December 2000

Global Trends 2015:A Dialogue About the FutureWith Nongovernment Experts

This paper was approved for publication by theNational Foreign Intelligence Board under the author-ity of the Director of Central Intelligence.

Prepared under the direction of the NationalIntelligence Council.

NIC 2000-02

13 December 2000

From the Director of Central Intelligence

I am pleased to introduce Global Trends 2015, which takes a look at the world over the next 15 years from the perspective of the national security policymaker. This is not a traditional intelligence assessment, depending on classified sources and methods. Rather, it reflects an Intelligence Community fully engaged with outside experts in a constructive dialogue about the future. I want to encourage this lively exchange.

From the beginning of this ambitious project in fall 1999, we intended to make GT-2015 an unclassified assessment to be shared with the public. Experts from academia, think-tanks and the corporate world have made major contributions, and their reactions, along with those of other specialists who will see our work for the first time, will strengthen our continuing analysis of the issues covered in GT-2015. Grappling with the future is necessarily a work in progress that, I believe, should constantly seek new insights while testing and revising old judgments.

I hope that GT-2015 will contribute to a growing strategic dialogue in the US Government that will help our country meet the challenges and opportunities ahead. I look forward to your comments.

George J. Tenet

DI Design Center 377188AI 12-00

From the Chairman of the National Intelligence Council:

The National Intelligence Council (NIC), a small center of strategic thinking in the US Intelligence Community, launched Global Trends 2015 to stimulate US policymakers to think "beyond their inboxes." This work expands the effort of Global Trends 2010, published in 1997 under the leadership of my predecessor, Professor Richard Cooper of Harvard.

We identify global "drivers" and estimate their impact on the world over the next 15 years—demography and natural resources, technology, globalization and governance, likely conflicts and prospects for international cooperation, and the role of the United States. The judgments flow from our best efforts to produce a comprehensive picture of the world in 2015. Analysis will help senior leaders better cope with, for example, the uncertainties involved with the decline of Russia, the emergence of China, or the political, economic and societal dynamics in the Middle East.

Global Trends 2015 should be seen as a work-in-progress, a flexible framework for thinking about the future that we will update and revise as conditions evolve. As such, we are pleased to share it with the public, confident that the feedback we receive will improve our understanding of the issues we treat. We welcome comments on all aspects of this study.

Global Trends 2015 is not a traditional intelligence product based on classic intelligence sources, methods and procedures. The National Intelligence Council gave overall direction to the year-long effort, assisted by colleagues from other intelligence agencies and offices. We sought out and drew heavily on experts outside the Intelligence Community to help us both identify the key drivers and assess their impact worldwide. Ultimately, however, the conclusions are our responsibility.

The NIC’s Vice Chairman, Ellen Laipson, and I want to acknowledge the special contributions of several individuals. Enid Schoettle, my special adviser on the NIC, was a principal drafter and coordinator, and she was ably assisted by retired diplomat Richard Smith. The DCI Environmental and Societal Issues Center, led by Paul Frandano, made extensive, invaluable contributions. John Phillips, Chief Scientist of CIA, Directorate of Science and Technology, offered helpful suggestions. Tom Fingar of the State Department’s Bureau of Intelligence and Research made important inputs, as did Ken Knight and Pat Neary of the Defense Intelligence Agency. All the regional and functional National Intelligence Officers (NIOs)—identified at the back page of this publication—contributed sections and provided insights in their areas of expertise. In the final stages of preparing the full text, Enid Schoettle and NIOs Stuart A. Cohen (with his crack staff), David F. Gordon, and Barry F. Lowenkron performed the critical service of integrating substantive comments and judgments.

We are particularly grateful to the Director of Central Intelligence, George Tenet, who encouraged us to take on this ambitious project and provided us with the necessary assistance to bring it to fruition.

John Gannon Chairman

NATIONALIN

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NIC

DI Design Center 377189AI 12-00

(U) Note on Process

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In undertaking this comprehensive analysis, the NIC worked actively witha range of nongovernmental institutions and experts. We began the analysiswith two workshops focusing on drivers and alternative futures, as theappendix describes. Subsequently, numerous specialists from academiaand the private sector contributed to every aspect of the study, from demo-graphics to developments in science and technology, from the global armsmarket to implications for the United States. Many of the judgments in thispaper derive from our efforts to distill the diverse views expressed at theseconferences or related workshops. Major conferences cosponsored by theNIC with other government and private centers in support of GlobalTrends 2015 included:

• Foreign Reactions to the Revolution in Military Affairs (GeorgetownUniversity).

• Evolution of the Nation-State (University of Maryland).

• Trends in Democratization (CIA and academic experts).

• American Economic Power (Industry & Trade Strategies, San Fran-cisco, CA).

• Transformation of Defense Industries (International Institute for Stra-tegic Studies, London, UK).

• Alternative Futures in War and Conflict (Defense Intelligence Agencyand Naval War College, Newport, RI, and CIA).

• Out of the Box and Into the Future: A Dialogue Between Warfightersand Scientists on Far Future Warfare (Potomac Institute, Arlington,VA).

• Future Threat Technologies Symposium (MITRE Corporation,McLean, VA).

• The Global Course of the Information Revolution: TechnologicalTrends (RAND Corporation, Santa Monica, CA).

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• The Global Course of the Information Revolution: Political, Eco-nomic, and Social Consequences (RAND Corporation, Santa Monica,CA).

• The Middle East: The Media, Information Technology, and theInternet (The National Defense University, Fort McNair, Washington,DC).

• Global Migration Trends and Their Implications for the UnitedStates (Carnegie Endowment for International Peace, Washington, DC).

• Alternative Global Futures: 2000-2015 (Department of State/Bureau ofIntelligence and Research and CIA’s Global Futures Project).

In October 2000, the draft report was discussed with outside experts,including Richard Cooper and Joseph Nye (Harvard University), RichardHaass (Brookings Institution), James Steinberg (Markle Foundation), andJessica Mathews (Carnegie Endowment for International Peace). Theircomments and suggestions are incorporated in the report. Daniel Yergin(Cambridge Energy Research Associates) reviewed and commented on thefinal draft.

(U) Contents

Page

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Note on Process 1Overview 5The Drivers and Trends 8Key Uncertainties: Technology Will Alter Outcomes 13Key Challenges to Governance: People Will Decide 17Discussion 19Population Trends 19

Divergent Aging Patterns 19Movement of People 20Health 24

Natural Resources and Environment 26Food 26Water 27Energy 28Environment 31

Science and Technology 32Information Technology 32Biotechnology 33Other Technologies 33

The Global Economy 34Dynamism and Growth 34Unequal Growth Prospects and Distribution 35Economic Crises and Resilience 38

National and International Governance 38Nonstate Actors 40Criminal Organizations and Networks 41Changing Communal Identities and Networks 41Overall Impacts on States 46International Cooperation 47

Future Conflict 49Internal Conflicts 49Transnational Terrorism 50Interstate Conflicts 50Reacting to US Military Superiority 56

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Major Regions 60East and Southeast Asia 61South Asia 64Russia and Eurasia 68Middle East and North Africa 70Sub-Saharan Africa 71Europe 74Canada 76Latin America 78

AppendixFour Alternative Global Futures 83

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(U) OverviewGlobal Trends 2015:A Dialogue About the FutureWith Nongovernment Experts

Over the past 15 months, the National Intelligence Council (NIC), in closecollaboration with US Government specialists and a wide range of expertsoutside the government, has worked to identify major drivers and trends thatwill shape the world of 2015.

The key drivers identified are:

(l) Demographics.

(2) Natural resources and environment.

(3) Science and technology.

(4) The global economy and globalization.

(5) National and international governance.

(6) Future conflict.

(7) The role of the United States.

In examining these drivers, several points should be kept in mind:

• No single driver or trend will dominate the global future in 2015.

• Each driver will have varying impacts in different regions and countries.

• The drivers are not necessarily mutually reinforcing; in some cases, theywill work at cross-purposes.

Taken together, these drivers and trends intersect to create an integrated pic-ture of the world of 2015, about which we can make projections with vary-ing degrees of confidence and identify some troubling uncertainties ofstrategic importance to the United States.

The Methodology Global Trends 2015 provides a flexible framework to discuss and debate thefuture. The methodology is useful for our purposes, although admittedlyinexact for the social scientist. Our purpose is to rise above short-term, tac-tical considerations and provide a longer-term, strategic perspective.

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Judgments about demographic and natural resource trends are based prima-rily on informed extrapolation of existing trends. In contrast, many judg-ments about science and technology, economic growth, globalization,governance, and the nature of conflict represent a distillation of views ofexperts inside and outside the United States Government. The former areprojections about natural phenomena, about which we can have fairly highconfidence; the latter are more speculative because they are contingent uponthe decisions that societies and governments will make.

The drivers we emphasize will have staying power. Some of the trends willpersist; others will be less enduring and may change course over the timeframe we consider. The major contribution of the National IntelligenceCouncil (NIC), assisted by experts from the Intelligence Community, hasbeen to harness US Government and nongovernmental specialists to identifydrivers, to determine which ones matter most, to highlight key uncertainties,and to integrate analysis of these trends into a national security context. Theresult identifies issues for more rigorous analysis and quantification.

Revisiting Global Trends 2010: How Our Assessments Have Changed

Over the past four years, we have tested the judgments made in thepredecessor, Global Trends 2010, published in 1997. Global Trends2010 was the centerpiece of numerous briefings, conferences, andpublic addresses. Various audiences were energetic in challenging,modifying or confirming our judgments. The lively debate that ensuedhas expanded our treatment of drivers, altered some projections wemade in 1997, and matured our thinking overall—which was theessential purpose of this exercise.

Global Trends 2015 amplifies several drivers identified previously,and links them more closely to the trends we now project over the next15 years. Some of the key changes include:

• Globalization has emerged as a more powerful driver. GT 2015 seesinternational economic dynamics—including developments in theWorld Trade Organization—and the spread of information technol-ogy as having much greater influence than portrayed in GT 2010.

(continued)

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• GT 2015 assigns more significance to the importance of governance,notably the ability of states to deal with nonstate actors, both goodand bad. GT 2015 pays attention both to the opportunities for coop-eration between governments and private organizations and to thegrowing reach of international criminal and terrorist networks.

• GT 2015 includes a more careful examination of the likely role ofscience and technology as a driver of global developments. In addi-tion to the growing significance of information technology, biotech-nology and other technologies carry much more weight in thepresent assessment.

• The effect of the United States as the preponderant power is intro-duced in GT 2015. The US role as a global driver has emerged moreclearly over the past four years, particularly as many countriesdebate the impact of “US hegemony” on their domestic and foreignpolicies.

• GT 2015 provides a more complete discussion of natural resourcesincluding food, water, energy, and the environment. It discusses, forexample, the over three billion individuals who will be living inwater-stressed regions from North China to Africa and the implica-tions for conflict. The linkage between energy availability, price, anddistribution is more thoroughly explored.

• GT 2015 emphasizes interactions among the drivers. For example,we discuss the relationship between S&T, military developments,and the potential for conflict.

• In the regional sections, GT 2015 makes projections about theimpact of the spread of information, the growing power of China,and the declining power of Russia.

Events and trends in key states and regions over the last four yearshave led us to revise some projections substantially in GT 2015.

• GT 2010 did not foresee the global financial crisis of 1997-98;GT 2015 takes account of obstacles to economic development inEast Asia, though the overall projections remain fairly optimistic.

(continued)

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The Drivers and Trends

Demographics World population in 2015 will be 7.2 billion, up from 6.1 billion in the year2000, and in most countries, people will live longer. Ninety-five percent ofthe increase will be in developing countries, nearly all in rapidly expandingurban areas. Where political systems are brittle, the combination of popula-tion growth and urbanization will foster instability. Increasing lifespans willhave significantly divergent impacts.

• In the advanced economies—and a growing number of emerging marketcountries—declining birthrates and aging will combine to increase healthcare and pension costs while reducing the relative size of the workingpopulation, straining the social contract, and leaving significant shortfallsin the size and capacity of the work force.

• In some developing countries, these same trends will combine to expandthe size of the working population and reduce the youth bulge—increas-ing the potential for economic growth and political stability.

• As described in GT 2010, there is still substantial uncertaintyregarding whether China can cope with internal political and eco-nomic trends. GT 2015 highlights even greater uncertainty over thedirection of Beijing’s regional policies.

• Many of the global trends continue to remain negative for the societ-ies and regimes in the Middle East. GT 2015 projects at best a “coldpeace” between Israel and its adversaries and sees prospects forpotentially destabilizing social changes due to adverse effects of glo-balization and insufficient attention to reform. The spike in oil reve-nues reinforces the assessment of GT 2010 about the rising demandfor OPEC oil; these revenues are not likely to be directed primarilyat core human resources and social needs.

• Projections for Sub-Saharan Africa are even more dire than inGT 2010 because of the spread of AIDS and the continuing prospectsfor humanitarian crises, political instability, and military conflicts.

Revisiting Global Trends 2010: How Our Assessments Have Changed(continued)

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Natural Resourcesand Environment

Overall food production will be adequate to feed the world’s growing popu-lation, but poor infrastructure and distribution, political instability, andchronic poverty will lead to malnourishment in parts of Sub-Saharan Africa.The potential for famine will persist in countries with repressive govern-ment policies or internal conflicts. Despite a 50 percent increase in globalenergy demand, energy resources will be sufficient to meet demand; the lat-est estimates suggest that 80 percent of the world’s available oil and 95 per-cent of its gas remain underground.

• Although the Persian Gulf region will remain the world’s largest singlesource of oil, the global energy market is likely to encompass two rela-tively distinct patterns of regional distribution: one serving consumers(including the United States) from Atlantic Basin reserves; and the othermeeting the needs of primarily Asian customers (increasingly China andIndia) from Persian Gulf supplies and, to a lesser extent, the Caspianregion and Central Asia.

• In contrast to food and energy, water scarcities and allocation will posesignificant challenges to governments in the Middle East, Sub-SaharanAfrica, South Asia, and northern China. Regional tensions over water willbe heightened by 2015.

Science andTechnology

Fifteen years ago, few predicted the profound impact of the revolution ininformation technology. Looking ahead another 15 years, the world willencounter more quantum leaps in information technology (IT) and in otherareas of science and technology. The continuing diffusion of informationtechnology and new applications of biotechnology will be at the crest of thewave. IT will be the major building block for international commerce andfor empowering nonstate actors. Most experts agree that the IT revolutionrepresents the most significant global transformation since the IndustrialRevolution beginning in the mid-eighteenth century.

• The integration—or fusion—of continuing revolutions in informationtechnology, biotechnology, materials science, and nanotechnology willgenerate a dramatic increase in investment in technology, which will fur-ther stimulate innovation within the more advanced countries.

• Older technologies will continue lateral “sidewise development” into newmarkets and applications through 2015, benefiting US allies and adversar-ies around the world who are interested in acquiring early generation bal-listic missile and weapons of mass destruction (WMD) technologies.

• Biotechnology will drive medical breakthroughs that will enable theworld’s wealthiest people to improve their health and increase their lon-gevity dramatically. At the same time, genetically modified crops willoffer the potential to improve nutrition among the world’s one billion mal-nourished people.

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• Breakthroughs in materials technology will generate widely availableproducts that are multi-functional, environmentally safe, longer lasting,and easily adapted to particular consumer requirements.

• Disaffected states, terrorists, proliferators, narcotraffickers, and organizedcriminals will take advantage of the new high-speed information environ-ment and other advances in technology to integrate their illegal activitiesand compound their threat to stability and security around the world.

The Global Economyand Globalization

The networked global economy will be driven by rapid and largely unre-stricted flows of information, ideas, cultural values, capital, goods and ser-vices, and people: that is, globalization. This globalized economy will be anet contributor to increased political stability in the world in 2015, althoughits reach and benefits will not be universal. In contrast to the Industrial Rev-olution, the process of globalization is more compressed. Its evolution willbe rocky, marked by chronic financial volatility and a widening economicdivide.

• The global economy, overall, will return to the high levels of growthreached in the 1960s and early 1970s. Economic growth will be driven bypolitical pressures for higher living standards, improved economic poli-cies, rising foreign trade and investment, the diffusion of informationtechnologies, and an increasingly dynamic private sector. Potential brakeson the global economy—such as a sustained financial crisis or prolongeddisruption of energy supplies—could undo this optimistic projection.

• Regions, countries, and groups feeling left behind will face deepeningeconomic stagnation, political instability, and cultural alienation. Theywill foster political, ethnic, ideological, and religious extremism, alongwith the violence that often accompanies it. They will force the UnitedStates and other developed countries to remain focused on “old-world”challenges while concentrating on the implications of “new-world” tech-nologies at the same time.

National andInternationalGovernance

States will continue to be the dominant players on the world stage, but gov-ernments will have less and less control over flows of information, technol-ogy, diseases, migrants, arms, and financial transactions, whether licit orillicit, across their borders. Nonstate actors ranging from business firms tononprofit organizations will play increasingly larger roles in both nationaland international affairs. The quality of governance, both nationally andinternationally, will substantially determine how well states and societiescope with these global forces.

