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Tuesday, Jan. 15, 2013

EDITORIAL

The NIC's crystal ball

Noted philosopher and aphorist Mr. Yogi Berra once said that "making predictions is hard, especially about the future." The U.S. National Intelligence Council (NIC) hasn't been deterred by the inherent difficulty of that endeavor, as it has just produced its sixth report on the state of the world some two decades in the future. It is an exhilarating assessment, although the ultimate outcome remains unknowable — and it isn't clear if the ability to see the future would prepare us any better for it. Nevertheless, the NIC report should be required reading for every national leader and concerned citizen.

Every four years, the 17 U.S. government intelligence agencies that comprise the NIC explore and assess global trends and their ultimate impacts. Those reports are developed over several years and are designed to look as broadly as possible at the forces shaping the way the world works and inform policymakers. It is a daunting and frustrating task, not only because predicting the future is difficult, but also because policymakers do not usually have the luxury of looking over the horizon.

Their immediate concern is the fires in their in-box, the problems that have to be dealt with right now. In this environment, such forecasting seems self-indulgent and irrelevant.

There is another problem in the forecasting process. On the one hand, the more fantastic predictions (no matter how well grounded in trends) are interesting but rarely occur. On the other hand, the more pedestrian incremental shifts do not attract much attention, even though predictions about them are more likely to be accurate. In either case, a policymaker is likely to wonder why all the fuss.

In fact, the answer is quite simple. "We are," notes the report, "at a critical junction in human history, which could lead to widely contrasting futures." "Global Trends 2030: Alternative Worlds" identifies four "megatrends" that will determine our future.

The first of the four is the dramatic expansion of the middle class worldwide. By 2030, the number of people living in extreme poverty will drop by 50 percent and the middle classes will be the most important social and economic sector. But these individuals will not just be wealthier: They will be better educated, healthier and have access to a range of new technologies. In short, they will be empowered, and this new capability will create entirely new demands on political and economic systems. It is difficult to see how authoritarian governments will be able to survive in this world.

The second major trend is the diffusion of power from "the West to the Rest." Asia will be the primary beneficiary of this shift but the phenomenon is more widely dispersed than the mere "rerise of Asia." Emerging economies the world over are poised to surge forward. As they develop they will demand political input commensurate with their new economic status. Transitions are not unique to this moment in human history, but never before have multiple power centers emerged at the same time. There is no indication that the institutions developed to run the world are prepared to handle this shift.

The third megatrend is demographic change, a phenomenon with which Japan, the world's grayest country, is already well acquainted. But it isn't just Japan that is graying. Most developed economies face similar constraints, as do South Korea and China. In fact, China is likely to be the first country to get old before it gets rich. Other developing countries will experience similar trajectories, although not as drastic as that in China.

Shrinking youth populations, which will help better match labor to actual jobs, will actually stabilize growth prospects and reduce the potential for political instability.

The fourth megatrend, which will be amplified by the other three, is intensified competition for food, energy and water. Global Trends 2030 forecasts a 35 percent rise in the demand for food, a 40 percent increase in annual water requirements, and a 50 percent jump in energy needs by 2030.

The authors carefully note that we are not necessarily going to inhabit "a world of scarcities" but they warn policymakers to prepare for rising demand and its side effects.

That is the key message of the NIC report: Be prepared. Even if we cannot anticipate precise outcomes, we can identify the pressure points and strains in the system. Yet even if our leaders demonstrate that presence of mind, the real trick is implementing the hard lessons that will follow.

One of the biggest challenges the world faces is modernizing a system of global governance that mainly reflects the distribution of power nearly 70 years ago, at the end of World War II. Not only must power be redistributed with institutions among national governments — and in some cases, new institutions are plainly needed — but states must be prepared to share power with new actors, such as cities and private groups and organizations.

Getting the answers right now is difficult. Even when earlier reports were right — and some of the mistakes are howlers; North Korea is not, as was predicted in 1997, a normal state — they often misjudged the pace of change.

Yet, the "when" matters just as much as the "what" when it comes to government preparation. The NIC reports are fascinating guides to possible futures, and proof that Mr. Berra got it right when he confirmed that "The future ain't what it used to be."



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