Defining the World Order is quite tough to start with. Unless, of course, you’re perfectly happy believing that lizard people and Illuminati meet for tea each day to divide up the ill-gotten gains of their conspiratorial duties, that makes it very easy. However, let’s try. Since the end of the Cold War and the collapse of Soviet communism, we live in a capitalist world, even if the Communist Party of the People’s Republic of China is one of the most important organizations in it. We also live in a world where America is the greatest superpower – arguably the last one standing – and dominates the world militarily and where it and the European Union trading bloc are the biggest, richest consuming boys in the world economy. The East is rising, but its power and riches are based to a great extent on producing cheap goods for those economies to consume. India too is becoming a powerful economy – witness their recent first steps in space – and is particularly powerful in the tech world. This is laughably simplistic and probably out of date as soon as it is typed – one new fact of life is the dizzying speed of change in the new networked world, but we’ve tried.
So let’s see what could upset that apple cart, as it has been upset throughout world history.
1 – China Starts to Assert Itself
China’s transformation from 3rd world to fast developing member of the BRICS club has undoubtedly been the big story of the last couple of decades. Key to the effect that change has had on the world is a pretty good relationship with the world’s only superpower, America. But, what if China decided to stop playing ball with the States? As the US teetered on the edge of defaulting on its debts earlier this year, Chinese official media (which can be considered to be speaking with some pretty high ranking official clout) spoke of a “de-Americanized” world order.
China owns a hell of a lot of that American debt, $1.28 trillion, and has been pouring investment into the American economy, spending around $54 billion just in 2012. The article in question was harshly worded, saying: “Days when the destinies of others are in the hands of a hypocritical nation have to be terminated, and a new world order should be put in place”.
In the end, a deal was done and China reportedly continues to buy American debt, but it’s perfectly possible, likely even, that another default crisis will come around, and at some point China may lose patience with its second biggest trading partner. And, then what?
2 – Emerging economies start to dominate
At what point will emerging economies cease to be emerging and start to become dominant? Built on cheap labor and massive natural resources, this economic growth is producing a new middle class and massive urbanization. China and India alone are expected to account for 40% of the 70% of world economic growth that so-called emerging economies are predicted to produce in the next few years. Next year, the balance could shift, with these countries’ GDPs surpassing those of the developed nations. As they grow, new corporations will emerge to challenge the dominance of the biggest western companies – Indian cars are on the way to European markets as we speak. Having been founded and grown in economies with poorer infrastructure and less regulation these new companies can be even more flexible, even more driven than their predecessors. As the emerging economies build their power there is more competition for resources like oil and they are looking for the political power to reflect their economic muscle. In 2010, 6% of the IMF’s voting shares went to emerging economies and China became the organizations third biggest member.
3 – Africa’s energy power
Too often we think of Africa as a struggling continent of deprivation that often needs our help. But Africa is swimming in something that could transform its fortunes – abundant energy reserves. Angola and Nigeria are already major players in the world oil markets and plenty of other countries have reserves. Natural gas is another burgeoning sector and the Chinese and other BRICS are prowling to get their hands on this energy to fuel their enormous growth. There still need to be changes – more political stability, better infrastructure, less corruption – but Africa could boom on the back of its energy riches. While west Africa has been the powerhouse thus far, there have also been big finds in the east, where more stable governments might tempt outside investors to take a punt. And, as the western economies try to switch to a low carbon future, could Saharan solar arrays soon be piping electricity north to Europe. Meanwhile, in Nigeria, while oil and gas flows out of the country many locals still use kerosene and charcoal. Money may inspire change.
4 – Lies on the internet
You’ve probably read at least three pages on nonsense online yourself today – perhaps you shared it, perhaps you wrote it (You devil, you!) Well, this stuff can be dangerous. The Arab Spring uprisings were reported with a heavy emphasis on the role of social media in mobilizing crowds and reporting what official media would or could not. We are a networked world now, and it’s spreading and spreading. This is serious enough to make it onto a list of top trends for 2014 for next year from the World Economic Forum, who list “The rapid spread of misinformation online” as a concern with 30% of the world’s youngsters online. How this might tie in with one of their other concerns – more unrest in north Africa and the Middle East – we will have to see.