• States with competent governance, including the United States, will adaptgovernment structures to a dramatically changed global environment—making them better able to engage with a more interconnected world. The

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responsibilities of once “semiautonomous” government agencies increas-ingly will intersect because of the transnational nature of national securitypriorities and because of the clear requirement for interdisciplinary policyresponses. Shaping the complex, fast-moving world of 2015 will requirereshaping traditional government structures.

• Effective governance will increasingly be determined by the ability andagility to form partnerships to exploit increased information flows, newtechnologies, migration, and the influence of nonstate actors. Most but notall countries that succeed will be representative democracies.

• States with ineffective and incompetent governance not only will fail tobenefit from globalization, but in some instances will spawn conflicts athome and abroad, ensuring an even wider gap between regional winnersand losers than exists today.

Globalization will increase the transparency of government decision-mak-ing, complicating the ability of authoritarian regimes to maintain control,but also complicating the traditional deliberative processes of democracies.Increasing migration will create influential diasporas, affecting policies,politics and even national identity in many countries. Globalization alsowill create increasing demands for international cooperation on transna-tional issues, but the response of both states and international organizationswill fall short in 2015.

Future Conflict The United States will maintain a strong technological edge in IT-driven“battlefield awareness” and in precision-guided weaponry in 2015. TheUnited States will face three types of threats:

• Asymmetric threats in which state and nonstate adversaries avoid directengagements with the US military but devise strategies, tactics, and weap-ons—some improved by “sidewise” technology—to minimize USstrengths and exploit perceived weaknesses;

• Strategic WMD threats, including nuclear missile threats, in which (bar-ring significant political or economic changes) Russia, China, most likelyNorth Korea, probably Iran, and possibly Iraq have the capability to strikethe United States, and the potential for unconventional delivery of WMDby both states or nonstate actors also will grow; and

• Regional military threats in which a few countries maintain largemilitary forces with a mix of Cold War and post-Cold War concepts andtechnologies.

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The risk of war among developed countries will be low. The internationalcommunity will continue, however, to face conflicts around the world, rang-ing from relatively frequent small-scale internal upheavals to less frequentregional interstate wars. The potential for conflict will arise from rivalries inAsia, ranging from India-Pakistan to China-Taiwan, as well as among theantagonists in the Middle East. Their potential lethality will grow, driven bythe availability of WMD, longer-range missile delivery systems and othertechnologies.

Internal conflicts stemming from religious, ethnic, economic or politicaldisputes will remain at current levels or even increase in number. TheUnited Nations and regional organizations will be called upon to managesuch conflicts because major states—stressed by domestic concerns, per-ceived risk of failure, lack of political will, or tight resources—will mini-mize their direct involvement.

Export control regimes and sanctions will be less effective because of thediffusion of technology, porous borders, defense industry consolidations,and reliance upon foreign markets to maintain profitability. Arms and weap-ons technology transfers will be more difficult to control.

• Prospects will grow that more sophisticated weaponry, including weaponsof mass destruction—indigenously produced or externally acquired—willget into the hands of state and nonstate belligerents, some hostile to theUnited States. The likelihood will increase over this period that WMDwill be used either against the United States or its forces, facilities, andinterests overseas.

Role of the UnitedStates

The United States will continue to be a major force in the world community.US global economic, technological, military, and diplomatic influence willbe unparalleled among nations as well as regional and international organi-zations in 2015. This power not only will ensure America’s preeminence,but also will cast the United States as a key driver of the internationalsystem.

The United States will continue to be identified throughout the world as theleading proponent and beneficiary of globalization. US economic actions,even when pursued for such domestic goals as adjusting interest rates, willhave a major global impact because of the tighter integration of global mar-kets by 2015.

• The United States will remain in the vanguard of the technological revolu-tion from information to biotechnology and beyond.

• Both allies and adversaries will factor continued US military pre-emi-nence in their calculations of national security interests and ambitions.

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• Some states—adversaries and allies—will try at times to check what theysee as American “hegemony.” Although this posture will not translate intostrategic, broad-based and enduring anti-US coalitions, it will lead to tac-tical alignments on specific policies and demands for a greater role ininternational political and economic institutions.

Diplomacy will be more complicated. Washington will have greater diffi-culty harnessing its power to achieve specific foreign policy goals: the USGovernment will exercise a smaller and less powerful part of the overalleconomic and cultural influence of the United States abroad.

• In the absence of a clear and overriding national security threat, theUnited States will have difficulty drawing on its economic prowess toadvance its foreign policy agenda. The top priority of the American pri-vate sector, which will be central to maintaining the US economic andtechnological lead, will be financial profitability, not foreign policy objec-tives.

• The United States also will have greater difficulty building coalitions tosupport its policy goals, although the international community will oftenturn to Washington, even if reluctantly, to lead multilateral efforts in realand potential conflicts.

• There will be increasing numbers of important actors on the world stageto challenge and check—as well as to reinforce—US leadership: coun-tries such as China, Russia, India, Mexico, and Brazil; regional organiza-tions such as the European Union; and a vast array of increasinglypowerful multinational corporations and nonprofit organizations withtheir own interests to defend in the world.

Key Uncertainties: Technology Will Alter Outcomes

Examining the interaction of these drivers and trends points to some majoruncertainties that will only be clarified as events occur and leaders makepolicy decisions that cannot be foreseen today. We cite eight transnationaland regional issues for which the future, according to our trends analysis, istoo tough to call with any confidence or precision.

• These are high-stakes, national security issues that will require con-tinuous analysis and, in the view of our conferees, periodic policyreview in the years ahead.

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Science andTechnology

We know that the possibility is greater than ever that the revolution in sci-ence and technology will improve the quality of life. What we know aboutthis revolution is exciting. Advances in science and technology will gener-ate dramatic breakthroughs in agriculture and health and in leap-frog appli-cations, such as universal wireless cellular communications, which alreadyare networking developing countries that never had land-lines. What we donot know about the S&T revolution, however, is staggering. We do notknow to what extent technology will benefit, or further disadvantage, disaf-fected national populations, alienated ethnic and religious groups, or theless developed countries. We do not know to what degree lateral or “side-wise” technology will increase the threat from low technology countriesand groups. One certainty is that progression will not be linear. Another isthat as future technologies emerge, people will lack full awareness of theirwider economic, environmental, cultural, legal, and moral impact—or thecontinuing potential for research and development.

Advances in science and technology will pose national security challengesof uncertain character and scale.

• Increasing reliance on computer networks is making critical US infra-structures more attractive as targets. Computer network operations todayoffer new options for attacking the United States within its traditionalcontinental sanctuary—potentially anonymously and with selectiveeffects. Nevertheless, we do not know how quickly or effectively suchadversaries as terrorists or disaffected states will develop the tradecraft touse cyber warfare tools and technology, or, in fact, whether cyber warfarewill ever evolve into a decisive combat arm.

• Rapid advances and diffusion of biotechnology, nanotechnology, and thematerials sciences, moreover, will add to the capabilities of our adversar-ies to engage in biological warfare or bio-terrorism.

Asymmetric Warfare As noted earlier, most adversaries will recognize the information advantageand military superiority of the United States in 2015. Rather than acquiesceto any potential US military domination, they will try to circumvent or min-imize US strengths and exploit perceived weaknesses. IT-driven globaliza-tion will significantly increase interaction among terrorists, narcotraffickers,weapons proliferators, and organized criminals, who in a networked worldwill have greater access to information, to technology, to finance, to sophis-ticated deception-and-denial techniques and to each other. Such asymmetricapproaches—whether undertaken by states or nonstate actors—will becomethe dominant characteristic of most threats to the US homeland. They will

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be a defining challenge for US strategy, operations, and force development,and they will require that strategy to maintain focus on traditional, low-technology threats as well as the capacity of potential adversaries to harnesselements of proliferating advanced technologies. At the same time, we donot know the extent to which adversaries, state and nonstate, might be influ-enced or deterred by other geopolitical, economic, technological, or diplo-matic factors in 2015.

The Global Economy Although the outlook for the global economy appears strong, achievingbroad and sustained high levels of global growth will be contingent onavoiding several potential brakes to growth. These include:

The US economy suffers a sustained downturn. Given its large trade deficitand low domestic savings, the US economy—the most important driver ofrecent global growth—is vulnerable to a loss of international confidence inits growth prospects that could lead to a sharp downturn, which, if long last-ing, would have deleterious economic and policy consequences for the restof the world.

Europe and Japan fail to manage their demographic challenges. Europeanand Japanese populations are aging rapidly, requiring more than 110 millionnew workers by 2015 to maintain current dependency ratios between theworking population and retirees. Conflicts over social services or immigra-tion policies in major European states could dampen economic growth.

China and/or India fail to sustain high growth. China’s ambitious goals forreforming its economy will be difficult to achieve: restructuring state-owned enterprises, cleaning up and transforming the banking system, andcutting the government’s employment rolls in half. Growth would slow ifthese reforms go off-track. Failure by India to implement reforms wouldprevent it from achieving sustained growth.

Emerging market countries fail to reform their financial institutions. Manyemerging market countries have not yet undertaken the financial reformsneeded to help them survive the next economic crisis. Absent such reform, aseries of future economic crises in emerging market countries probably willdry up the capital flows crucial for high rates of economic growth.

Global energy supplies suffer a major disruption. Turbulence in globalenergy supplies would have a devastating effect. Such a result could bedriven by conflict among key energy-producing states, sustained internalinstability in two or more major energy-producing states, or major terroristactions.

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The Middle East Global trends from demography and natural resources to globalization andgovernance appear generally negative for the Middle East. Most regimes arechange-resistant. Many are buoyed by continuing energy revenues and willnot be inclined to make the necessary reforms, including in basic education,to change this unfavorable picture.

• Linear trend analysis shows little positive change in the region, raising theprospects for increased demographic pressures, social unrest, religiousand ideological extremism, and terrorism directed both at the regimes andat their Western supporters.

• Nonlinear developments—such as the sudden rise of a Web-connectedopposition, a sharp and sustained economic downturn, or, conversely, theemergence of enlightened leaders committed to good governance—mightchange outcomes in individual countries. Political changes in Iran in thelate 1990s are an example of such nonlinear development.

China Estimates of developments in China over the next 15 years are fraught withunknowables. Working against China’s aspirations to sustain economicgrowth while preserving its political system is an array of political, social,and economic pressures that will increasingly challenge the regime’s legiti-macy, and perhaps its survival.

• The sweeping structural changes required by China’s entry into the WorldTrade Organization (WTO) and the broader demands of economic global-ization and the information revolution will generate significantly new lev-els and types of social and economic disruption that will only add to analready wide range of domestic and international problems.

Nevertheless, China need not be overwhelmed by these problems. Chinahas proven politically resilient, economically dynamic, and increasinglyassertive in positioning itself for a leadership role in East Asia. Its long-termmilitary program in particular suggests that Beijing wants to have the capa-bility to achieve its territorial objectives, outmatch its neighbors, and con-strain US power in the region.

• We do not rule out the introduction of enough political reform by 2015 toallow China to adapt to domestic pressure for change and to continue togrow economically.

Two conditions, in the view of many specialists, would lead to a major secu-rity challenge for the United States and its allies in the region: a weak, dis-integrating China, or an assertive China willing to use its growing economicwealth and military capabilities to pursue its strategic advantage in the

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region. These opposite extremes bound a more commonly held view amongexperts that China will continue to see peace as essential to its economicgrowth and internal stability.

Russia Between now and 2015, Moscow will be challenged even more than todayto adjust its expectations for world leadership to its dramatically reducedresources. Whether the country can make the transition in adjusting ends tomeans remains an open and critical question, according to most experts, asdoes the question of the character and quality of Russian governance andeconomic policies. The most likely outcome is a Russia that remains inter-nally weak and institutionally linked to the international system primarilythrough its permanent seat on the UN Security Council. In this view,whether Russia can adjust to this diminished status in a manner that pre-serves rather than upsets regional stability is also uncertain. The stakes forboth Europe and the United States will be high, although neither will havethe ability to determine the outcome for Russia in 2015. Russian gover-nance will be the critical factor.

Japan The first uncertainty about Japan is whether it will carry out the structuralreforms needed to resume robust economic growth and to slow its declinerelative to the rest of East Asia, particularly China. The second uncertaintyis whether Japan will alter its security policy to allow Tokyo to maintain astronger military and more reciprocal relationship with the United States.Experts agree that Japanese governance will be the key driver in determin-ing the outcomes.

India Global trends conflict significantly in India. The size of its population—1.2billion by 2015—and its technologically driven economic growth virtuallydictate that India will be a rising regional power. The unevenness of itsinternal economic growth, with a growing gap between rich and poor, andserious questions about the fractious nature of its politics, all cast doubt onhow powerful India will be by 2015. Whatever its degree of power, India’srising ambition will further strain its relations with China, as well as com-plicate its ties with Russia, Japan, and the West—and continue its nuclearstandoff with Pakistan.

Key Challenges to Governance: People Will Decide

Global Trends 2015 identifies governance as a major driver for the futureand assumes that all trends we cite will be influenced, for good or bad, bydecisions of people. The inclusion of the United States as a driver—both theUS Government as well as US for-profit and nonprofit organizations—isbased on the general assumption that the actions of nonstate actors as wellas governments will shape global outcomes in the years ahead.

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An integrated trend analysis suggests at least four related conclusions:

National PrioritiesWill Matter

• To prosper in the global economy of 2015, governments will have toinvest more in technology, in public education, and in broader participa-tion in government to include increasingly influential nonstate actors. Theextent to which governments around the world are doing these thingstoday gives some indication of where they will be in 2015.

US ResponsibilitiesWill Cover the World,Old and New

• The United States and other developed countries will be challenged in2015 to lead the fast-paced technological revolution while, at the sametime, maintaining military, diplomatic, and intelligence capabilities todeal with traditional problems and threats from low-technology countriesand groups. The United States, as a global power, will have little choicebut to engage leading actors and confront problems on both sides of thewidening economic and digital divides in the world of 2015, when global-ization’s benefits will be far from global.

US Foreign PrioritiesWill be MoreTransnational

• International or multilateral arrangements increasingly will be calledupon in 2015 to deal with growing transnational problems from economicand financial volatility; to legal and illegal migration; to competition forscarce natural resources such as water; to humanitarian, refugee, andenvironmental crises; to terrorism, narcotrafficking, and weapons prolifer-ation; and to both regional conflicts and cyber threats. And when interna-tional cooperation—or international governance—comes up short, theUnited States and other developed countries will have to broker solutionsamong a wide array of international players—including governments atall levels, multinational corporations, and nonprofit organizations.

NationalGovernments Will beMore Transparent

• To deal with a transnational agenda and an interconnected world in 2015,governments will have to develop greater communication and collaborationbetween national security and domestic policy agencies. Interagency cooper-ation will be essential to understanding transnational threats and to develop-ing interdisciplinary strategies to counter them. Consequence managementof a biological warfare (BW) attack, for example, would require close coor-dination among a host of US Government agencies, foreign governments,US state and municipal governments, the military, the medical community,and the media.

Discussion

19

Global Trends 2015:A Dialogue About the FutureWith Nongovernment Experts

The international system in 2015 will beshaped by seven global drivers and relatedtrends: population; natural resources and theenvironment; science and technology; the glo-bal economy and globalization; national andinternational governance; the nature of conflict;and the role of the United States. These trendswill influence the capacities, priorities, andbehavior of states and societies and thussubstantially define the international securityenvironment.

Population Trends

The world in 2015 will be populated by some7.2 billion people, up from 6.1 billion in theyear 2000. The rate of world populationgrowth, however, will have diminished from1.7 percent annually in 1985, to 1.3 percenttoday, to approximately 1 percent in 2015.

Increased life expectancy and falling fertilityrates will contribute to a shift toward an agingpopulation in high-income developed countries.Beyond that, demographic trends will sharplydiverge. More than 95 percent of the increase inworld population will be found in developingcountries, nearly all in rapidly expanding urbanareas.

• India’s population will grow from 900 mil-lion to more than 1.2 billion by 2015; Paki-stan’s probably will swell from 140 millionnow to about 195 million.

• Some countries in Africa with high rates ofAIDS will experience reduced populationgrowth or even declining populations despiterelatively high birthrates. In South Africa, forexample, the population is projected to dropfrom 43.4 million in 2000 to 38.7 million in2015.

Russia and many post-Communist countries ofEastern Europe will have declining popula-tions. As a result of high mortality and lowbirthrates, Russia’s population may drop fromits current 146 million to as low as 130 to 135million in 2015, while the neighboring states ofCentral Asia will experience continued popula-tion growth. In Japan and West European coun-tries such as Italy and Spain, populations alsowill decline in the absence of dramaticincreases in birthrates or immigration.

• North America, Australia, and NewZealand—the traditional magnets formigrants—will continue to have the highestrates of population growth among the devel-oped countries, with annual population growthrates between 0.7 percent and 1.0 percent.

