises in emerging market countries probably will dry
up the capital flows crucial for high rates of economic growth."
This is already happening in Asia. Countries like Indonesia
(only the 4th-largest in terms of population in the world), the
Philippines, and Thailand show me nothin''!

Global energy supplies - Turbulence in this area would have a
devastating effect. "Such a result could be driven by conflict
among key energy-producing states, sustained internal instability
in two or more major energy-producing states, or major terrorist
actions."

The Middle East - Most regimes are change resistant and there is
little positive change in the region, "raising the prospects for
increased demographic pressures, social unrest, religious and
ideological extremism, and terrorism directed both at the regimes
and at their Western supporters."

Russia - "Remains internally weak and institutionally linked to
the international system primarily through its permanent seat on
the UN Security Council. In this view, whether Russia can
adjust to this diminished status in a manner that preserves rather
than upsets regional stability is also uncertain."

India - "Global trends conflict significantly in India. The size of
its population - 1.2 billion by 2015 - and its technologically
driven economic growth virtually dictate that India will be a
rising regional power. The unevenness of its internal economic
growth, with a growing gap between rich and poor, and serious
questions about the fractious nature of its politics, all cast doubt
on how powerful India will be by 2015. Whatever its degree of
power, India''s rising ambition will further strain its relations
with China, as well as complicate its ties with Russia, Japan, and
the West - and continue its nuclear standoff with Pakistan."

AIDS

The NIC report addressed the global security issues related to the
scourge of AIDS; and the disease will not just be a major
problem in Africa but also in India, Southeast Asia, several
countries formerly part of the Soviet Union, and possibly China.

--"AIDS will reduce economic growth by up to 1 percent of GDP
per year and consume more than 50 percent of health budgets in
the hardest-hit countries."

--"AIDS and such associated diseases as TB will have a
destructive impact on families and society. In some African
countries, average lifespans will be reduced by as much as 30 to
40 years, generating more than 40 million orphans and
contributing to poverty, crime, and instability."

--"AIDS, other diseases, and health problems will hurt prospects
for transition to democratic regimes as they undermine civil
society, hamper the evolution of sound political and economic
institutions, and intensify the struggle for power and resources."

That''s it for now. I need to move on to China and "The
Tiananmen Papers" next week. But from time to time I may
flash back to the Global Trends 2015 report. There are some
long-term problems that don''t draw the attention they deserve,
such as the water shortage issue that will be a huge one,
particularly for the developing world where 80% of existing
water is used for agriculture interests. 3 billion folks live in
"water-stressed countries" and these shortages could trigger
conflicts between states, much as shortages in energy have done
in the past.

Brian Trumbore