Asia set to become World’s Powerhouse by 2030: US Intelligence Report

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A view from Sky100, Hong Kong’s Observation Deck. “Global Trends 2030: Alternative Worlds” in its latest report says that China’s economy is likely to surpass the United States in less than two decades while Asia will overtake North America and Europe combined in global power by 2030. Photo: Daniel Cheong

In its latest report “Global Trends 2030: Alternative Worlds” issued by the National Intelligence Council, an analytical arm of the U.S. government’s Office of the Director of National Intelligence says that China’s economy is likely to surpass the United States in less than two decades while Asia will overtake North America and Europe combined in global power by 2030.

However, the economies of Europe, Japan, and Russia are likely to continue their slow relative declines, the report said.

The world is transforming at an unprecedented rate

The report gave an interesting time-line comparison of transformation of countries in the past.

“It took Britain 155 years to double GDP per capita, with about 9 million people… The US and Germany took between 30 and 60 years with a few tens of million people … but India and China are doing this at a scale and pace not seen below: 100 times the people than Britain and a tenth the time. By 2030 Asia will be well on its way to returning to being the world’s powerhouse, just as it was before 1500.”

Asian Tigers Roaring

The health of the global economy increasingly will be linked to progress in the developing world rather than the traditional West, the report said.

“As the world’s largest economic power, China is expected to remain ahead of India, but the gap could begin to close by 2030,” it said.

“India’s rate of economic growth is likely to rise while China’s slows. In 2030 India could be the rising economic powerhouse that China is seen to be today. China’s current economic growth rate – 8 to 10 percent – will probably be a distant memory by 2030.”

Diffusion of Power

Asia is set to surpass North America and Europe in global power, but there will not be any hegemonic power. The power of other non-Western or middle-tier states will rise. This middle tier as a group will surpass Europe, Japan, and Russia. China’s economy will be 140-percent larger than Japan; India’s will be 16 times larger than Pakistan’s.

Many currently fragile states could move onto solid ground: Iraq, Ethiopia, Sierra Leone, Liberia and Nigeria, but others—Afghanistan, Somalia, DRC—will remain vulnerable.

Technology will be great leveler, shifting the balance of power towards multifaceted networks.

Growing Nexus Among Energy, Water, and Food

Demand for resources will increase owing to an increase in global population from 7.1 billion today to about 8 billion by 2030. Demand for food set to rise 50 percent; energy 45 percent over the next 15-20 years. Nearly half of world population will live in areas with severe water stress. Fragile states most at risk, but China and India are vulnerable to volatility of key resources. Main questions will be whether there will be more effective management, wider technology use, and greater governance mechanisms.

Critical Game-Changers

Both developing and developed countries face stiff challenges to achieve a new “normalcy” in the global economy. For much of the West, the challenges involves sustaining growth in the face of rapidly aging populations. For China and India, the main challenge will be to avoid “middle income traps.

Potential serious governance deficits driven by rapid political and social changes are likely to exist. Countries moving from autocracy to democracy have a proven record of high instability. About 50 countries fall into this major risk Group; all of themcould grow out of their governance incongruities by 2030 if economic advances continue.

Political landscape will be a lot more complicated: Megacities and regional groupings likely to assume increasing powers. Greater regional integration, especially in Asia.

The characteristics of ICT use—multiple and simultaneous action, near-instantaneous responses, and mass organization across geographical boundaries—increase the potential for more frequent discontinuous change in the international system. On the other hand, ICT will give governments—both authoritarian and democratic—an unprecedented ability to monitor their citizens.

Limited natural resources—such as water and arable land—in many of the same countries that will have disproportionate levels of young men—particularly in Sub-Saharan Africa, South Asia, and parts of the Middle East—increase the risk of intrastate conflict. Most intrastate conflicts will remain in form of irregular warfare, but spread of precision weaponry may change the character of some of these conflicts.

A more fragmented international system, spillover from regional conflicts, and resource competition increases potential for interstate conflict. The Middle East most likely will remain the most volatile region, even as it moves toward greater democratization. Any future wars in Asia and the Middle East probably would include a nuclear element. Many of these conflicts, once begun, would not be easily containable and would have global impacts.

We’ve identified 16 “disruptive” technologies with potential global significance out to 2030. They are grouped around potential energy breakthroughs; food- and water-related innovations; big data and forecasting human behaviors; and enhancement of human mental and physical capabilities and anti-aging. Many will need concerted government efforts to be realized by 2030. An international security environment favoring cooperation is also a “must”.

The US most likely will remain primus inter pares among the other great powers in 2030 because of the multifaceted nature of its power and legacies of its leadership, but the “unipolar moment” is over. Limited potential for China to replace US as international leader by 2030.

A reinvigorated US economy would increase the prospects that the growing global and regional challenges would be addressed. If the US fails to rebound, a dangerous global power vacuum would be created.

Global Trends 2030: Alternative Worlds” is available for download on Global Trends 2030 website.

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