Divergent Aging PatternsIn developed countries and many of the moreadvanced developing countries, the decliningratio of working people to retirees will strainsocial services, pensions, and health systems.Governments will seek to mitigate the problemthrough such measures as delaying retirement,encouraging greater participation in the work

Los Angeles4,000,000

12,900,00014,200,000

Dhaka400,000

10,000,00019,000,000

Mexico City3,500,000

17,600,00019,000,000

New York12,000,00016,500,00017,600,000

Sao Paulo2,300,000

17,300,00019,000,000

Buenos Aires5,250,000

12,200,00013,900,000

Lagos1,000,000

12,200,00024,400,000

Cairo2,100,000

10,500,00014,400,000

Karachi1,100,000

11,000,00020,600,000

Mumbai2,800,000

16,900,00027,400,000

Calcutta4,450,000

12,500,00017,300,000

Jakarta2,800,0009,500,000

21,200,000

Shanghai4,300,000

13,900,00023,400,000

Tokyo6,200,000

27,700,00028,700,000

Beijing1,700,000

11,700,00019,400,000

Boundary representation isno necessarily authoritative.

DI Cartography Center 753949AI 12-00

Growth in Megaci t iesa

> 100 mi l l ion

50-100 mi l l ion

10-50 mi l l ion

< 10 mi l l ion

Population Growth, 1950-2000

aCities containing more than 10 million inhabitants.

Sources: The Nat ional Geographic Society and United Nat ions.

19502000 (est imate)2015 (project ion)

Population Growth of Largest Cities

I N D I I N D I A NA NO C E O C E A NA N

N O R T HN O R T H

A T L A T L A N T I CA N T I C

O C E O C E A NA N

SOUTHSOUTH

ATLANTICTLANTIC

OCEANOCEAN

ARCTIC OCEANARCTIC OCEANARCTIC OCEANARCTIC OCEAN

N O R T H

P A C I F I C

O C E A N

N O R T H

P A C I F I C

O C E A N

S O U T H

P A C I F I C

O C E A N

S O U T H

P A C I F I C

O C E A N

I N D I A NO C E A N

N O R T H

A T L A N T I C

O C E A N

SOUTH

ATLANTIC

OCEAN

ARCTIC OCEANARCTIC OCEAN

N O R T H

P A C I F I C

O C E A N

N O R T H

P A C I F I C

O C E A N

S O U T H

P A C I F I C

O C E A N

S O U T H

P A C I F I C

O C E A N

28

Nearly one-half of the world’s land surfaceconsists of river basins shared by more than onecountry, and more than 30 nations receive morethan one-third of their water from outside theirborders.

• Turkey is building new dams and irrigationprojects on the Tigris and Euphrates Rivers,which will affect water flows into Syria andIraq—two countries that will experience con-siderable population growth.

• Egypt is proceeding with a major diversion ofwater from the Nile, which flows from Ethio-pia and Sudan, both of which will want todraw more water from the Nile for their owndevelopment by 2015. Water-sharing arrange-ments are likely to become more contentious.

Water shortages occurring in combination withother sources of tension—such as in the MiddleEast—will be the most worrisome.

EnergyThe global economy will continue to becomemore energy efficient through 2015. Traditionalindustries, as well as transportation, areincreasingly efficient in their energy use. More-over, the most dynamic growth areas in the glo-bal economy, especially services and theknowledge fields, are less energy intensive thanthe economic activities that they replace.Energy production also is becoming more effi-cient. Technological applications, particularlyin deep-water exploration and production, areopening remote and hostile areas to petroleumproduction.

Sustained global economic growth, along withpopulation increases, will drive a nearly 50 per-cent increase in the demand for energy over thenext 15 years. Total oil demand will increasefrom roughly 75 million barrels per day in 2000

to more than 100 million barrels in 2015, anincrease almost as large as OPEC’s current pro-duction. Over the next 15 years, natural gasusage will increase more rapidly than that ofany other energy source—by more than 100percent—mainly stemming from the tripling ofgas consumption in Asia.

Asia will drive the expansion in energydemand, replacing North America as the lead-ing energy consumption region and accountingfor more than half of the world’s total increasein demand.

• China, and to a lesser extent India, will seeespecially dramatic increases in energy con-sumption.

• By 2015, only one-tenth of Persian Gulf oilwill be directed to Western markets; three-quarters will go to Asia.

Fossil fuels will remain the dominant form ofenergy despite increasing concerns about glo-bal warming. Efficiency of solar cells willimprove, genetic engineering will increase thelong-term prospects for the large-scale use ofethanol, and hydrates will be used increasinglyas fuels. Nuclear energy use will remain at cur-rent levels.

Meeting the increase in demand for energy willpose neither a major supply challenge nor leadto substantial price increases in real terms.Estimates of the world’s total endowment of oilhave steadily increased as technologicalprogress in extracting oil from remote sourceshas enabled new discoveries and more efficientproduction. Recent estimates indicate that 80percent of the world’s available oil still remainsin the ground, as does 95 percent of the world’snatural gas.

DI Cartography Center 754033AI 12-00

World Water Availability

1980

2000

2015Estimate

More than 20 - very high10 to 20 - h igh5 to 10 - average2 to 5 - low1 to 2 - very lowLess than 1 - catastrophical ly lowNo data

Water Avai labi l i ty(1,000m3/year per capi ta)

Source: Stockholm Environmental Inst i tute, 1997: Comprehensive Assessment of the Freshwater Resources of the World.

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EnvironmentContemporary environmental problems willpersist and in many instances grow over thenext 15 years. With increasingly intensive landuse, significant degradation of arable land willcontinue as will the loss of tropical forests.Given the promising global economic outlook,greenhouse gas emissions will increase sub-stantially. The depletion of tropical forests andother species-rich habitats, such as wetlandsand coral reefs, will exacerbate the historicallylarge losses of biological species now occur-ring.

• Environmental issues will become main-stream issues in several countries, particu-larly in the developed world. The consensuson the need to deal with environmental issueswill strengthen; however, progress in dealingwith them will be uneven.

The outlook to 2015 is mixed for such localizedenvironmental problems as high concentrationsof ozone and noxious chemicals in the air andthe pollution of rivers and lakes by industrialand agricultural wastes.

• Developed countries will continue to managethese local environmental issues, and suchissues are unlikely to constitute a major con-straint on economic growth or on improvinghealth standards.

• The developing countries, however, will faceintensified environmental problems as a resultof population growth, economic develop-ment, and rapid urbanization. An increasingnumber of cities will face the serious air andwater quality problems that already are trou-bling in such urban centers as Mexico City,Sao Paulo, Lagos, and Beijing.

• Russia and Ukraine will struggle with prob-lems stemming from decades of environmen-tal neglect and abuse, including widespread

radioactive pollution from badly managednuclear facilities. These problems areunlikely to be adequately addressed. As thesecountries pursue economic growth, they willdevote insufficient resources to environmen-tal remediation.

• Central and Eastern European countries facesimilar problems as a result of the legacy ofenvironmental neglect from the Communistera; nevertheless, driven by their desire togain EU membership, several will becomemore effective in addressing these problemsand will upgrade their environmentalstandards.

Some existing agreements, even when imple-mented, will not be able by 2015 to reverse thetargeted environmental damage they weredesigned to address. The Montreal Protocol ison track to restore the stratospheric ozone layerover the next 50 years. Nevertheless, the sea-sonal Antarctic ozone hole will expand for thenext two decades—increasing the risk of skincancer in countries like Australia, Argentina,and Chile—because of the long lag timebetween emission reductions and atmosphericeffects. Important new agreements will beimplemented, including, for example, a globaltreaty to control the worldwide spread of suchpersistent organic chemicals as DDT anddioxins. Other agreements, such as theConvention on Biodiversity, will fall shortin meeting their objectives.

Over the next 15 years the pressures on theenvironment as a result of economic growthwill decrease as a result of less energy-inten-sive economic development and technologicaladvances. For example, increased use of fuelcells and hybrid engines is likely to reduce therate of increase in the amount of pollution pro-duced, particularly in the transportation sector.Also, increases in the utilization of solar andwind power, advances in the efficiency of

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energy use, and a shift toward less pollutingfuels, such as natural gas, will contribute to thistrend.

Global warming will challenge the interna-tional community as indications of a warmingclimate—such as meltbacks of polar ice, sealevel rise, and increasing frequency of majorstorms—occur. The Kyoto Protocol on ClimateChange, which mandates emission-reductiontargets for developed countries, is unlikely tocome into force soon or without substantialmodification. Even in the absence of a formaltreaty, however, some incremental progress willbe made in reducing the growth of greenhousegas emissions.

• Both India and China will actively exploreless carbon-intensive development strategies,although they will resist setting targets ortimetables for carbon dioxide emission limits.

• A number of major firms operating interna-tionally will take steps to reduce greenhousegas emissions.

Science and Technology

The continuing diffusion of information tech-nology and new applications in the biotechnol-ogy field will be of particular globalsignificance. Two major trends will continue:

• The integration of existing disciplines toform new ones. The integration of informa-tion technology, biotechnology, materials sci-ences, and nanotechnology will generate adramatic increase in innovation. The effectswill be profound on business and commerce,public health, and safety.

• The lateral development of technology.Older established technologies will continue“sidewise” development into new markets

and applications, for example, developinginnovative applications for “old” computerchips.

The time between the discovery and the appli-cation of scientific advances will continue toshorten. Developments in the laboratory willreach commercial production at ever fasterrates, leading to increased investments.

Information Technology (IT)Over the next 15 years, a wide range of devel-opments will lead to many new IT-enableddevices and services. Rapid diffusion is likelybecause equipment costs will decrease at thesame time that demand is increasing. Local-to-global Internet access holds the prospect of uni-versal wireless connectivity via hand-helddevices and large numbers of low-cost, low-altitude satellites. Satellite systems and serviceswill develop in ways that increase performanceand reduce costs.

By 2015, information technology will makemajor inroads in rural as well as urban areasaround the globe. Moreover, information tech-nology need not be widespread to produceimportant effects. The first information tech-nology “pioneers” in each society will be thelocal economic and political elites, multiplyingthe initial impact.

• Some countries and populations, however,will fail to benefit much from the informationrevolution.

• Among developing countries, India willremain in the forefront in developing infor-mation technology, led by the growing classof high-tech workers and entrepreneurs.

• China will lead the developing world inutilizing information technology, with urbanareas leading the countryside. Beijing’scapacity to control or shape the content of

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information, however, is likely to be sharplyreduced.

• Although most Russian urban-dwellers willadopt information technologies well before2015, the adoption of such technologies willbe slow in the broader population.

• Latin America’s Internet market will growexponentially. Argentina, Mexico, and Brazilwill accrue the greatest benefits because oflarger telecommunications companies, biggermarkets, and more international investment.

• In Sub-Saharan Africa, South Africa is bestpositioned to make relatively rapid progressin IT.

Societies with advanced communications gen-erally will worry about threats to individual pri-vacy. Others will worry about the spread of“cultural contamination.” Governments every-where will be simultaneously asked to fosterthe diffusion of IT while controlling its “harm-ful” effects.

BiotechnologyBy 2015, the biotechnology revolution will bein full swing with major achievements in com-bating disease, increasing food production,reducing pollution, and enhancing the qualityof life. Many of these developments, especiallyin the medical field, will remain costly through2015 and will be available mainly in the Westand to wealthy segments of other societies.Some biotechnologies will continue to be con-troversial for moral and religious reasons.Among the most significant developments by2015 are:

• Genomic profiling—by decoding the geneticbasis for pathology—will enable the medicalcommunity to move beyond the descriptionof diseases to more effective mechanisms fordiagnosis and treatment.

• Biomedical engineering, exploiting advancesin biotechnology and “smart” materials, willproduce new surgical procedures and sys-tems, including better organic and artificialreplacement parts for human beings, and theuse of unspecialized human cells (stem cells)to augment or replace brain or body functionsand structures. It also will spur developmentof sensor and neural prosthetics such as reti-nal implants for the eye, cochlear implantsfor the ear, or bypasses of spinal and othernerve damage.

• Therapy and drug developments will curesome enduring diseases and counter trends inantibiotic resistance. Deeper understandingof how particular diseases affect people withspecific genetic characteristics will facilitatethe development and prescription of customdrugs.

• Genetic modification—despite continuingtechnological and cultural barriers—willimprove the engineering of organisms toincrease food production and quality, broadenthe scale of bio-manufacturing, and providecures for certain genetic diseases. Cloningwill be used for such applications as livestockproduction. Despite cultural and politicalconcerns, the use of genetically modifiedcrops has great potential to dramaticallyimprove the nutrition and health of many ofthe world’s poorest people.

• DNA identification will continue to improvelaw enforcement capabilities.

Other TechnologiesBreakthroughs in materials technology willgenerate widely available products that aresmart, multifunctional, environmentallycompatible, more survivable, and customizable.These products not only will contribute tothe growing information and biotechnology

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revolutions but also will benefit manufacturing,logistics, and personal lifestyles. Materials withactive capabilities will be used to combinesensing and actuation in response to environ-mental conditions.

Discoveries in nanotechnology will lead tounprecedented understanding and control overthe fundamental building blocks of all physicalthings. Developments in this emerging field arelikely to change the way almost everything—from vaccines to computers to automobile tiresto objects not yet imagined—is designed andmade. Self-assembled nanomaterials, such assemiconductor “quantum dots,” could by 2015revolutionize chemical labeling and enablerapid processing for drug discovery, blood con-tent analysis, genetic analysis, and other bio-logical applications.

The Global Economy

The global economy is well-positioned toachieve a sustained period of dynamismthrough 2015. Global economic growth willreturn to the high levels reached in the 1960sand early 1970s, the final years of the post-World War II “long boom.” Dynamism will bestrongest among so-called “emerging mar-kets”—especially in the two Asian giants,China and India—but will be broadly basedworldwide, including in both industrialized andmany developing countries. The rising tide ofthe global economy will create many economicwinners, but it will not lift all boats. The infor-mation revolution will make the persistence ofpoverty more visible, and regional differenceswill remain large.

Dynamism and GrowthFive factors will combine to promote wide-spread economic dynamism and growth:

Political pressures for higher living standards.The growing global middle class—now 2 bil-lion strong—is creating a cycle of rising aspira-tions, with increased information flows and thespread of democracy giving political clout toformerly disenfranchised citizens.

Improved macroeconomic policies. The wide-spread improvement in recent years in eco-nomic policy and management sets the stagefor future dynamism. Inflation rates have beendramatically lowered across a wide range ofeconomies. The abandonment of unsustainablefixed exchange rate regimes in Asia and thecreation of the European Monetary Union(EMU) will contribute to economic growth.

Rising trade and investment. Internationaltrade and investment flows will grow, spurringrapid increases in world GDP. Opposition tofurther trade liberalization from special interestgroups and some governments will not erodethe basic trend toward expansion of trade. Inter-national capital flows, which have risen dramat-ically in the past decade, will remain plentiful,especially for emerging market countries thatincrease their transparency.

Diffusion of information technology. The per-vasive incorporation of information technolo-gies will continue to produce significantefficiency gains in the US economy. Similargains will be witnessed—albeit in varyingdegrees—in numerous other countries as the

35

integration of these technologies proceeds. Butthe absorption of IT and its benefits will not beautomatic because many countries will fail tomeet the conditions needed for effective IT uti-lization—high educational levels, adequateinfrastructure, and appropriate regulatory poli-cies.

Increasingly dynamic private sectors. Rapidexpansion of the private sector in many emerg-ing market countries—along with deregulationand privatization in Europe and Japan—willspur economic growth by generatingcompetitive pressures to use resources moreefficiently. The impact of improved efficiencieswill be multiplied as the information revolutionenhances the ability of firms around the worldto learn “best practices” from the most success-ful enterprises. Indeed, the world may be on the

verge of a rapid convergence in market-basedfinancial and business practices.

Unequal Growth Prospects and DistributionThe countries and regions most at risk of fallingbehind economically are those with endemicinternal and/or regional conflicts and those thatfail to diversify their economies. The econo-mies of most states in Sub-Saharan Africa andthe Middle East and some in Latin Americawill continue to suffer. A large segment of theEurasian landmass extending from Central Asiathrough the Caucasus to parts of southeasternEurope faces dim economic prospects. Withincountries, the gap in the standard of living alsowill increase. Even in rapidly growing coun-tries, large regions will be left behind.

36

Emerging Asia will be the fastest growingregion, led by breakout candidates China andIndia, whose economies already compriseroughly one-sixth of global GDP. To the degreethat China implements reforms mandated by itsentry into the World Trade Organization, itseconomy will become more efficient, enablingrapid growth to continue. China’s economicdevelopment, however, will be mainly in thedynamic coastal provinces. Agricultural prov-inces in northern and western China will lagbehind, causing social tensions that Beijing willbe challenged to manage. India’s relativelystrong educational system, democracy, andEnglish-language skills position it well to takeadvantage of gains related to information

technology. India nevertheless faces enormouschallenges in spreading the benefits of growth tohundreds of millions of impoverished, often illit-erate citizens, particularly in the northern states.

In Europe and Japan, the picture is mixed.Western Europe is likely to narrow what hasbeen a growing economic performance gapwith the United States, and Eastern Europeancountries, eager for EU membership, generallywill adopt reform policies and grow apace.South-Eastern Europe will improve economicprospects only gradually as it improvesregional security. Although Japan’s economicperformance in the next 15 years will be

37

stronger than that of the 1990s, its relativeimportance in the global economy willdecrease. Economic prospects for Russia andEurasia are not promising.

