Envisioning 2050 for the Globe | Economic Growth | Asian Development Bank

Envisioning 2050 as a century of Indian Ocean Community and strengthened European Community

This report is an alternative view of the scenarios outlined in three brilliant publications which seek to define the 21st century. The alternative view is that of a strengthened European Community and the emergence of Indian Ocean Community as power houses to ensure an equitable global economy by 2050:

Indian Ocean Community

1. Asia 2050 – ADB 2. Envisioning 2030: US Strategy for a Post-Western World -- Atlantic Council’s Strategic

Foresight Initiativei
3. Global Trends 2030: Alternative Worlds -- National Intelligence Councilii

In the context of the two publications from US institutions envisioning 2030, it will be appropriate to call the national leaders of Asian countries mentioned in the ADB report with the ADB taking the lead, in close coordination with African Development Bank, Islamic Development Bank, USA, Australia and Japan, to present a review of ADB's Asia 2050 report in the context of the evolving strategic initiatives suggested by the National Intelligence Council and Atlantic Council. It is noteworthy that the Atlantic Council's publication lauds the ADB's pioneering effort achieved under the leadership of ADB President Haruhiko Kuroda and your guidance. I like what Haruhiko said: it ain't pre-ordained. Such a review will help bring together countries of the Pacific, Indian Ocean, and Atlantic Oceans to achieve a common imperative of One world (fusing the Post-Western and the Asian worlds).
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Together, the leaders of Asian nations have to make the 2050 vision a reality to lead the globe out of the present financial crisis situation of stagnant economies of the western world. All actors have to outlive the colonial past and move forth with determination. With determination and decisive action, everything is possible. An alternative world will have a strengthened European Community and a vibrant Indian Ocean Community which will spearhead the march towards Asia 2050 to reach the state of the equitable world which existed ca. 1700. National Intelligence Agency’s Global Trends 2020 identifies four past transition points: 1815, 1919, 1945, 1989.

Coming out of 25 years of conflict, Europe declared a 'long peace' after 1815 of Congress of Vienna which coped with autocracies and Holy Alliance of Russia, Prussia and Austro-Hugarian Empire confronting Britain and France and the issues arising from the French Revolutionary Wars, the Napoleonic Wars and the dissolution of the Holy Roman Empire. The Congress sought a balance of power, a return to a 17th century world where no nation dominated Europe. The
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Final Act signed on 9 June 1815 redrew the boundaries of states in Europe. and included the creation of a German Confederation of 38 states. The Concert of Europe unraveles after the Crimean War (1854–56), the Italian War of Independence (1859), the Austro-Prussian War (1866) and the Franco-Prussian War (1870–71). Early 20th century saw two opposing coalitions (the Triple Alliance and the Entente Powers) and World War I broke out in August, 1914. 1919 and 1945 were transition point after World Wara I and II. 1989 saw the dissolution of the Soviet Union. 1989 also marked the invention of World Wide Web in Switzerland by Tim Berners Lee which was opened to the public for free use in 1993.

(Global Trends 2030, p. 101 ) Atlantic Council’s Envisioning 2030 draws upon the trends and anticipate further shifts in global economic and political influence. Claiming the unwillingness of nations to replace the United States as the world’s pivotal power, Atlantic Council’s report focuses on America’s role: “ But to shape tomorrow’s global system, the United States must urgently address its domestic economic and political dysfunctions, even as it fundamentally alters the way it leads globally.” Calling the report a ‘flagship product’ of the Atlantic Council’s new Brent Scowcroft Center on International Security an embrace posture is suggested to cope with these historic challenges.iii

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(ibid., p.100) In Chapter 3 of the Atlantic Council's report, alternative worlds are delineated in four scenarios for 2030. The four scenarios are: Stalled Engines–a scenario in which the US and Europe turn inward and globalization stalls. Fusion–a world in which the US and China cooperate, leading to worldwide cooperation on global challenges. Gini-Out-of-the-Bottle–a world in which economic inequalities dominate.
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Nonstate World–a scenario in which nonstate actors take the lead in solving global challenges.