5 – The end of the European Union
The economic crash did terrible damage to the concept of the European Union. There has always been opposition to the trading bloc, particularly its growing intrusion into the political sphere, but it has never been stronger and more unified. The opposition comes generally from the right and often comes with anti-immigrant sentiment and in the case of some at the extreme – like Greece’s Golden Dawn – outright fascism attached. This year, the French Front National and the Dutch Party for Freedom have announced an anti-European Union alliance in coming elections. In the UK, the Eurosceptic UKIP are expected to be the big winners in the next European elections (ironically). The Conservative party has promised to offer a referendum on whether the UK should leave the EU if they win the next election – it’s by no means certain there won’t be a yes vote. The big new economies of the East and established trade partners like America make it clear that they like dealing with the EU’s borderless trading system, but how long it will last in its current form or in its current size is certainly up for grabs.
6 – Deglobalization
Globalization is a relatively new concept in itself, but could it be on the way out? Morgan Stanley’s head of global economics, Joachim Fels, reckons it could be. He sees worrying points of similarity between the crash of 2008 and the Wall Street Panic of 1907, which in turn led to the 1913 ending of the first Golden Age of Globalization. The following year, Europe and then the world was plunged into war (something Fels says he doesn’t foresee). He says investors started to bring home cash from emerging markets after the crash and the resulting creation of winners and losers could cause “dire economic consequences” for the world economy and resulting conflict both within and between countries.
7 – Fragmentation of states
Next year the people of Scotland will have the chance on whether they would like to end their 300 years as part of the United Kingdom. They are not alone in pushing for independence: Catalonia in Spain has a strong separatist movement as does Belgium’s Flanders and even Venice in Italy would prefer its freedom according to some politicians. This is particularly worrying to some American experts who believe it will produce a Europe of statelets unable to make a meaningful contribution to western defense spending and will make the EU weaker (and that itself is under threat) and the world less stable.
8 – Russian nationalism
Recently in Moscow, young people rioted, attacking immigrants and migrants from other parts of the Russian Federation, apparently in response to the murder of a Russian by a “non-Russian”. A man was killed. That’s worrying and nasty, but it could represent something much bigger going on in Russia. Following the fall of communism, the world crossed its fingers and hoped Russia would emerge as a sparkly new democracy, but the waiting continues. There are elections, but their validity is doubted and a new Russia is emerging that is strong on nationalism and not afraid to throw its weight around if it feels its status is threatened. It turned off Ukraine’s gas supplies in 2006 and fought with Georgia in 2008. Were Russia to become insular and isolated again it would have terrible economic consequences, were it to become belligerent it could have even worse impacts.
9 – Cyber terror
In a wired world all sorts of things are moving online. Some of them are great: healthcare, work, charity fund-raising. Some are evil: Candy Crush Saga, cybercrime, terrorism. The fact is, we now depend massively on computers – what would you do if your internet went down, if there was no Wi-Fi? And it’s not just the fact that you could miss a meeting, the systems that keep our society functioning are increasingly networked and run by computers. That means they’re vulnerable. American security chiefs say that a big 9/11-style attack in the US now seems unlikely, and that cyber terrorists will become the biggest threat to the country in the next decade. Some attacks are from governments, some from hacktivists like Anonymous, but some will come from terrorists bent only on destruction. The Syrian Electronic Army have been a lively player in the Syrian civil war, taking the fight overseas on behalf of the Assad regime. Some of it is pretty harmless, but one attack on the Associated Press Twitter account in April 2013 posted messages that almost certainly caused $136 billion to drop off the S&P 500 index.
10 – Too informed
Walk away from the computer/tablet/phone, you don’t need to know this… Ford’s chief economic predictor (and one of the most influential business thinkers in the world) Sheryl Connelly is worried that we’re all addicted to information. This is worrying for society says Connelly – who urges us all to turn off YouTube and say hello to the person sitting next to us – but also poses a threat to our economies. Too much information is paralyzing she warns and as consumers become overwhelmed with choice and information about that choice they will simply not make any choice. So, do as you’re told and TURN OFF YOUR COMPUTER.