Latin America will manage fairly rapid aggre-gate growth, but it will be spread unevenlyacross the region. The market-orienteddemocracies in Mexico and the southern conewill lead the way. A new generation of entre-preneurs will be inclined to favor additionalmarket openings, but the benefits may furtherdistort income distribution, already the mostinequitable in the world. Elsewhere, theAndean region will struggle with a poorly

educated labor force, unstable governance, anddependence upon commodities such as oil, cop-per, and narcotics.

The Middle East and North Africa will bemarked by increasing internal differentiation assome countries respond more effectively to thechallenges of globalization or to the uncertain-ties of closer integration with the EU while oth-ers lag. In Sub-Saharan Africa, persistentconflicts and instability, autocratic and corruptgovernments, overdependence on commoditieswith declining real prices, low levels of educa-tion, and widespread infectious diseases willcombine to prevent most countries from experi-encing rapid economic growth.

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Economic Crises and ResilienceThe global economy will be prone to periodicfinancial crises, but its capacity to correct itselfwill remain strong. The rapid rebound from theglobal financial crisis of 1997-98, the limitedimpact of the recent tripling of oil prices onglobal economic growth, and the successfulmanagement of the “Y2K” problem are themost recent manifestations of resilience. None-theless, economic liberalization and globaliza-tion entail risks and inevitably will createbumps in the road, some of them potentiallyhighly disruptive.

• Economic crises will recur. The trendstoward free markets and deregulation will

allow financial markets to overshoot, increasethe possibility for sudden reversal in senti-ment, and expose individual countries tobroad swings in the global market. Any ofthese could trigger a financial crisis.

• Turbulence in one economy will affect oth-ers. Increased trade links and the integrationof global financial markets will quickly trans-mit turmoil in one economy regionally andinternationally, as Russia’s financial turmoilin 1998 affected Brazil.

• Disputes over international economic rules.The Asian financial crisis revealed differ-ences among countries regarding globalfinancial architecture. As emerging marketcountries continue to grow, they will seek astronger voice in setting the terms of interna-tional economic governance. A lack of con-sensus could at times make financial marketsskittish and undermine growth.

National and International Governance

The state will remain the single most importantorganizing unit of political, economic, andsecurity affairs through 2015 but will confrontfundamental tests of effective governance. Thefirst will be to benefit from, while coping with,several facets of globalization. The second willbe to deal with increasingly vocal and orga-nized publics.

• The elements of globalization—greater andfreer flow of information, capital, goods, ser-vices, people, and the diffusion of power tononstate actors of all kinds—will challengethe authority of virtually all governments. Atthe same time, globalization will createdemands for increased international coopera-tion on transnational issues.

The Role of Education

Education will be determinative of successin 2015 at both the individual and countrylevels. The globalizing economy and tech-nological change inevitably place anincreasing premium on a more highlyskilled labor force. Adult literacy andschool enrollments will increase in almostall countries. The educational gender gapwill narrow and probably will disappearin East and Southeast Asia and LatinAmerica.

• Progress will vary among regions, coun-tries, and social groups, triggeringincreased income inequalities within aswell as among countries.

• School enrollments will decline in themost highly impoverished countries, inthose affected by serious internal con-flicts, and in those with high rates ofinfectious diseases.

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Alternative Trajectories

Although the outlook for the global economyappears quite strong, achieving sustainedhigh levels of global growth will be contin-gent on avoiding several potential brakes togrowth. Five are described below.

The US economy suffers a sustained down-turn. Given the large trade deficit and lowdomestic savings, the US economy—the mostimportant driver of recent global growth—isvulnerable to loss of international confidencein its growth prospects that could lead to asharp downturn, which, if long-lasting, wouldhave deleterious economic and policy conse-quences for the rest of the world. Key tradingpartners would suffer as the world’s largestmarket contracted, and international finan-cial markets might face profound instability.

Europe and Japan fail to manage theirdemographic challenges. European and Jap-anese populations are aging rapidly, requir-ing more than 110 million new workers by2015 to maintain current dependency ratiosbetween the working population and retirees.For these countries, immigration is a contro-versial means of meeting these labor forcerequirements. Conflicts over the social con-tract or immigration policies in major Euro-pean states could dampen economic growth.Japan faces an even more serious labor forceshortage and its strategies for responding—enticing overseas Japanese to return, broad-ening the opportunities for women, andincreasing investments elsewhere in Asia—may prove inadequate. If growth in Europeand Japan falters, the economic burden on theUS economy would increase, weakening theoverall global outlook.

China and/or India fail to sustain highgrowth. China’s ambitious goals for reform-ing its economy will be difficult to realize:restructuring state-owned enterprises, clean-ing up and transforming the banking system,cutting the government’s employment rolls inhalf, and opening up the economy to greaterforeign competition. Growth would slow ifthese reforms go awry, which, in turn, wouldexacerbate bureaucratic wrangling andincrease opposition to the reform agenda.India’s reform drive—essential to sustainedeconomic growth—could be sidetracked bysocial divisions and by the bureaucratic cul-ture of the public service.

Emerging market countries fail to reformtheir financial institutions. Although mostemerging market countries bounced backfrom the 1997-98 financial crisis morequickly than expected, many have not yetundertaken the financial reforms needed tohelp them survive the next economic crisis.Absent such reform, a series of future eco-nomic crises in emerging market countriescould dry up the capital flows crucial forhigh rates of economic growth.

Global energy supplies are disrupted in amajor way. Although the world economy isless vulnerable to energy price swings thanin the 1970s, a major disruption in globalenergy supplies still would have a devastat-ing effect. Conflict among key energy-pro-ducing states, sustained internal instabilityin two or more major energy-producingstates, or major terrorist actions could leadto such a disruption.

40

• All states will confront popular demands forgreater participation in politics and attentionto civil rights—pressures that will encouragegreater democratization and transparency.Twenty-five years ago less than a third ofstates were defined as democracies by Free-dom House; today more than half of states areconsidered democracies, albeit with varyingcombinations of electoral and civil or politi-cal rights. The majority of states are likely toremain democracies in some sense over thenext 15 years, but the number of new democ-racies that are likely to develop is uncertain.

Successful states will interact with nonstateactors to manage authority and share responsi-bility. Between now and 2015, three importantchallenges for states will be:

• Managing relations with nonstate actors;

• Combating criminal networks; and

• Responding to emerging and dynamic reli-gious and ethnic groups.

Nonstate ActorsStates continually will be dealing with private-sector organizations—both for-profit and non-profit. These nonstate actors increasingly willgain resources and power over the next 15 yearsas a result of the ongoing liberalization of glo-bal finance and trade, as well as the opportuni-ties afforded by information technology.

The For-profit Sector. The for-profit businesssector will grow rapidly over the next 15 years,spearheading legal and judicial reform andchallenging governments to become moretransparent and predictable. At the same time,governments will be challenged to monitor andregulate business firms through measures con-sistent with local standards of social welfare.

Multinational corporations—now numberingmore than 50,000 with nearly one-half millionaffiliates—have multiplied in recent years asgovernments have deregulated their economies,privatized state-owned enterprises, and liberal-ized financial markets and trade. This trend willcontinue.

Medium-sized, mostly local firms will multiplyin many countries, driven by the shift awayfrom Communism and other socialist modelsand the broadening of financial services andbanking systems. Micro-enterprises also willmultiply, not only because of deregulation andliberalization, but also because many states willhave a declining capacity to stymie small-scalecommercial activities. As medium-sized andsmall businesses become more numerous, theywill encourage, and then link into, various glo-bal networks.

The Nonprofit Sector. Nonprofit networks withaffiliates in more than one country will growthrough 2015, having expanded more than 20-fold between 1964 and 1998. Within individualcountries, the nonprofit sector also will expandrapidly.

Over the next 15 years international andnational nonprofits will not only expand butchange in significant ways.

• Nonprofit organizations will have moreresources to expand their activities and willbecome more confident of their power andmore confrontational. Nonprofits will movebeyond delivering services to the design andimplementation of policies, whether as part-ners or competitors with corporations andgovernments.

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• Western preponderance will persist but at adeclining level as economic growth in Asiaand Latin America produces additionalresources for support of civil society. In addi-tion, autocratic governments and Islamicstates or groups will increasingly supportnonprofit groups sympathetic to theirinterests.

• Nonprofit organizations will be expected tomeet codes of conduct. Governments and cor-porations—which are increasingly held tostandards of transparency and accountabil-ity—will, in turn, expect nonprofits to meetsimilar standards.

Criminal Organizations and NetworksOver the next 15 years, transnational criminalorganizations will become increasingly adept atexploiting the global diffusion of sophisticatedinformation, financial, and transportationnetworks.

Criminal organizations and networks based inNorth America, Western Europe, China,Colombia, Israel, Japan, Mexico, Nigeria, andRussia will expand the scale and scope of theiractivities. They will form loose alliances withone another, with smaller criminal entrepre-neurs, and with insurgent movements for spe-cific operations. They will corrupt leaders ofunstable, economically fragile or failing states,insinuate themselves into troubled banks andbusinesses, and cooperate with insurgent politi-cal movements to control substantial geo-graphic areas. Their income will come fromnarcotics trafficking; alien smuggling; traffick-ing in women and children; smuggling toxicmaterials, hazardous wastes, illicit arms, mili-tary technologies, and other contraband; finan-cial fraud; and racketeering.

• The risk will increase that organized criminalgroups will traffic in nuclear, biological, orchemical weapons. The degree of riskdepends on whether governments with WMDcapabilities can or will control such weaponsand materials.

Changing Communal Identities andNetworksTraditional communal groups—whether reli-gious or ethnic-linguistic groups—will pose arange of challenges for governance. Usingopportunities afforded by globalization and theopening of civil society, communal groups willbe better positioned to mobilize coreligionistsor ethnic kin to assert their interests or defendagainst perceived economic or political dis-crimination. Ethnic diasporas and coreligionistsabroad also will be more able and willing toprovide fraternal groups with political, finan-cial, and other support.

The Role of the Nonprofit Sector

Nonprofit organizations deliver criticalservices to individuals and private groups,with 67 percent of nonprofit activities inhealth, education, and social servicesalone. They provide information andexpertise, advocate policies on behalf oftheir interests, and work through interna-tional organizations, both as implement-ing partners and as advocates. In manydevelopment projects and humanitarianemergencies, nonprofits will continue todeliver most of the aid from governmentsand international organizations.

DI Cartography Center 753989AI 12-00

Source: US Government

Cocaine

Heroin

Illegalmigrants

Women andchildren

Trafficking Flows

Growing AreasCoca

Opium poppy

Current World Illicit Trafficking

Boundary representation isno necessarily authoritative.

I N D I A NO C E A N

N O R T H

A T L A N T I C

O C E A N

SOUTH

ATLANTIC

OCEAN

ARCTIC OCEANARCTIC OCEAN

N O R T H

P A C I F I C

O C E A NN O R T H

P A C I F I C

O C E A N

S O U T H

P A C I F I C

O C E A N

S O U T H

P A C I F I C

O C E A N

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discriminate against communal minorities.Such conditions will foment ethnic tensionsin Sub-Saharan Africa, Central and SouthAsia, and parts of the Middle East, often inrapidly growing urban areas. Certain power-ful states—such as Russia, China, Brazil, andIndia—also are likely to repress politicizedcommunal minorities.

• Religious, often fused with ethnic, griev-ances. Few Muslim states will grant fullpolitical and cultural rights to religiousminorities. At the same time, they will notremain indifferent to the treatment of Muslimminorities elsewhere: in Russia, Indonesia,India/Kashmir, China, and the Balkans. Otherreligious denominations also will supportbeleaguered coreligionists.

• Resistance to migration. Some relativelyhomogenous countries or sub-regions in Asiaand Europe will resist ethnically diversemigrants, creating tensions.

• Indigenous protest movements. Such move-ments will increase, facilitated by transna-tional networks of indigenous rights activistsand supported by well-funded internationalhuman rights and environmental groups.Tensions will intensify in the area fromMexico through the Amazon region; north-eastern India; and the Malaysian-Indonesianarchipelago.

Overall Impact on StatesThe developed democracies will be best posi-tioned for good governance because they willtend to empower legitimate nonstate actors inboth the for-profit and nonprofit sectors; willfavor institutions and processes that accommo-date divergent communal groups; will press fortransparency in government and the efficientdelivery of public services; and will maintaininstitutions to regulate legitimate for-profit and

nonprofit organizations and control illegitimatecriminal groups. Countries in Western Europe,Canada, Australia, New Zealand, and Japanhave the requisite agility and institutions tomeet the challenges. Countries in EasternEurope as well as Turkey, South Korea, India,Chile, and Brazil, among other developingcountries, are moving in these directions,despite some continuing obstacles.

Some newly democratic states and modernizingauthoritarian states will have leaders amenableto technological change and access to substan-tial human and financial resources. They willencourage business firms, nonprofits, and com-munal groups supportive of the government anddiscourage or suppress those that are indepen-dent-minded or critical of government policies.They will have some success in coping with theenergy, ideas, and resources of nonstate actors.Several Asian countries, such as Singapore,Taiwan, and perhaps China, as well as somestates in the Middle East and Latin America arelikely to take this approach.

Other states in varying degrees will lack theresources and leadership to achieve effectivegovernance. Most autocratic states in the Mid-dle East and Africa will not have the institu-tions or cultural orientation to exploit theopportunities provided by nonstate actors—apart from certain forms of humanitarian assis-tance. In many of these countries, nonstateactors will become more important than gov-ernments in providing services, such as healthclinics and schools. In the weakest of thesecountries, communal, criminal, or terroristgroups will seek control of government institu-tions and/or territory.

Overall, the number of states—which has morethan tripled since 1945 and has grown 20 per-cent since 1990—is likely to increase at a

47

slower rate through 2015. This growth willresult from remaining cases of decolonizationand to communal tensions leading to statesecession, most likely in Sub-Saharan Africa,Central Asia, and Indonesia. In some cases,new states will inspire other secessionist move-ments, destabilizing countries where minoritieswere not initially seeking secession.

At the same time, the very concept of “belong-ing” to a particular state probably will erodeamong a growing number of people with con-tinuing transnational ties to more than onecountry through citizenship, residence or otherassociations.

International CooperationGlobalization and technological change areraising widespread expectations that increasedinternational cooperation will help managemany transnational problems that states can nolonger manage on their own. Efforts to realizesuch expectations will increase, but concernsabout national interests as well as the costs andrisks involved in some types of internationalactivism will limit success.

Mechanisms of international cooperation—intended to facilitate bargaining, elucidatecommon interests and resolve differencesamong states—have increased rapidly in recentdecades.

• International treaties registered with theUnited Nations more than tripled between1970 and 1997. In addition, there are growingnumbers of agreements on standards andpractices initiated by self-selected privatenetworks.

• The number of international institutionsincreased by two-thirds from 1985 until1999, while at the same time becoming more

complex, more interrelated with often over-lapping areas of responsibility, and moreclosely linked to transnational networks andprivate groups.

International cooperation will continue toincrease through 2015, particularly when largeeconomic stakes have mobilized the for-profitsector, and/or when there is intense interestfrom nonprofit groups and networks.

Most high-income democratic states will par-ticipate in multiple international institutionsand seek cooperation on a wide range of issuesto protect their interests and to promote theirinfluence. Members of the European Union willtackle the most ambitious agenda, includingsignificant political and security cooperation.

Strongly nationalistic and/or autocratic stateswill play selective roles in inter-governmentalorganizations: working within them to protectand project their interests, while workingagainst initiatives that they view as threateningto their domestic power structures and nationalsovereignty. They will also work against thoseinternational institutions viewed as creatures ofthe established great powers and thus riggedagainst them—such as the IMF and the WTO—as well as those that cede a major role to non-state actors.

Low-income developing countries will partici-pate actively in international organizations andarrangements to assert their sovereignty, garnerresources for social and economic develop-ment, and gain support for the incumbent gov-ernment. The most unstable of these states willparticipate in international organizations andarrangements primarily to maintain interna-tional recognition for the regime.

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Agenda for International Cooperation

Cooperation is likely to be effective in suchareas as:

• Monitoring international financial flowsand financial safehavens.

• Law enforcement against corruption, andagainst trafficking in narcotics and womenand children.

• Monitoring meteorological data and warn-ing of extreme weather events.

• Selected environmental issues, such asreducing substances that deplete the ozonelayer or conserving high-seas fisheries.

• Developing vaccines or medicines againstmajor infectious diseases, such as HIV/AIDS or malaria and surveillance of infec-tious disease outbreaks.

• Humanitarian assistance for refugees andfor victims of famines, natural disasters,and internal conflicts where relief organi-zations can gain access.

• Counterterrorism.

• Efforts by international and regional orga-nizations to resolve some internal andinterstate conflicts, particularly in Africa.

Cooperation is likely to be contentious andwith mixed results in such areas as:

• Conditions under which Intellectual Prop-erty Rights are protected.