(ibid, p.109)

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Scenario 1 Stalled engines

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Scenario 2 Fusion

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Scenario 3: Gini out-o-f the bottle

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Scenario 4 Nonstate World

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(ibid, p.133) Called a Nonstate World, Scenario 4 is a remarkable innovative thinking. “In a Nonstate World, nongovernmetal organizations (NGOs), multinational businesses, academic institutions, and wealthy individuals, as well as subnational units, such as megacities, flourish and take the lead in confronting global challenges. New and emerging technologies that favor greater empowerment of individuals, small groups, and ad hoc coalitions spur the increased power of nonstate actors. A transnational elite—educated at the same global academic institutions—emerges that leads key nonstate actors (major multinational corporations,
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universities, and NGOs). A global public opinion consensus among many elites and middle-class citizens on the major challenges—poverty, the environment, anti-corruption, rule-of-law, and peace—form the base of their support and power. Countries do not disappear, but governments increasingly see their role as organizing and orchestrating “hybrid” coalitions of state and nonstate actors which shift depending on the challenge… Multinational businesses, IT communications firms, international scientists, NGOs, and groups that are used to cooperating across borders thrive in this hyper-globalized world where expertise, influence, and agility count for more than “weight” or “position.” Private capital and philanthropy matter more, for example, than official development assistance. Social media, mobile communications, and big data are key components, underlying and facilitating cooperation among nonstate actors and with governments. In this world, the scale, scope, and speed of urbanization—and which actors can succeed in managing these challenges—are critical, particularly in the developing world. National governments that stand in the way of these clusters will fall behind. This is a “patchwork” and uneven world. Some global problems get solved because networks manage to coalesce, and cooperation exists across state and nonstate divides. In other cases, nonstate actors may try to deal with a challenge, but they are stymied because of opposition from major powers. Security threats pose an increasing challenge: access to lethal and disruptive technologies expands, enabling individuals and small groups to perpetrate violence and disruption on a large scale. Terrorists and criminal networks take advantage of the confusion over shifting authorities among a multiplicity of governance actors to acquire and use lethal technologies. Economically, global growth does slightly better than in the Gini Out-of-the-Bottle scenario because there is greater cooperation among nonstate actors and between them and national governments on big global challenges in this world. This world is also more stable and socially cohesive than Nonstate World and Stalled Engines.” (p.128) Let us look deeper at this Scenario 4 which takes the idea of ‘urbanization’ detailed in Asia 2050 Report by Asian Development Bank (ADB). For the optimistic growth scenarios envisaged in Asia 2050 leading China and India to achieve their share of the World GDP which they had in 1700, the ADB calls for the adoption of the Korean model technology-empowered, middle-class driven, sustained growth – to avoid what is called the need to avoid ‘Middle Income Trap’, a trp noticed from the experience of some Latin American countries. Explaining the middle-income trap:

“The sustained growth of Asian economies must be anchored in improvements in total factor productivity (TFP)… The high income developed economies such as Japan, Republic of Korea,
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Taipei,China, Hong Kong, China and Singapore are leaders with regards to TFP levels… The continental economies, PRC and India, are in a class by themselves not just because of their size but because of the heterogeneity of their economic structures and the depth of their scientific and technological know-how. They have vast areas where catch-up entrepreneurship holds the key for growth and employment but also deep pockets of innovation clusters that contribute toward global scientific and technological leadership. The scale effect is an important source of demand and a source of supply of talent and capabilities that enable innovation. Milton Friedman famously asserted, “The conquest of the technological frontier, like the conquest of the geographical frontier, requires millions of individuals.” The scale effect may explain why capital flocks to PRC and India… Other converging economies such as Indonesia, Malaysia, Thailand and Viet Nam are closer to the catch-up end of the entrepreneurship and technological innovation spectrum. These countries have experienced moderate TFP growth but have been constrained by a number of factors.” (Asia 2050, p. 84) The ADB Report continues to outline the priorities to attain the 2050 goalpost: “Entrepreneurship and innovation are vital to economic growth and that they have to be explicitly fostered, cultivated and given ample space for development rather than being taken for granted. For the non-converging Asian economies, catch-up entrepreneurship and innovation is vitally important and likely to remain the most relevant strategy for some years. For these countries, the policy priority is not high-tech development but to get the economic and business environment fundamentals right. The mistake that policy makers in Asia must avoid is to create a policy and regulatory environment to favor frontier entrepreneurship at the expense of catch-up entrepreneurship… Most Asian economies need to make significant investments in human capital development by ensuring both, higher enrollment rates and higher quality at all levels of education. Improved learning with an emphasis on creativity can help foster higher productivity, innovation and entrepreneurship. Another essential element to promote entrepreneurship is an openness to competition and a business environment which facilitates entry and entrepreneurship on a large scale.” (p.91) Some guidelines are offered to cope with the governance challenge in Asia (summarized in Table 1, p. 94)

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http://globaltrends2030.files.wordpress.com/2012/09/cleanedall-purpose-generic-le-menu.pdf

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From Executive Summary of the Asian Development Bank Report: "Asia is in the middle of a historic transformation. If it continues to follow its recent trajectory, by 2050 its per capita income could rise sixfold in purchasing power parity (PPP) terms to reach Europe's levels today. It would make some 3 billion additional Asians affluent by current standards. By nearly doubling its share of global gross domestic product (GDP) to 52 percent by 2050, Asia would regain the dominant economic position it held some 300 years ago, before the industrial revolution (Figure 1)."

Envisioning 2030: US Strategy for a Post-Western World is a report released by the Atlantic Council’s Strategic Foresight Initiative that urges the Obama Administration to seize a historic opportunity to ensure America’s global interests over the long term. It outlines a US leadership strategy for the period ahead to 2030 and offers policy approaches in key subject areas to ensure a positive outcome at this inflection point toward a “post-Western world,” given historic shifts in political and economic influence. Offered as a companion to the US National Intelligence Council (NIC)’s Global Trends 2030 quadrennial assessment released today, the Council’s Envisioning 2030: US Strategy for a PostWestern World surveys the emerging economic and geopolitical landscape; it describes the unprecedented policy challenges that landscape presents; and it outlines a US strategy to avoid a zero-sum, conflictual future and move toward a more cooperative and prosperous 2030. Six elements of strategy for President Obama emerge from this report: Frame second-term policies from a more strategic and long-term perspective, recognizing the magnitude of the moment and the likelihood that the United States’ actions now will have generational consequences. Continue to emphasize “nation-building at home” as the first foreign policy priority, without neglecting its global context. Recognize that the United States must energetically act to shape dynamic, uncertain global trends, or it will be shaped unfavorably by them. Pursue more collaborative forms of leadership through deepening current alliances and interacting more effectively with a diverse set of actors. Most importantly, it must reinforce its strategic base: the transatlantic relationship.
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Deepen cooperation with China as the most crucial single factor that will shape the international system in 2030. Creatively address the locus of instability in the 21st century—the greater Middle East from North Africa to Pakistan—a major threat to US strategy and world order. “The United States has something rare among history’s great powers—a second chance at molding the international system to secure its long-term interests,” said Atlantic Council President and CEO Frederick Kempe. “No other nation is likely to have as much impact in influencing the global future. Yet in a more complex and competitive world, the US margin of error is smaller.” http://www.acus.org/publication/envisioning-2030-us-strategy-post-western-world Global trends 2030: An overview from the US National Intelligence Council

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Inevitability: The study predicts that China and India will hold the most power in coming years, while the US and EU have been on a steady decline

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Other perspective: Any way the power index falls, developing states will overtake developed states