• Reform and strengthening of internationalfinancial institutions, particularly the Bret-ton Woods institutions.

• Expansion of the UN Security Council.

• Adherence by major states to an Interna-tional Criminal Court with universal, com-prehensive jurisdiction.

• Control of greenhouse gas emissions toreduce global warming, carrying out thepurposes of the 1997 Kyoto Protocol onClimate Change.

• Acceptance of genetically-modified organ-isms to improve nutrition and health inpoor regions.

• Establishing peacekeeping forces andstandby military forces under the authorityof the UN Security Council or mostregional organizations, with the possibleexception of the EU.

(continued)

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Future Conflict

Through 2015, internal conflicts will pose themost frequent threat to stability around theworld. Interstate wars, though less frequent,will grow in lethality due to the availability ofmore destructive technologies. The interna-tional community will have to deal with themilitary, political, and economic dimensions ofthe rise of China and India and the continueddecline of Russia.

Internal ConflictsMany internal conflicts, particularly those aris-ing from communal disputes, will continue tobe vicious, long-lasting and difficult to termi-nate—leaving bitter legacies in their wake.

• They frequently will spawn internal displace-ments, refugee flows, humanitarian emergen-cies, and other regionally destabilizingdislocations.

• If left to fester, internal conflicts will triggerspillover into inter-state conflicts as neighbor-ing states move to exploit opportunities forgain or to limit the possibilities of damage totheir national interests.

• Weak states will spawn recurrent internalconflicts, threatening the stability of a global-izing international system.

Internal conflicts stemming from state repres-sion, religious and ethnic grievances, increas-ing migration pressures, and/or indigenousprotest movements will occur most frequentlyin Sub-Saharan Africa, the Caucasus and Cen-tral Asia, and parts of south and southeast Asia,Central America and the Andean region.

• Military action by forces authorized bythe United Nations to correct abuses ofhuman rights within states, pursuant toan asserted principle of humanitarianintervention or an expanded right ofsecession. Although “coalitions of thewilling” will undertake such operationsfrom time to time, a significant numberof states will continue to view such inter-ventions as illegitimate interference inthe internal affairs of sovereign states.

• Proposed new rights to enjoy or appro-priate elements of the “global com-mons,” such as a right to “openborders” for people from lower-incomecountries.

Agenda for International Cooperation(mixed results continued)

DI Cartography Center 753977AI 12-00

Current Ethnic Diversi ty of States

High: ranked below 0.25 on index of ethnic concentrat ion

Medium: ranked between 0.25 and 0.70 on index of ethnic concentrat ion

Low: ranked at or greater than 0.70 on index of ethnic concentrat ion

No data

Ethnic Diversity a

aCalculated in the Herf indahl index from data on ethnic composi t ion f rom the Correlates of War project , census est imates, or other unclassi f ied sources; data for the Uni ted States are f rom the US Bureau of the Census Stat ist ical Abstract of the Uni ted States, 1998. Other data are der ived from the State Fai lure Project .

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• Russia’s decline. By 2015, Russia will bechallenged even more than today to adjust itsexpectations for world leadership to the dra-matically reduced resources it will have toplay that role. The quality of Russian gover-nance is an open question as is whether thecountry will be able to make the transition ina manner that preserves rather than upsetsregional stability.

• Japan’s uncertainty. In the view of manyexperts, Japan will have difficulty maintain-ing its current position as the world’s thirdlargest economy by 2015. Tokyo has so farnot shown a willingness to carry through thepainful economic reforms necessary to slowthe erosion of its leadership role in Asia. Inthe absence of an external shock, Japan issimilarly unlikely to accelerate changes insecurity policy.

• India’s prospects. India will strengthen itsrole as a regional power, but many uncertain-ties about the effects of global trends on itssociety cast doubt on how far India will go.India faces growing extremes between wealthand poverty, a mixed picture on naturalresources, and problems with internal gover-nance.

The changing dynamics of state power will com-bine with other factors to affect the risk of con-flict in various regions. Changing militarycapabilities will be prominent among the factorsthat determine the risk of war. In South Asia, forexample, that risk will remain fairly high overthe next 15 years. India and Pakistan are bothprone to miscalculation. Both will continue tobuild up their nuclear and missile forces.

India most likely will expand the size of itsnuclear-capable force. Pakistan’s nuclear andmissile forces also will continue to increase.

Islamabad has publicly claimed that the num-ber of nuclear weapons and missiles it deployswill be based on “minimum” deterrence andwill be independent of the size of India’s arse-nal. A noticeable increase in the size of India’sarsenal, however, would prompt Pakistan tofurther increase the size of its own arsenal.

Russia will be unable to maintain conventionalforces that are both sizable and modern or toproject significant military power with conven-tional means. The Russian military willincreasingly rely on its shrinking strategic andtheater nuclear arsenals to deter or, if deter-rence fails, to counter large-scale conventionalassaults on Russian territory.

• Moscow will maintain as many strategic mis-siles and associated nuclear warheads as itbelieves it can afford but well short of STARTI or II limitations. The total Russian force by2015, including air launched cruise missiles,probably will be below 2,500 warheads.

As Russia struggles with the constraints on itsambitions, it will invest scarce resources inselected and secretive military technology pro-grams, especially WMD, hoping to counterWestern conventional and strategic superiorityin areas such as ballistic missile defense.

China’s People’s Liberation Army (PLA) willremain the world’s largest military, but themajority of the force will not be fully modern-ized by 2015. China could close the technologi-cal gap with the West in one or more majorweapons systems. China’s capability forregional military operations is likely to improvesignificantly by 2015.

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• China will be exploiting advanced weaponsand production technologies acquired fromabroad—Russia, Israel, Europe, Japan, andthe United States—that will enable it to

integrate naval and air capabilities againstTaiwan and potential adversaries in the SouthChina Sea.

China: How to Think About Its GrowingWealth and Power

China has been riding the crest of a signifi-cant wave of economic growth for twodecades. Many experts assess that China canmaintain a growth rate of 7 percent or morefor many years. Such impressive rates pro-vide a foundation for military potential, andsome predict that China’s rapid economicgrowth will lead to a significant increase inmilitary capabilities. But the degree to whichan even more powerful economy wouldtranslate into greater military power isuncertain.

The relationship between economic growthand China’s overall power will derive fromthe priorities of leaders in Beijing—providedthe regime remains stable. China’s leadershave assessed for some years that compre-hensive national power derives both fromeconomic strength and from the military anddiplomatic resources that a healthy, largeeconomy makes possible. They apparentlyagree that, for the foreseeable future, suchpriorities as agricultural and national infra-structure modernization must take prece-dence over military development. In theabsence of a strong national security chal-lenge, this view is unlikely to change even asnew leaders emerge in Beijing. In a stableenvironment, two leadership transitions willoccur in China between now and 2015. The

evidence strongly suggests that the new lead-ers will be even more firmly committed todeveloping the economy as the foundationof national power and that resources formilitary capabilities will take a secondaryrole. Existing priorities and projecteddefense allocations could enable the PLAto emerge as the most powerful regionalmilitary force.

• Beyond resource issues, China faces daunt-ing challenges in producing defense sys-tems. Beijing has yet to demonstrate anassured capacity to translate increasinglysophisticated science and technologyadvances into first-rate military produc-tion. To achieve this, China must effectreforms in its State Owned Enterprises(SOEs), develop a capacity for advancedsystems integration skills, and recruit andretain technologically sophisticatedofficers and enlisted personnel.

A decision to alter priorities to emphasizemilitary development would require substan-tial change in the leadership. Internal insta-bility or a rise in nationalism could producesuch change but also probably would resultin economic decline.

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• In the event of a peaceful resolution of theTaiwan issue, some of China’s military objec-tives—such as protecting the sea lanes forPersian Gulf oil—could become more con-gruent with those of the United States. Never-theless, as an emerging regional power, Chinawould continue to expand its influence with-out regard to US interests.

• China by 2015 will have deployed tens toseveral tens of missiles with nuclear war-heads targeted against the United States,mostly more survivable land- and sea-basedmobile missiles. It also will have hundreds ofshorter-range ballistic and cruise missiles foruse in regional conflicts. Some of theseshorter-range missiles will have nuclear war-heads; most will be armed with conventionalwarheads.

Japan has a small but modern military force,more able than any other in Asia to integratelarge quantities of new weaponry. Japan’sfuture military strength will reflect the state ofits economy and the health of its security rela-tionship with the United States. Tokyo willincreasingly pursue greater autonomy in secu-rity matters and develop security enhance-ments, such as defense improvements andmore active diplomacy, to supplement the USalliance.

A unified Korea with a significant US militarypresence may become a regional militarypower. For the next 10 to 15 years, however,knowledgeable observers suggest that the pro-cess of unification will consume South Korea’senergies and resources.

Absent unification, North Korea’s WMD capa-bilities will continue to cloud regional stability.P’yongyang probably has one, possibly two,

nuclear weapons. It has developed medium-range missiles for years and has tested a three-stage space launch vehicle.

P’yonyang may improve the accuracy, range,and payload capabilities of its Taepo Dong-2ICBM, deploy variants, or develop more capa-ble systems. North Korea could have a few toseveral Taepo Dong-2 type missiles deployedby 2005.

In the Middle East, the confluence of domesticeconomic pressures and regional rivalries islikely to further the proliferation of weapons ofmass destruction and the means to deliverthem. By contrast, spending on conventionalarms probably will remain stable or decline inmost countries. Some governments may main-tain large armed forces to absorb otherwiseunemployable youths, but such armies will beless well trained and equipped. Rather thanconventional war, the region is likely to experi-ence more terrorism, insurgencies, and humani-tarian emergencies arising from internaldisparities or disputes over ethnic or religiousidentity.

• Iran sees its short- and medium-range mis-siles as deterrents, as force-multiplyingweapons of war, primarily with conventionalwarheads, and as options for delivering bio-logical, chemical, and eventually nuclearweapons. Iran could test an IRBM or land-attack cruise missile by 2004 and perhapseven an ICBM or space launch vehicle asearly as 2001.

• Iraq’s ability to obtain WMD will be influ-enced, in part, by the degree to which the UNSecurity Council can impede development or

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procurement over the next 15 years. Undersome scenarios, Iraq could test an ICBMcapable of delivering nuclear-sized payloadsto the United States before 2015; foreignassistance would affect the capabilities of themissile and the time it became available. Iraqcould also develop a nuclear weapon duringthis period.

Reacting to US Military SuperiorityExperts agree that the United States, with itsdecisive edge in both information and weaponstechnology, will remain the dominant militarypower during the next 15 years. Further bolster-ing the strong position of the United States areits unparalleled economic power, its universitysystem, and its investment in research anddevelopment—half of the total spent annuallyby the advanced industrial world. Many poten-tial adversaries, as reflected in doctrinal writ-ings and statements, see US military concepts,together with technology, as giving the UnitedStates the ability to expand its lead in conven-tional warfighting capabilities.

This perception among present and potentialadversaries will continue to generate the pursuitof asymmetric capabilities against US forcesand interests abroad as well as the territory ofthe United States. US opponents—state andsuch nonstate actors as drug lords, terrorists,and foreign insurgents—will not want toengage the US military on its terms. They willchoose instead political and military strategiesdesigned to dissuade the United States fromusing force, or, if the United States does useforce, to exhaust American will, circumvent orminimize US strengths, and exploit perceivedUS weaknesses. Asymmetric challenges canarise across the spectrum of conflict that willconfront US forces in a theater of operations oron US soil.

It is also generally recognized that the UnitedStates and other developed countries will con-tinue to possess the political, economic, mili-tary, and technological advantages—includingthrough National Missile and Theater MissileDefense systems—to reduce the gains of adver-saries from lateral or “side-wise” technologicalimprovements to their capabilities.

Threats to Critical Infrastructure. Somepotential adversaries will seek ways to threatenthe US homeland. The US national infrastruc-ture—communications, transportation, finan-cial transactions, energy networks—isvulnerable to disruption by physical and elec-tronic attack because of its interdependentnature and by cyber attacks because of theirdependence on computer networks. Foreigngovernments and groups will seek to exploit

Central Asia: Regional Hot Spot?

The interests of Russia, China, andIndia—as well as of Iran and Turkey—willintersect in Central Asia; the states ofthat region will attempt to balance thosepowers as well as keep the United Statesand the West engaged to prevent theirdomination by an outside power. Thegreatest danger to the region, however,will not be a conflict between states, whichis unlikely, but the corrosive impact ofcommunal conflicts and politicial insur-gencies, possibly abetted by outsideactors and financed at least in part bynarcotraffickers.

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such vulnerabilities using conventional muni-tions, information operations, and even WMD.Over time, such attacks increasingly are likelyto be delivered by computer networks ratherthan by conventional munitions, as the affinityfor cyber attacks and the skill of US adversariesin employing them evolve. Cyber attacks willprovide both state and nonstate adversaries newoptions for action against the United Statesbeyond mere words but short of physicalattack—strategic options that include selectionof either nonlethal or lethal damage and theprospect of anonymity.

Information Operations. In addition to threat-ening the US national infrastructure, adversar-ies will seek to attack US military capabilitiesthrough electronic warfare, psychological oper-ations, denial and deception, and the use of newtechnologies such as directed energy weaponsor electromagnetic pulse weapons. The primarypurpose would be to deny US forces informa-tion superiority, to prevent US weapons fromworking, and to undermine US domestic sup-port for US actions. Adversaries also are likelyto use cyber attacks to complicate US powerprojection in an era of decreasing permanentUS military presence abroad by seeking to dis-rupt military networks during deployment oper-ations—when they are most stressed. Manycountries have programs to develop such tech-nologies; few have the foresight or capability tofully integrate these various tools into a com-prehensive attack. But they could develop suchcapabilities over the next decade and beyond.

Terrorism. Much of the terrorism noted earlierwill be directed at the United States and itsoverseas interests. Most anti-US terrorism willbe based on perceived ethnic, religious or cul-tural grievances. Terrorist groups will continueto find ways to attack US military and diplo-matic facilities abroad. Such attacks are likely

to expand increasingly to include US compa-nies and American citizens. Middle East andSouthwest Asian-based terrorists are the mostlikely to threaten the United States.

Weapons of Mass Destruction. WMD pro-grams reflect the motivations and intentions ofthe governments that produce them and, there-fore, can be altered by the change of a regimeor by a regime’s change of view. Linear projec-tions of WMD are intended to assess what thepicture will look like if changes in motivationsand intentions do not occur.

Short- and medium-range ballistic missiles,particularly if armed with WMD, already posea significant threat overseas to US interests,military forces, and allies. By 2015, the UnitedStates, barring major political changes in thesecountries, will face ICBM threats from NorthKorea, probably from Iran, and possibly fromIraq, in addition to long-standing threats fromRussia and China.

• Weapons development programs, in manycases fueled by foreign assistance, have led tonew capabilities—as illustrated by Iran’sShahab-3 launches in 1998 and 2000 andNorth Korea’s Taepo Dong-1 space launchattempt in August 1998. In addition, somecountries that have been traditional recipientsof missile technologies have becomeexporters.

• Sales of ICBMs or space launch vehicles,which have inherent ICBM capabilities,could further increase the number of coun-tries that will be able to threaten the UnitedStates with a missile strike.

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The probability that a missile armed withWMD would be used against US forces orinterests is higher today than during most of theCold War and will continue to grow. Theemerging missile threats will be mounted bycountries possessing considerably fewer mis-siles with far less accuracy, yield, survivability,reliability, and range-payload capability thanthe strategic forces of the Soviet Union. NorthKorea’s space launch attempt in 1998 demon-strated that P’yongyang is seeking a long-rangemissile capability that could be used against USforces and interests abroad and against US ter-ritory itself. Moreover, many of the countriesdeveloping longer-range missiles assess thatthe mere threat of their use would complicateUS crisis decisionmaking and potentiallywould deter Washington from pursuing certainobjectives.

Other means to deliver WMD against theUnited States will emerge, some cheaper andmore reliable and accurate than early-genera-tion ICBMs. The likelihood of an attack bythese means is greater than that of a WMDattack with an ICBM. The goal of the adversarywould be to move the weapon within strikingdistance by using short- and medium-rangemissiles deployed on surface ships or covertmissions using military special operationsforces or state intelligence services. Non-mis-sile delivery means, however, do not providethe same prestige, deterrence, and coercivediplomacy associated with ICBMs.

Chemical and biological threats to the UnitedStates will become more widespread; suchcapabilities are easier to develop, hide, anddeploy than nuclear weapons. Some terroristsor insurgents will attempt to use such weaponsagainst US interests—against the United Statesitself, its forces or facilities overseas, or itsallies. Moreover, the United States would be

affected by the use of such weapons anywherein the world because Washington would becalled on to help contain the damage and toprovide scientific expertise and economic assis-tance to deal with the effects. Such weaponscould be delivered through a variety of means,including missiles, unmanned aerial vehicles,or covertly via land, air, and sea.

Theater-range ballistic and cruise missile pro-liferation will continue. Most proliferation willinvolve systems a generation or two behindstate of the art, but they will be substantiallynew capabilities for the states that acquire

WMD Proliferation and the Potentialfor Unconventional Warfare andEscalation

The risks of escalation inherent in directarmed conflict will be magnified by theavailability of WMD; consequently, prolif-eration will tend to spur a reversion toprolonged, lower-level conflict by othermeans: intimidation, subversion, terror-ism, proxies, and guerrilla operations.This trend already is evident betweenIsrael and some of its neighbors andbetween India and Pakistan. In the eventof war, urban fighting will be typical andconsequently, civilian casualties will behigh relative to those among combatants.Technology will count for less, and large,youthful, and motivated populations formore. Exploitation of communal divisionswithin an adversary’s civil populationswill be seen as a key to winning such con-flicts—increasing their bitterness andthereby prolonging them.

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Trends in Global Defense Spending andArmaments

Defense-related technologies will advancerapidly over the next 15 years—particularlyprecision weapons, information systems andcommunications. The development and inte-grated application of these technologies willoccur mostly in the advanced countries, par-ticularly the United States. Given the highcosts and complexity of technical and opera-tional integration, few nations will assignhigh priority to the indigenous developmentof such military technology.

• Non-US global defense spending hasdropped some 50 percent since the late1980s. “Military modernization accounts,”particularly procurement, have been hithard.

• The global arms market has decreased bymore than 50 percent during the sameperiod.

• Indications are that global defense spend-ing may be recovering from mid-1990slows; part of East Asia, for example, couldexperience rises in defense spending overthe next decade, but, overall, long-termspending patterns are uncertain.

Over the past decade, a slow but persistenttransformation has occurred in the arms pro-curement strategies of states. Many statesare attempting to diversify sources of armsfor reasons that vary from fears of arms

embargoes, to declining defense budgets, orto a desire to acquire limited numbers of cut-ting-edge technologies. Their efforts includedeveloping a mix of indigenous production;codeveloping, coproducing, or licensing pro-duction; purchasing entire weapon systems;or leasing capabilities. At the same time,many arms-producing states, confrontedwith declining domestic arms needs butdetermined to maintain defense industries,are commercializing defense production andaggressively expanding arms exports.

Together, the above factors suggest:

Technology diffusion to those few stateswith a motivation to arm and the economicresources to do so will accelerate as weap-ons and militarily relevant technologies aremoved rapidly and routinely across nationalborders in response to increasingly commer-cial rather than security calculations. Forsuch militarily related technologies as theGlobal Positioning System, satellite imagery,and communications, technological superi-ority will be difficult to maintain for verylong. In an environment of broad technologi-cal diffusion, nonmaterial elements of mili-tary power—strategy, doctrine, andtraining—will increase in importance overthe next 15 years in deciding combat out-comes.

(continued)

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them. Such missiles will be capable ofdelivering WMD or conventional payloadsinter-regionally against fixed targets. Major airand sea ports, logistics bases and facilities,troop concentrations, and fixed communica-tions nodes increasingly will be at risk.

• Land-attack cruise missiles probably will bemore accurate than ballistic missiles.

Access to Space. US competitors and adversar-ies realize the degree to which access to spaceis critical to US military power, and by 2015they will have made strides in countering USspace dominance. International commercializa-tion of space will give states and nonstateadversaries access rivaling today’s major spacepowers in such areas as high-resolutionreconnaissance and weather prediction, globalencrypted communications, and precisenavigation. When combined, such services willprovide adversaries who are aware of US andallied force deployments the capability forprecise targeting and global coordination ofoperations. Moreover, many adversaries willhave developed capabilities to degrade USspace assets—in particular, with attacks againstground facilities, electronic warfare, and denialand deception. By 2015, several countries willhave such counterspace technologies asimproved space-object tracking, signal jam-ming, and directed-energy weapons such aslow-power lasers.

Major Regions

The following snapshots of individual regionsresult from our assessment of trends and fromestimates by regional experts as to where spe-cific nations will be in 15 years. To make thesejudgments, we have distilled the views

Export regimes and sanctions will be dif-ficult to manage and less effective in con-trolling arms and weapons technologytransfers. The resultant proliferation ofWMD and long-range delivery systemswould be destabilizing and increase therisk of miscalculation and conflict thatproduces high casualties.

Advantages will go to states that have astrong commercial technology sector anddevelop effective ways to link these capa-bilities to their national defense indus-trial base. States able to optimize privateand public sector linkages could achievesignificant advancements in weaponssystems.

The twin developments outlined above—constrained defense spending worldwidecombined with increasing military techno-logical potential—preclude accurate fore-casts of which technologies, in whatquantity and form, will be incorporated inthe military systems of future adversaries.In many cases, the question will not bewhich technologies provide the greatestmilitary potential but which will receivethe political backing and resources toreach the procurement and fielding stage.Moreover, civilian technology develop-ment already is driving military technol-ogy development in many countries.

Trends in Global Defense Spending andArmaments (continued)

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expressed by many outside experts in ourconferences and workshops. The results areintended to stimulate debate, not to endorse oneview over another.

East and Southeast AsiaRegional Trends. East Asia over the next 15years will be characterized by uneven eco-nomic dynamism—both between and withinstates—political and national assertivenessrather than ideology, and potential for strategictension if not outright conflict.

The states of the region will be led by generallynationalistic governments eschewing ideologyand focusing on nation-building and develop-ment. These states will broadly accommodateinternational norms on the free flow of informa-tion to modernize their economies, open mar-kets, and fight international crime and disease.They also will encounter pressure for greaterpolitical pluralism, democracy, and respect forhuman rights. Failure to meet popular expecta-tions probably will result in leaders being voted

Arms Control: An Uncertain Agenda

The last three decades witnessed significantnegotiations between the United States andthe Soviet Union (and Russia), but the futureprobably will not replicate those efforts inform or magnitude.

• The INF, CFE, and START I treaties and, toa large extent, the CWC were concluded inan effort to reduce tensions during the ColdWar. Verification and monitoring in each ofthese treaties were viewed as essential totheir implementation.

Prospects for bilateral arms control betweenthe major powers probably will be dim overthe next 15 years; progress in multilateralregimes—with less intrusive and lower-cer-tainty monitoring—probably will grow spo-radically. Beyond this generalization:

• Efforts will be incremental, focusingmainly on extensions, modifications oradaptations of existing treaties, such asSTART III between the United Statesand Russia or a protocol enhancing

verification of the Biological WeaponsConvention.

• Efforts will assume a more regional focusas countries of concern continue develop-ing their own WMD arsenals.

• Safeguarding and controlling transfer ofmaterials and technology for nuclearweapons and missile delivery systems willtake on greater importance.

• Formal agreements probably will containlimited monitoring or verification provi-sions.

• Agreements are more likely to be asymmet-rical in terms of the goals and outcomes.For example, a form of barter may becomethe norm. Sides will negotiate dissimilarcommitments in reaching agreement. Anexample would be North Korea’s willing-ness to give up nuclear weapons and mis-siles in return for electric power and spacelaunch services.

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out of office in democratic states or in wide-spread demonstrations and violence leading toregime collapse in authoritarian states.

Political and Security Trends. The majorpower realignments and the more fluid post-Cold War security environment in the regionwill raise serious questions about how regionalleaders will handle nascent great-power rival-ries (the US-China, China-Japan, China-India),related regional “hot spots” (Taiwan, Korea,South China Sea), the future of challengedpolitical regimes (Indonesia, North Koreaabsent unification, China), and communal ten-sions and minority issues (in China, Indonesia,the Philippines, and Malaysia). On balance, thenumber and range of rivalries and potentialflashpoints suggest a better-than-even chancethat episodes of military confrontation and con-flict will erupt over the next 15 years.

The implications of the rise of China as an eco-nomic and increasingly capable regional mili-tary power—even as the influence ofCommunism and authoritarianism weakens—pose the greatest uncertainty in the area. Add-ing to uncertainty are the prospects for—andimplications of—Korean unification over thenext 15 years, and the evolution of Japan’sregional leadership aspirations and capabilities.

Instability in Russia and Central Asia, and thenuclear standoff between India and Pakistanwill be peripheral but still important in EastAsian security calculations. The Middle Eastwill become increasingly important as a pri-mary source of energy.

Economic Dynamism. While governments inthe region generally will accept the need toaccommodate international norms on owner-ship, markets, trade, and investment, they will

seek to block or slow the perceived adverseeconomic, political, and social consequences ofglobalization.

The most likely economic outlook will be thatrich societies—Japan, Korea, Hong Kong, Tai-wan, Singapore, and pockets in China and else-where—will get richer, with Japan likely tocontinue to be a leader in S&T developmentand applications for commercial use. In con-trast, the poor societies—Vietnam, Cambodia,Laos, and rural areas in western China and else-where—will fall further behind. Greater eco-nomic links are likely to have been forgedbetween Taiwan, Hong Kong, and South Chinaas a result of the development of investmentand infrastructure. China will be increasinglyintegrated into the world economy throughforeign direct investiment, trade, and interna-tional capital markets. Energy markets willhave drawn the region more closely togetherdespite lingering issues of ownership ofresources and territorial disputes.

Key uncertainties will persist on economic per-formance and political stability, including therising costs of pensions and services for Japan’saging population; the adequacy of energy andwater for China, political leadership in Indone-sia and China, and the impact of AIDS in Cam-bodia, Thailand, and Vietnam.

Regional Interaction. Given the weakness ofregional political-security arrangements, theUS political, economic, and security presencewill remain pronounced. At the same time,many countries in the region will remain uncer-tain about US objectives, apprehensive of bothUS withdrawal and US unilateralism. Keystates, most significantly China and Japan, will

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continue “hedging,” by using diplomacy, mili-tary preparations and other means to ensurethat their particular interests will be safe-guarded, especially in case the regional situa-tion deteriorates.

Japan and others will seek to maintain a USpresence, in part to counter China’s influence.Economic and other ties will bind Japan andChina, but historical, territorial, and strategicdifferences will underline continuing warinessbetween the two. China will want good eco-nomic ties to the United States but also willnurture links to Russia and others to counter thepossibility of US pressure against it and toweaken US support for Taiwan and the USsecurity posture in East Asia. US-China con-frontations over Taiwan or over broader com-peting security interests are possible.

Although preserving the US alliance, Japaneseleaders also will be less certain they can rely onthe United States to deal with some securitycontingencies. More confident of their ability tohandle security issues independently, they willpursue initiatives internally and overseas thatare designed to safeguard Japanese interestswithout direct reference to the US alliance.

South AsiaRegional Trends. The widening strategic andeconomic gaps between the two principal pow-ers, India and Pakistan—and the dynamic inter-play between their mutual hostility and theinstability in Central Asia—will define theSouth Asia region in 2015.

• India will be the unrivaled regional powerwith a large military—including naval andnuclear capabilities—and a dynamic andgrowing economy. The widening India-Paki-stan gap—destabilizing in its own right—willbe accompanied by deep political, economic,and social disparities within both states.

• Pakistan will be more fractious, isolated, anddependent on international financial assis-tance.

• Other South Asian states—Bangladesh, SriLanka, and Nepal—will be drawn closer toand more dependent on India and its econ-omy. Afghanistan will likely remain weakand a destabilizing force in the region and theworld.

Wary of China, India will look increasingly tothe West, but its need for oil and desire to bal-ance Arab ties to Pakistan will lead to strength-ened ties to Persian Gulf states as well.

Demographic Challenges. Although popula-tion growth rates in South Asia will decline,population still will grow by nearly 30 percentby 2015. India’s population alone will grow tomore than 1.2 billion. Pakistan’s projectedgrowth from 140 million to about 195 millionin 2015 will put a major strain on an economyalready unable to meet the basic needs of thecurrent population. The percentage of urbandwellers will climb steadily from the current25-30 percent of the population to between40-50 percent, leading to continued deteriora-tion in the overall quality of urban life. Differ-ential population growth patterns willexacerbate inequalities in wealth. Ties betweenprovincial and central governments throughoutthe region will be strained.

Resource and Environmental Challenges.Water will remain South Asia’s most vital andmost contested natural resource. Continuedpopulation and economic growth and expan-sion of irrigated agriculture over the next 15years will increasingly stress water resources,and pollution of surface and groundwater willbe a serious challenge. In India, per capita

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India in 2015. Indian democracy will remainstrong, albeit more factionalized by the secular-Hindu nationalist debate, growing differentialsamong regions and the increase in competitiveparty politics. India’s economy, long repressedby the heavy hand of regulation, is likely toachieve sustained growth to the degree reformsare implemented. High-technology companieswill be the most dynamic agents and will leadthe thriving service sector in four key urbancenters—Mumbai, New Delhi, Bangalore, andChennai. Computer software services and cus-tomized applications will continue to expand asIndia strengthens economic ties to key interna-tional markets. Industries such as pharmaceuti-cals and agro-processing also will competeglobally. Numerous factors provide India acompetitive advantage in the global economy.It has the largest English-speaking populationin the developing world; its education systemproduces millions of scientific and technicalpersonnel. India has a growing business-minded middle class eager to strengthen ties tothe outside world, and the large Indian expatri-ate population provides strong links to key mar-kets around the world.

Despite rapid economic growth, more than halfa billion Indians will remain in dire poverty.Harnessing technology to improve agriculturewill be India’s main challenge in alleviatingpoverty in 2015. The widening gulf between“have” and “have-not” regions and disagree-ments over the pace and nature of reforms willbe a source of domestic strife. Rapidly grow-ing, poorer northern states will continue todrain resources in subsidies and social welfarebenefits.

Pakistan in 2015. Pakistan, our conferees con-cluded, will not recover easily from decades ofpolitical and economic mismanagement, divi-sive politics, lawlessness, corruption and ethnicfriction. Nascent democratic reforms will

produce little change in the face of oppositionfrom an entrenched political elite and radicalIslamic parties. Further domestic decline wouldbenefit Islamic political activists, who may sig-nificantly increase their role in national politicsand alter the makeup and cohesion of the mili-tary—once Pakistan’s most capable institution.In a climate of continuing domestic turmoil, thecentral government’s control probably will bereduced to the Punjabi heartland and the eco-nomic hub of Karachi.

Other Regional States. Prospects for Afghani-stan, Bangladesh, and Sri Lanka in 2015 appearbleak. Decades of foreign domination and civilwar have devastated Afghanistan’s society andeconomy, and the country is likely to remaininternationally isolated, a major narcoticsexporter, and a haven for Islamic radicals and ter-rorist groups. Bangladesh will not abandondemocracy but will be characterized by coalitionsor weak one-party governments, fragile institu-tions of governance, deep-seated leadershipsquabbles, and no notion of a loyal opposition.

Security and Political Concerns Predominate.The threat of major conflict between India andPakistan will overshadow all other regionalissues during the next 15 years. Continued tur-moil in Afghanistan and Pakistan will spill overinto Kashmir and other areas of the subconti-nent, prompting Indian leaders to take moreaggressive preemptive and retaliatory actions.India’s conventional military advantage overPakistan will widen as a result of New Delhi’ssuperior economic position. India will also con-tinue to build up its ocean-going navy to domi-nate the Indian Ocean transit routes used fordelivery of Persian Gulf oil to Asia. The deci-sive shift in conventional military power inIndia’s favor over the coming years potentiallywill make the region more volatile and unsta-ble. Both India and Pakistan will see weapons

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of mass destruction as a strategic imperativeand will continue to amass nuclear warheadsand build a variety of missile delivery systems.

Russia and EurasiaRegional Trends. Uncertainties abound aboutthe future internal configuration, geopoliticaldynamics, and degree of turbulence within andamong former Soviet states. Russia and theother states of Eurasia are likely to fall short inresolving critical impediments to economic andpolitical reform in their struggle to manage thenegative legacies of the Soviet period. Chang-ing demographics, chronic economic difficul-ties, and continued questions about governancewill constrain Russia’s ability to project itspower beyond the former Soviet republics tothe south, complicate Ukraine’s efforts to drawcloser to the West, and retard the developmentof stable, open political structures throughoutthe Caucasus and Central Asia. Those statesthat could make progress on the basis of poten-tial energy revenues are likely to fail because ofcorruption and the absence of structural eco-nomic reform. The rapid pace of scientific andtechnological innovation, as well as globaliza-tion, will leave these states further behind theWest as well as behind the major emergingmarkets.

The economic challenges to these countrieswill remain daunting: insufficient structuralreform, poor productivity in agriculture ascompared with Western standards, decayinginfrastructure and environmental degradation.Corruption and organized crime, sustained bydrug trafficking, money laundering, and otherillegal enterprises and, in several instances,protected by corrupt political allies, willpersist.

Demographic pressures also will affect the eco-nomic performance and political cohesivenessof these states. Because of low birthrates and

falling life expectancy among males, the popu-lations of the Slavic core and much of the Cau-casus will continue to decline; Russian expertspredict that the country’s population could fallfrom 146 million at present to 130-135 millionby 2015. At the other end of the spectrum, theCentral Asian countries will face a growingyouth cohort that will peak around 2010 beforeresuming a more gradual pattern of populationgrowth.