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Consumption: By 2030, India and China's middle class will rise to become major consumers, taking more resources The report, published by the National Intelligence Council, suggested that the economies of China, India and Brazil will generate the new middle class, who will produce better education standards, better health, and the advance of women into greater wealth and power. It added: ‘Individual empowerment will accelerate substantially owing to poverty reduction and a huge growth of the global middle class. ‘For the first time, a majority of the world’s population will not be impoverished, and the middle classes will be the most important social and economic sector in the vast majority of countries around the world. Demand for consumer goods, including cars, (will) rise sharply with the growth of the middle class.’ The new middle class will be mostly urban, with nearly two-thirds of the world's population will live in cities by 2030, with the majority of people connected by technology, protected by advanced health care and linked by countries that work together, perhaps with the United States and China cooperating to lead the way.

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Some lessons learnt from the telecommunication revolution
One of the innovations which will have an impact on the scenarios of growth in the wealth of nations is the advancement of telecommunication revolution. India provides a dramatic example of the way the nation had overcome the last-mile problem in reaching telephony to every one of her 6.5 lakh villages. The emergence of the cell phone as a cost-effective consumer product has meant that this last-mile problem faced by ensuring landline connections has been simply bypassed. As of July 2012, the base of India’s mobile phone subscribers has touched 929 millioniv, in a population of 1.2 billion. In terms of contribution to economic activity, this level of connections, connecting the people has led to a revolutionary change in the way the market exchanges occur. Today, it is a common sight even to see the village vegetable vendors carrying cell phones exchanging information about the market and linking with the consumers. This leads to an important facet of Indian economy which should receive greater attention from the think taks in Atlantic Council, National Intelligence Agency of America and in Asian Development Bank. The important facet is that for the foreseeable 21st century, India will continue to live in her 6.5 lakh villages leading to the imperative of ensuring that factors of production which lead to sustained growth of the wealth of the nation have to be kept within the reach of he people in the villages. The so-called urbanization should effectively mean that villages get urban facilities and technological infrastructure required to sustain the growth rate. This will call for decentralization of decision-making and authority at the village level by strengthening decentralized government agencies such as the local self-governing institutions. This is consistent with the historical traditions which have existed for millennia of janapadas, guilds (sreni) operating within a framework of dharma-dhamma as an ethical order ensuring social responsibility of corporate entities such as the guilds. Infrastructure management including management of water and land resources together with the rapid enhancement of energy options such as the use of wind power, solar power, nuclear power, nano-technologies should be priorities in governance. The role of social capital in ensuring a sustained growth-trajectory to attain the share of GDP in 2050 equalling the share enjoyed by India in 1700 is fundamental. Corporate entities have existed in India governed by the social capital of inter-personal relationships. These relationships should be strengthened to ensure that the fruits of the growing economy get equitably distributed to the households and extended family systems which are the bedrock of the social capital in most nations of Asia and in Indian Ocean Community nations, in particular. Thus a theory for the wealth of nations has to veer away from the Maket Economics model and move towards strengthening self-reliant sets of social groups within the European Community
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and Indian Ocean Community. This theory is consistent with the nonstate scenario outlined in ADB Report on Asia 2050.

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Envisioning 2030: US Strategy for a Post-Western World December 10, 2012 Download Publication PDF
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On Monday December 10, 2012 the Office of the Director of National Intelligence released the National Intelligence Council's (NIC) latest Global Trends report, Global Trends 2030: Alternative Worlds. The Global Trends project engages expertise from outside government on factors of such as globalization, demography and the environment, producing a forward-looking document to aid policymakers in their long term planning on key issues of worldwide importance. Read Global Trends 2030: Alternative Worlds. Citation referring to Asian Development Bank's Asia 2050 report:
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From the Foreword in Atlantic Coucil's document: http://www.acus.org/files/publication_pdfs/403/Envisioning2030_web.pdf.pdf
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http://articles.timesofindia.indiatimes.com/2012-07-05/telecom/32550630_1_base-touchessubscriber-base-wireline-segment

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