The centrality of Russia will continue to dimin-ish, and by 2015 “Eurasia” will be a geographicterm lacking a unifying political, economic,and cultural reality. Russia and the westernEurasian States will continue to orient them-selves toward Europe but will remain essen-tially outside of it. Because of geographicproximity and cultural affinities, the Caucasuswill be closer politically to their neighbors tothe south and west, with Central Asia drawingcloser to South Asia and China. Nonetheless,important interdependencies will remain, pri-marily in the energy sphere.

Russia will remain the most important actor inthe former Soviet Union. Its power relative toothers in the region and neighboring areas willhave declined, however, and it will continue tolack the resources to impose its will.

The Soviet economic inheritance will continueto plague Russia. Besides a crumbling physicalinfrastructure, years of environmental neglectare taking a toll on the population, a toll madeworse by such societal costs of transition asalcoholism, cardiac diseases, drugs, and aworsening health delivery system. Russia’spopulation is not only getting smaller, but it isbecoming less and less healthy and thus lessable to serve as an engine of economic recov-ery. In macro economic terms Russia’s GDPprobably has bottomed out. Russia, neverthe-less, is still likely to fall short in its efforts to

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become fully integrated into the global finan-cial and trading system by 2015. Even under abest case scenario of five percent annual eco-nomic growth, Russia would attain an economyless than one-fifth the size of that of the UnitedStates.

Many Russian futures are possible, rangingfrom political resurgence to dissolution. Thegeneral drift, however, is toward authoritarian-ism, although not to the extreme extent of theSoviet period. The factors favoring this courseare President Putin’s own bent toward hierar-chical rule from Moscow; the population’s gen-eral support of this course as an antidote to themessiness and societal disruption of the post-Soviet transition; the ability of the ruling eliteto hold on to power because of the lack ofeffective national opposition, thus making thatelite accountable only to itself; and the ongoingshift of tax resources from the regions to thecenter. This centralizing tendency will contrib-ute to dysfunctional governance. Effective gov-ernance is nearly impossible under suchcentralization for a country as large and diverseas Russia and lacking well-ordered, disciplinednational bureaucracies. Recentralization, how-ever, will be constrained by the interconnected-ness brought about by the global informationrevolution, and by the gradual, althoughuneven, growth of civil society.

Russia will focus its foreign policy goals onreestablishing lost influence in the formerSoviet republics to the south, fostering ties toEurope and Asia, and presenting itself as a sig-nificant player vis-a-vis the United States. Itsenergy resources will be an important lever forthese endeavors. However, its domestic ills willfrustrate its efforts to reclaim its great powerstatus. Russia will maintain the second largestnuclear arsenal in the world as the last vestigeof its old status. The net outcome of thesetrends will be a Russia that remains internally

weak and institutionally linked to the interna-tional system primarily through its permanentseat on the UN Security Council.

Ukraine’s path to the West will be constrainedby widespread corruption, the power of crimi-nal organizations, and lingering questions overits commitment to the rule of law. Kiev willremain vulnerable to Russian pressures, prima-rily because of its continued energy depen-dence, but Ukrainians of all political stripes andlikely to opt for independence rather than rein-tegration into Russia’s sphere of influence.

In 2015, the South Caucasus will remain influx because of unresolved local conflicts, weakeconomic fundamentals, and continued Russianmeddling. Georgia probably will have achieveda measure of political and economic stability,fueled in part by energy transit revenues, but itwill remain the focus of Russian attention in theregion. Armenia will remain largely isolatedand is likely to remain a Russian—or possiblyIranian—client and, therefore, a regional wildcard. Azerbaijan’s success in developing itsenergy sector is unlikely to bring widespreadprosperity: Baku will be a one-sector economywith pervasive corruption at all levels of society.

In Central Asia, social, environmental, reli-gious, and possibly ethnic strains will grow.Wasteful water-intensive practices andpollution of ground water and arable land willlead to continued shortages for agricultural andenergy generation. The high birthrates of the1980s and early 1990s will lead to strains oneducation, healthcare, and social services. Theregion also is likely to be the scene of increasedcompetition among surrounding powers—Rus-sia, China, India, Iran, and possibly Turkey—for control, influence, and access to energyresources. Developments in Afghanistan andPakistan will threaten regional stability.

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potentially destabilizing—options for thosestates. New relationships between geographicregions could emerge between North Africaand Europe (on trade); India, China and thePersian Gulf (on energy); and Israel, Turkey,and India (on economic, technical, and in thecase of Turkey, security considerations).

A key driver for the Middle East over the next15 years will be demographic pressures, specif-ically how to provide jobs, housing, public ser-vices, and subsidies for rapidly growing andincreasingly urban populations. By 2015, inmuch of the Middle East populations will besignificantly larger, poorer, more urban, andmore disillusioned. In nearly all Middle Easterncountries, more than half the population is nowunder 20 years of age. These populations willcontinue to have very large youth cohortsthrough 2015, with the labor force growing atan average rate of 3.1 percent per year. Theproblem of job placement is compounded byweak educational systems producing a genera-tion lacking the technical and problem-solvingskills required for economic growth.

Globalization. With the exception of Israel,Middle Eastern states will view globalizationmore as a challenge than an opportunity.Although the Internet will remain confined to asmall elite due to relatively high cost, undevel-oped infrastructures, and cultural obstacles, theinformation revolution and other technologicaladvances probably will have a net destabilizingeffect on the Middle East by raising expecta-tions, increasing income disparities, and erod-ing the power of regimes to control informationor mold popular opinion. Attracting foreigndirect investment will also be difficult: exceptfor the energy sector, investors will tend to shyaway from these countries, discouraged byoverbearing state sectors; heavy, opaque, and

arbitrary government regulation; underdevel-oped financial sectors; inadequate physicalinfrastructure; and the threat of politicalinstability.

Political Change. Most Middle Eastern gov-ernments recognize the need for economicrestructuring and even a modicum of greaterpolitical participation, but they will proceedcautiously, fearful of undermining their rule.As some governments or sectors embrace thenew economy and civil society while otherscling to more traditional paradigms, inequitiesbetween and within states will grow. Islamistscould come to power in states that are begin-ning to become pluralist and in whichentrenched secular elites have lost their appeal.

Sub-Saharan AfricaRegional Trends. The interplay of demograph-ics and disease—as well as poor governance—will be the major determinants of Africa’sincreasing international marginalization in2015. Most African states will miss out on theeconomic growth engendered elsewhere byglobalization and by scientific and technologi-cal advances. Only a few countries will dobetter, while a handful of states will havehardly any relevance to the lives of their citi-zens. As Sub-Saharan Africa’s multiple andinterconnected problems are compounded, eth-nic and communal tensions will intensify, peri-odically escalating into open conflict, oftenspreading across borders and sometimesspawning secessionist states.

In the absence of a major medical break-through, the relentless progression of AIDS andother diseases will decimate the economicallyproductive adult population, sharply accentuatethe continent’s youth bulge, and generate a

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ing out to 2015, Europe’s agenda will be to putin place the final components of EU integra-tion; to take advantage of globalization; to sus-tain a strong IT and S&T base to tacklechanging demographics; and to wean the Bal-kans away from virulent nationalism.

EU enlargement, institutional reform, and acommon foreign, security and defense policywill play out over the next 15 years, so that by2015 the final contours of the “Europeanproject” are likely to be firmly set. Havingabsorbed at least 10 new members, the Euro-pean Union will have achieved its geographicand institutional limits.

• As a consequence of long delays in gainingEU entry (and the after-effects of actualmembership), leaders in some Central/East-ern Europe countries will be susceptible topressures from authoritarian, nationalistforces on both the left and right. These forceswill capitalize on public resentment about theeffects of EU policy and globalization,including unemployment, foreign ownership,and cultural penetration.

• The EU will not include Russia. The Europe-ans, nevertheless, will seek to engageMoscow—encouraging stability and main-taining dialogue. Although Russia will con-tinue to recede in importance to the Europeangovernments, they will use US handling ofRussia as a barometer of how well or poorlyWashington is exerting leadership anddefending European interests.

Economic Reform & Globalization. EU gov-ernments will continue to seek a “third way”between state control and unbridled capitalism:piecemeal and often unavowed economicreform driven in part by an ever denser networkof overseas business relationships and changes

in corporate governance. Lingering labor mar-ket rigidity and state regulation will hamperrestructuring, retooling, and reinvestment strat-egies. Europe will trail the United States inentrepreneurship and innovation as govern-ments seek ways to balance encouragement ofthese factors against social effects. Thus,Europe will not achieve fully the dreams of par-ity with the United States as a shaper of the glo-bal economic system.

In Prague, Vienna, and other European capitals,protestors have questioned the merits of global-ization. By 2015, Europe will have globalizedmore extensively than some of its politicalrhetoric will suggest. It also will have lessdifficulty than other regions coping with rapidchange because of high education and techno-logical levels. States will continue to pushprivate sector competitiveness in the interna-tional market. Three of the top five informationtechnology centers in the world will be inEurope: London, Munich, and Paris.

Many Europeans will see the role of foreignpolicy as protecting their social and culturalidentities from the “excesses” of globaliza-tion—and from its “superpatron,” the UnitedStates. One of the ways in which leaders willrespond will be to clamor for greater politicalcontrol over international financial and tradeinstitutions.

The aging of the population and low birthrateswill be major challenges to European prosper-ity and cohesion. Greater percentages of statebudgets will have to be allocated to the aging,while, at the same time, there will be signifi-cant, chronic shortages both of highly skilledworkers in IT and other professions andunskilled workers in basic services. Legal and

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illegal immigration will mitigate labor short-ages to a limited extent but at a cost in terms ofsocial friction and crime. As EU governmentsgrapple with immigration policy and Europeanand national identity, anti-immigrant sentimentwill figure more prominently in the politicalarena throughout Western Europe.

Turkey. The future direction of Turkey, bothinternally and geopolitically, will have a majorimpact on the region, and on US and Westerninterests. Shifting political dynamics; debatesover identity, ethnicity and the role of religionin the state; and the further development ofcivil society will figure prominently in Turkey’sdomestic agenda. The road to Turkish member-ship in the EU will be long and difficult, andEU member states will evaluate Turkey’scandidacy not only on the basis of economicperformance, but on how well it tackles thiscomprehensive agenda. Part of Turkey’ssuccess will hinge on the effectiveness of agrowing private sector in advancing Turkey’sreform efforts and its goal of full integration inthe West. NATO’s involvement in the Ballkansand expected enlargement in southern Europewill increase ties between Turkey and the West.

By dint of its history, location, and interests,Turkey will continue to pay attention to itsneighbors to the north—in the Caucasus andCentral Asia—and to the south and east—Syria, Iraq and Iran. With few exceptions, thesestates will continue to struggle with questionsof governance. As Turkey crafts policiestoward the countries in these regions, no singleissue will dominate its national securityagenda. Rather, Ankara will find itself havingto cope with regional rivalries—including whatpolicies to adopt toward internal and interstateconflicts—proliferation of weapons of massdestruction, the politics and economics ofenergy transport, and water rights.

Europe and the World. Europe’s agenda willrequire it to demonstrate influence in worldaffairs commensurate with its size in popula-tion and economic strength. The EU’s globalreach will be based primarily on economics:robust trade and investment links to the UnitedStates and growing ties to East and SoutheastAsia and Latin America.

In dealing with matters outside the region,European leaders will construe their globalresponsibilities as building legal mechanisms,encouraging diplomatic contact, and—to alesser extent—providing nonmilitary aid. Theywill respond sporadically to foreign crises—either through the UN or in ad hoc “coalitionsof the willing” with Washington or others—butthey will not make strong and consistent over-seas commitments, particularly in regard tosending troops.

Transatlantic Links. Economic issues willhave overtaken security issues in importanceby 2015, and the United States will see itsrelations with Europe defined increasinglythrough the EU, not only on the basis of tradebut in the context of using economic tools—such as aid and preferential trading regimes—to underwrite peace initiatives.

By 2015, NATO will have accepted many, butnot all, Central/Eastern European countries.European Security and Defense Policy will beset in terms of partnership with, rather thanreplacement of, NATO.

CanadaTrends. Canada will be a full participant in theglobalization process in 2015 and a leadingplayer in the Americas after the United States,along with Mexico and Brazil. Ottawa will still

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be grappling with the political, demographic,and cultural impact of heavy Asian immigra-tion in the West as well as residual nationalistsentiment in French-speaking Quebec. The vastand diverse country, however, will remain sta-ble amidst constant, dynamic change.

Ottawa will continue to emphasize the impor-tance of education, and especially science andtechnology, for the new economy. Canada alsowill promote policies designed to stem the flowof skilled workers south and will seek to attractskilled immigrants—especially professionalsfrom East and South Asia—to ensure that Can-ada will be able to take full advantage of globalopportunities. The question of Quebec’s placein the country will continue to stir nationaldebate.

Canada’s status as the pre-eminent US eco-nomic partner will be even more pronounced in2015. National sensitivity to encroaching USculture will remain, even as the two economiesbecome more integrated. Ottawa will retain itsinterests in the stability and prosperity of EastAsia because of growing Canadian economic,cultural, and demographic links to the Pacificregion. As additional trade links with LatinAmerica are developed through the NorthAmerican Free Trade Agreement and a likelyFree Trade Area of the Americas, Canadaincreasingly will take advantage of develop-ments in the Western hemisphere. AlthoughCanadians will focus more on Latin Americaand less on Europe, they will still look toNATO as the cornerstone of Western security.Like Europeans, Canadians will judge US glo-bal leadership in terms of the relationship withRussia, especially regarding strategic arms andNational Missile Defense (NMD).

Despite the relatively small size of Canada’sarmed forces, Ottawa still will seek to partici-pate in global and regional discussions on the

future of international peacekeeping. Canadawill continue to build on its traditional supportfor international organizations by working toensure a more effective UN and greater respectfor international treaties, norms, and regimes.Canadians will be sympathetic to calls forgreater political “management” of globaliza-tion to help mitigate adverse impacts on theenvironment and ensure that globalization’sbenefits reach less advantaged regions andstates.

Latin AmericaRegional Trends. By 2015, many Latin Ameri-can countries will enjoy greater prosperity as aresult of expanding hemispheric and globaleconomic links, the information revolution, andlowered birthrates. Progress in building demo-cratic institutions will reinforce reform andpromote prosperity by enhancing investor con-fidence. Brazil and Mexico will be increasinglyconfident and capable actors that will seek agreater voice in hemispheric affairs. But theregion will remain vulnerable to financial crisesbecause of its dependence on external financeand the continuing role of single commoditiesin most economies. The weakest countries inthe region, especially in the Andean region,will fall further behind. Reversals of democracyin some countries will be spurred by a failure todeal effectively with popular demands, crime,corruption, drug trafficking, and insurgencies.

Latin America—especially Venezuela, Mexico,and Brazil—will become an increasinglyimportant oil producer by 2015 and animportant component of the emerging AtlanticBasin energy system. Its proven oil reserves aresecond only to those located in the Middle East.

Globalization Gains and Limits. Continuedtrade and investment liberalization and theexpansion of free trade agreements within and

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outside of Latin America will be a significantcatalyst of growth. Regional trade integrationthrough organizations such as MERCOSURand the likely conclusion of a Free Trade Areaof the Americas will both boost employmentand provide the political context for govern-ments to sustain economic reforms even againstopposing entrenched interest groups.

Latin America’s Internet market is poised togrow exponentially, stimulating commerce,foreign investment, new jobs, and corporateefficiency. Although Internet business opportu-nities will promote the growth of firms through-out the region, Brazil, Argentina, and Mexicoare likely to be the biggest beneficiaries.

Shifting Demographics. Latin America’sdemographics will shift markedly—to thedistinct advantage of some countries—helpingto ease social strains and underpin highereconomic growth. During the next 15 years,most countries will experience a substantialslowdown in the number of new jobseekers,which will help reduce unemployment andboost wages. But not all countries will enjoythese shifts; Bolivia, Ecuador, Guatemala, Hon-duras, Nicaragua, and Paraguay will still facerapidly increasing populations in need of work.

Democratization Progress and Setbacks. By2015, key countries will have made some head-way in building sturdier and more capable dem-ocratic institutions. Democratic institutions inMexico, Argentina, Chile, and Brazil appearpoised for continued incremental consolidation.In other countries, crime, public corruption, thespread of poverty, and the failure of govern-ments to redress worsening income inequalitywill provide fertile ground for populist andauthoritarian politicians. Soaring crime rateswill contribute to vigilantism and extrajudicialkillings by the police. Burgeoning criminal

activity—including money laundering, aliensmuggling, and narcotrafficking—could over-whelm some Caribbean countries. Democrati-zation in Cuba will depend upon how and whenFidel Castro passes from the scene.

Growing Regional Gaps. By 2015, the gapbetween the more prosperous and democraticstates of Latin America and the others willwiden. Countries that are unable or unwilling toundertake reforms will experience slow growthat best. Several will struggle intermittently withserious domestic political and economic prob-lems such as crime, corruption, and depen-dence on single commodities such as oil.Countries with high crime and widespreadcorruption will lack the political consensus toadvance economic reforms and will face lowergrowth prospects. Although poverty and ine-quality will remain endemic throughout theregion, high-fertility countries will face higherrates of poverty and unemployment.

The Andean countries—Colombia, Venezuela,Ecuador, and Peru—are headed for greaterchallenges of differing nature and origin. Com-petition for scarce resources, demographicpressures, and a lack of employment opportuni-ties probably will cause workers’ anger tomount and fuel more aggressive tactics in thefuture. Fatigue with economic hardship anddeep popular cynicism about political institu-tions, particularly traditional parties, could leadto instability in Venezuela, Peru and Ecuador.Resolution of the long-running guerrilla war iskey to Colombia’s future prospects. The Cubaneconomy under a Castro Government will fallfurther behind most of the Latin Americancountries that embrace globalization and adoptfree market practices.

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Rising Migration. Pressures for legal and ille-gal migration to the United States and region-ally will rise during the next 15 years.Demographic factors, political instability, per-sonal insecurity, poverty, wage differentials, thegrowth of alien-smuggling networks, and widerfamily ties will propel more Latin Americanworkers to enter the United States. El Salvador,Guatemala, Honduras, and Nicaragua willbecome even greater sources of illegalmigrants. In Mexico, declining populationgrowth and strong economic prospects willgradually diminish pressures to seek work inthe United States, but disparities in living stan-dards, US demand for labor, and family tieswill remain strong pull factors. Significant

political instability during a transition processin Cuba could lead to mass migration.

• The growth of Central American and Mexi-can alien-smuggling networks will exacer-bate problems along the US border.

Illegal migration within the region will becomea more contentious issue between Latin Ameri-can governments. Argentina and Venezuelaalready have millions of undocumented work-ers from neighboring countries, and resentmentof illegal workers could increase. Althoughmost Haitian migrants will head for the UnitedStates, Haiti’s Caribbean neighbors will alsoexperience further strains.

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Significant Discontinuities

The trends outlined in this study are basedon the combinations of drivers that are mostlikely over the next 15 years. Nevertheless,the drivers could produce trends quite differ-ent from the ones described. Below are pos-sibilities different from those presented in thebody of the study:

• Serious deterioration of living standardsfor the bulk of the population in severalmajor Middle Eastern countries and thefailure of Israel and the Palestinians toconclude even a “cold peace,” lead to seri-ous, violent political upheavals in Egypt,Jordan, and Saudi Arabia.

• The trend toward more diverse, free-wheel-ing transnational terrorist networks leadsto the formation of an international terror-ist coalition with diverse anti-Westernobjectives and access to WMD.

• Another global epidemic on the scale ofHIV/AIDS, or rapidly changing weatherpatterns attributable to global warming,with grave damage and enormous costs forseveral developed countries—sparking anenduring global consensus on the need forconcerted action on health issues and theenvironment.

• A state of major concern to US strategicinterests—such as Iran, Nigeria, Israel, orSaudi Arabia—fails to manage seriousinternal religious or ethnic divisions andcrisis ensues.

• A growing antiglobalization movementbecomes a powerful sustainable globalpolitical and cultural force—threateningWestern governmental and corporate inter-ests.

• China, India, and Russia form a defactogeo-strategic alliance in an attempt tocounterbalance US and Westerninfluence.

• The US-European alliance collapses,owing in part to intensifying trade disputesand competition for leadership in handlingsecurity questions.

• Major Asian countries establish an AsianMonetary Fund or less likely an AsianTrade Organization, undermining the IMFand WTO and the ability of the US to exer-cise global economic leadership.

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(U) AppendixFour AlternativeGlobal Futures

In September-October 1999, the NIC initiatedwork on Global Trends 2015 by cosponsoringwith Department of State/INR and CIA’s Glo-bal Futures Project two unclassified workshopson Alternative Global Futures: 2000-2015. Theworkshops brought together several dozen gov-ernment and nongovernment specialists in awide range of fields.

The first workshop identified major factors andevents that would drive global change through2015. It focused on demography, naturalresources, science and technology, the globaleconomy, governance, social/cultural identities,and conflict and identified main trends andregional variations. These analyses became thebasis for subsequent elaboration in GlobalTrends 2015.

The second workshop developed four alterna-tive global futures in which these drivers wouldinteract in different ways through 2015. Eachscenario was intended to construct a plausible,policy-relevant story of how this future mightevolve: highlighting key uncertainties, disconti-nuities, and unlikely or “wild card” events, andidentifying important policy and intelligencechallenges.

Scenario One: Inclusive Globalization:A virtuous circle develops among technology,economic growth, demographic factors, andeffective governance, which enables a majorityof the world’s people to benefit from globaliza-tion. Technological development and diffu-sion—in some cases triggered by severeenvironmental or health crises—are utilized to

grapple effectively with some problems of thedeveloping world. Robust global economicgrowth—spurred by a strong policy consensuson economic liberalization—diffuses wealthwidely and mitigates many demographic andresource problems. Governance is effective atboth the national and international levels. Inmany countries, the state’s role shrinks, as itsfunctions are privatized or performed by pub-lic-private partnerships, while global coopera-tion intensifies on many issues through avariety of international arrangements. Conflictis minimal within and among states benefitingfrom globalization. A minority of the world’speople—in Sub-Saharan Africa, the MiddleEast, Central and South Asia, and the Andeanregion—do not benefit from these positivechanges, and internal conflicts persist in andaround those countries left behind.

Scenario Two: Pernicious GlobalizationGlobal elites thrive, but the majority of theworld’s population fails to benefit from global-ization. Population growth and resourcescarcities place heavy burdens on many devel-oping countries, and migration becomes amajor source of interstate tension. Technolo-gies not only fail to address the problems ofdeveloping countries but also are exploited bynegative and illicit networks and incorporatedinto destabilizing weapons. The global econ-omy splits into three: growth continues indeveloped countries; many developing coun-tries experience low or negative per capitagrowth, resulting in a growing gap with the

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developed world; and the illicit economy growsdramatically. Governance and political leader-ship are weak at both the national and interna-tional levels. Internal conflicts increase, fueledby frustrated expectations, inequities, andheightened communal tensions; WMD prolifer-ate and are used in at least one internal conflict.

Scenario Three: Regional CompetitionRegional identities sharpen in Europe, Asia,and the Americas, driven by growing politicalresistance in Europe and East Asia to US globalpreponderance and US-driven globalizationand each region’s increasing preoccupationwith its own economic and political priorities.There is an uneven diffusion of technologies,reflecting differing regional concepts of intel-lectual property and attitudes towards biotech-nology. Regional economic integration in tradeand finance increases, resulting in both fairlyhigh levels of economic growth and risingregional competition. Both the state and institu-tions of regional governance thrive in majordeveloped and emerging market countries, asgovernments recognize the need to resolvepressing regional problems and shift responsi-bilities from global to regional institutions.Given the preoccupation of the three majorregions with their own concerns, countries out-side these regions in Sub-Saharan Africa, theMiddle East, and Central and South Asia havefew places to turn for resources or political sup-port. Military conflict among and within thethree major regions does not materialize, butinternal conflicts increase in and around othercountries left behind.

Scenario Four: Post-Polar WorldUS domestic preoccupation increases as the USeconomy slows, then stagnates. Economic andpolitical tensions with Europe grow, the US-European alliance deteriorates as the UnitedStates withdraws its troops, and Europe turns

inward, relying on its own regional institutions.At the same time, national governance crisescreate instability in Latin America, particularlyin Colombia, Cuba, Mexico, and Panama,forcing the United States to concentrate on theregion. Indonesia also faces internal crisis andrisks disintegration, prompting China to pro-vide the bulk of an ad hoc peacekeeping force.Otherwise, Asia is generally prosperous andstable, permitting the United States to focuselsewhere. Korea’s normalization and de factounification proceed, China and Japan providethe bulk of external financial support forKorean unification, and the United Statesbegins withdrawing its troops from Korea andJapan. Over time, these geostrategic shiftsignite longstanding national rivalries among theAsian powers, triggering increased militarypreparations and hitherto dormant or covertWMD programs. Regional and global institu-tions prove irrelevant to the evolving conflictsituation in Asia, as China issues an ultimatumto Japan to dismantle its nuclear program andJapan—invoking its bilateral treaty with theUS—calls for US reengagement in Asia underadverse circumstances at the brink of a majorwar. Given the priorities of Asia, the Americas,and Europe, countries outside these regions aremarginalized, with virtually no sources ofpolitical or financial support.

Generalizations Across the ScenariosThe four scenarios can be grouped in two pairs:the first pair contrasting the “positive” and“negative” effects of globalization; the secondpair contrasting intensely competitive but notconflictual regionalism and the descent intoregional military conflict.

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• In all but the first scenario, globalization doesnot create widespread global cooperation.Rather, in the second scenario, globalization’snegative effects promote extensive disloca-tion and conflict, while in the third andfourth, they spur regionalism.

• In all four scenarios, countries negativelyaffected by population growth, resource scar-cities and bad governance, fail to benefit fromglobalization, are prone to internal conflicts,and risk state failure.

• In all four scenarios, the effectiveness ofnational, regional, and international gover-nance and at least moderate but steady eco-nomic growth are crucial.

• In all four scenarios, US global influencewanes.

Population

Resources

Technology

Economy

Identity and Governance

Conflict

Driver Behavior in the Global Futures Scenarios

Scenario: Inclusive Globalization

Global population increases by 1 billion people. Pressures from population growth mitigated by high average annual economic growth.

Urbanization manageable in many countries, but some cities with rapid population growth become politically unstable.

High migration beneficial for sending and receiving countries, although controversial in Europe and Japan.

Population increases and robust economic growth will stress ecosystems, resulting in soil degradation, CO2 pollution, deforestation and loss of species, especially in areas of rapid urbanization.

Advanced developing countries largely resolve resource problems, although the poorest developing countries will suffer resource scarcities. In particular, water scarcities will worsen in South Asia, northern China, Middle East, and Africa.

Conditions will be auspicious for rapid innovation, diffusion and implementation of IT, biotechnology, and smart materials.

IT will promote productivity gains and higher levels of non-inflationary growth for many countries.

Some countries will fall further behind because they lack sufficient education levels, infrastructure, and regulatory systems.

US global leadership and economic power, further liberalization of trade, broad acceptance of market reforms, rapid diffusion of IT, and absence of great-power conflict will generate on average 4% annual global economic growth.

Emerging markets—China, India, Brazil—and many developing countries will benefit. Some states in Africa, the Middle East, Andean region, Central Asia, and the Caucasus will lag.

Ethnic heterogeneity challenges cohesion of some states, migrant workers create chronic tensions in ethnically homogeneous Europe and East Asia, and communal tensions and violence increase in developing countries with poor governance.

In many states benefiting from rapid economic growth and spread of IT, functions of governance will diffuse widely from national governments to local governments and partnerships with business firms, non-profits. Some states’ capacity to govern will weaken, and especially in the Andean region, Sub-Saharan Africa, and Central and South Asia.

Absence of great power conflict. Conflict is minimal between and within developed and emerging market countries, due to economic prosperity and growing acceptance of democratic norms.

Internal and cross-border conflicts persist in Sub-Saharan Africa, parts of Central, South, and Southeast Asia, and the Andean region due to lack of effective governance and countries’ inability to handle population growth, resources scarcities, ethnic tensions, and urbanization.

Developed countries will allow many strategically remote conflicts to proceed without attempting to intervene.

Scenario: Pernicious Globalization

Additional 1 billion people prove burdensome, since economic stagnation and high unemployment prevent absorption of new job market entrants or migrants.

Inadequate urban infrastructure and social services in most cities create conditions ripe for instability and insurgency.

South–North migration becomes major source of tension, spurring US and Europe to disengage from developing countries.

Population growth will contribute to scarcities of arable land and fresh water, exacerbated by inappropriate policies of subsidy and protectionism.

Resource scarcities, particularly that of fresh water, will be major problems in both emerging market and developing countries, reducing agricultural production and spurring migration to cities.

Innovation and diffusion will be slow, due to economic stagnation and political uncertainties.

The destabilizing effects of technology will predominate: WMD proliferates; IT empowers terrorists and criminals.

Benefits of technology will be realized by only a few rich countries, while most countries will fall further behind.

A US downturn leads to economic stagnation. Global consensus supporting market reforms will erode, undermining the "American economic model," making US especially vulnerable and leading US to disengage from global involvement.

Emerging markets, as well as most developing countries, are hard hit by economic stagnation.

Ethnic/religious identities sharpen in many heterogeneous states. Communal tensions and violence increase in Africa, Central and South Asia, and parts of Middle East. Political Islam grows. Likelihood of terrorism against targets linked to globalization and the US will increase, hastening Northern disengagement.

Weakening of governing capacity at all levels among both developed and developing countries; China and Russia face territorial fragmentation.

Risk of regional conflict in Asia rises substantially. Serious questions arise concerning:• China’s territorial integrity.• India’s ability to govern.• Future of democracy in Russia.

Frequency of internal and interstate conflicts increases, triggered by rising tensions in emerging and developing countries and reduced cooperation among developed countries.

WMD restraints will erode, increasing risks of terrorism and regional aggression.

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Population

Resources

Technology

Economy

Identity and Governance

Conflict

Driver Behavior in the Global Futures Scenarios (continued)

Scenario: Regional Competition

Additional 1 billion people prove burdensome for many developing countries, due to slow economic growth and regional protectionism.

Cities in many developing countries become unstable, due to growing economic disparities, inadequate infrastructure and services, and weak governance: increasing cross-border migration.

Population growth, economic pressures, and policy failures create resource scarcities, especially in poor countries and highly populated emerging markets.

International environmental collaboration weakens, and local conflicts over water spur cross-border migration.

Technology advances and commercializes rapidly, but regional protectionism reduces economies of scale and promotes trade barriers.

Conflicts over market openings for high technology sectors break out. Developing countries unable to compete in global economy fall into technological backwardness.

Growth is robust, but diminished by effects of regionalism and protectionism. US maintains advantage over Europe and Japan through ability to absorb foreign workers.

Emerging markets are targets of developed country mercantilist competition. Other developing countries are neglected by rich countries and atrophied global institutions.

Globalization, assertions of US "hegemony," and cultural changes challenge national identities, contributing to US-European and US-Asian estrangement and increasing US engagement in Latin America.

Labor mobility sharpens ethnic/religious identities in countries where immigrants cannot be absorbed.

Communal pressures in developing countries increase, in some cases leading to internal communal conflicts.

Mercantilist competition strengthens the state.

A number of regional organizations are strengthened while global institutions weaken, due to inattention, preoccupation with domestic/regional issues, and EU/Japan resentment of US preeminence.

Increased regionalism results in conflict over markets, investment flows, and resources, further reducing international collaboration on terrorism, crime, cross-border conflicts, and WMD proliferation.

WMD proliferates rapidly and dangerously.

High levels of internal and cross-border conflicts persist in developing countries.

Scenario: Post-Polar World

Additional 1 billion people destabilizing some countries, such as Indonesia, and make some rapidly growing cities ungovernable.

Population dynamics create opportunities for China and emerging market countries of Latin America and contribute to reordering of great-power relationships in Asia.

Resource trends similar to those in regional competition scenario.

Widespread regional protectionism and conflicts over access to high technology develop.

Regional and great-power relations in Asia become more contentious. Demand for militarily-relevant technologies in Asia increases.

Economic trends similar to those in regional competition scenario.

Globalization and cultural changes contribute to US–European estrangement and increase US engagement in Latin America. Traditional national identities and rivalries stoke intensified nationalism in Asia.

Labor mobility sharpens ethnic/religious identities in countries where immigrants cannot be absorbed.

Communal pressures increase in many developing countries, and conflicts persist in the Andean region, Indonesia, and elsewhere.

Both mercantilist competition and a growing prospect of interstate conflict in Asia strengthen developed and emerging market states’ ability to command resources, invest in militarily-relevant technology, and control borders.

Both global and regional intergovernmental institutions weaken.

As US concentrates on Western Hemisphere and downgrades its presence in Europe and Asia, China drives towards regional dominance, Japan rearms and the risk of great-power conflict increases as US contemplates reasserting influence in Asia.

WMD proliferates rapidly and dangerously, particularly in Asia.

High levels of internal and cross-border conflicts persist in developing countries.

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The National Intelligence Council

The National Intelligence Council (NIC) manages the Intelligence Community’s estimative process,incorporating the best available expertise inside and outside the government. It reports to the Directorof Central Intelligence in his capacity as head of the US Intelligence Community and speaks authorita-tively on substantive issues for the Community as a whole.

Chairman(concurrently Assistant Director ofCentral Intelligence for Analysisand Production)

John Gannon

Vice Chairman Ellen Laipson

Director, Senior Review,Production, and Analysis

Stuart A. Cohen

National Intelligence Officers

Africa Robert Houdek

At-Large Stuart A. Cohen

Conventional Military Issues John Landry

East Asia Robert Sutter

Economics & Global Issues David Gordon

Europe Barry F. Lowenkron

Latin America Fulton T. Armstrong

Near East and South Asia Paul Pillar

Russia and Eurasia George Kolt

Science & Technology Lawrence Gershwin

Strategic & Nuclear Programs Robert D Walpole

Warning Robert Vickers

Unclassified