|
|
Special Reports
The 2015 world, according to the CIA
Global Trends 2015:
A dialogue about the future with nongovernment experts
"This paper was prepared under the direction of the National Intelligence Council (NIC). In undertaking this comprehensive analysis, the NIC worked actively with a range of nongovernmental institutions and experts. We began the analysis with two workshops focusing on drivers and alternative futures, as the appendix describes. Subsequently, numerous specialists from academia and the private sector contributed to every aspect of the study, from demographics to developments in science and technology, from the global arms market to implications for the United States. Many of the judgments in this paper derive from our efforts to distill the diverse views expressed at these conferences or related workshops."
Contents
1. Overview
Over the past 15 months, the National Intelligence Council (NIC), in close collaboration with US government specialists and a wide range of experts outside the government, has worked to identify major drivers and trends that will 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, they will work at cross-purposes.
Taken together, these drivers and trends intersect to create an integrated picture of the world of 2015, about which we can make projections with varying degrees of confidence and identify some troubling uncertainties of strategic importance to the United States.
The Methodology: Global Trends 2015 provides a flexible framework to discuss and debate the future. The methodology is useful for our purposes, although admittedly inexact for the social scientist. Our purpose is to rise above short-term, tactical considerations and provide a longer-term, strategic perspective. Judgments about demographic and natural resource trends are based primarily on informed extrapolation of existing trends. In contrast, many judgments about science and technology, economic growth, globalization, governance, and the nature of conflict represent a distillation of views of experts inside and outside the United States Government. The former are projections about natural phenomena, about which we can have fairly high confidence; the latter are more speculative because they are contingent upon the decisions that societies and governments will make.
The drivers we emphasize will have staying power. Some of the trends will persist; others will be less enduring and may change course over the time frame we consider. The major contribution of the National Intelligence Council (NIC), assisted by experts from the Intelligence Community, has been to harness US Government and nongovernmental specialists to identify drivers, to determine which ones matter most, to highlight key uncertainties, and to integrate analysis of these trends into a national security context. The result 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 the predecessor, Global Trends 2010, published in 1997. Global Trends 2010 was the centerpiece of numerous briefings, conferences, and public addresses. Various audiences were energetic in challenging, modifying or confirming our judgments. The lively debate that ensued has expanded our treatment of drivers, altered some projections we made in 1997, and matured our thinking overall--which was the essential 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 next 15 years. Some of the key changes include:
- Globalization has emerged as a more powerful driver. GT 2015 sees international economic dynamics--including developments in the World Trade Organization--and the spread of information technology as having much greater influence than portrayed in GT 2010.
- GT 2015 assigns more significance to the importance of governance, notably the ability of states to deal with nonstate actors, both good and bad. GT 2015 pays attention both to the opportunities for cooperation between governments and private organizations and to the growing reach of international criminal and terrorist networks.
- GT 2015 includes a more careful examination of the likely role of science and technology as a driver of global developments. In addition to the growing significance of information technology, biotechnology and other technologies carry much more weight in the present assessment.
- The effect of the United States as the preponderant power is introduced in GT 2015. The US role as a global driver has emerged more clearly over the past four years, particularly as many countries debate the impact of "US hegemony" on their domestic and foreign policies.
- GT 2015 provides a more complete discussion of natural resources including food, water, energy, and the environment. It discusses, for example, the over three billion individuals who will be living in water-stressed regions from North China to Africa and the implications for conflict. The linkage between energy availability, price, and distribution 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 the impact 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 years have 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 in East Asia, though the overall projections remain fairly optimistic.
- As described in GT 2010, there is still substantial uncertainty regarding whether China can cope with internal political and economic trends. GT 2015 highlights even greater uncertainty over the direction of Beijing's regional policies.
- Many of the global trends continue to remain negative for the societies and regimes in the Middle East. GT 2015 projects at best a "cold peace" between Israel and its adversaries and sees prospects for potentially destabilizing social changes due to adverse effects of globalization and insufficient attention to reform. The spike in oil revenues reinforces the assessment of GT 2010 about the rising demand for OPEC oil; these revenues are not likely to be directed primarily at core human resources and social needs.
- Projections for Sub-Saharan Africa are even more dire than in GT 2010 because of the spread of AIDS and the continuing prospects for humanitarian crises, political instability, and military conflicts.
2. The Drivers and Trends
Demographics: World population in 2015 will be 7.2 billion, up from 6.1 billion in the year 2000, and in most countries, people will live longer. Ninety-five percent of the increase will be in developing countries, nearly all in rapidly expanding urban areas. Where political systems are brittle, the combination of population growth and urbanization will foster instability. Increasing lifespans will have significantly divergent impacts.
In the advanced economies - and a growing number of emerging market countries - declining birthrates and aging will combine to increase health care and pension costs while reducing the relative size of the working population, straining the social contract, and leaving significant shortfalls in the size and capacity of the work force.
In some developing countries, these same trends will combine to expand the size of the working population and reduce the youth bulge - increasing the potential for economic growth and political stability.
Natural Resources and Environment: Overall food production will be adequate to feed the world's growing population, but poor infrastructure and distribution, political instability, and chronic poverty will lead to malnourishment in parts of Sub-Saharan Africa. The potential for famine will persist in countries with repressive government policies or internal conflicts. Despite a 50 percent increase in global energy demand, energy resources will be sufficient to meet demand; the latest estimates suggest that 80 percent of the world's available oil and 95 percent of its gas remain underground.
Although the Persian Gulf region will remain the world's largest single source of oil, the global energy market is likely to encompass two relatively distinct patterns of regional distribution: one serving consumers (including the United States) from Atlantic Basin reserves; and the other meeting the needs of primarily Asian customers (increasingly China and India) from Persian Gulf supplies and, to a lesser extent, the Caspian region and Central Asia.
In contrast to food and energy, water scarcities and allocation will pose significant challenges to governments in the Middle East, Sub-Saharan Africa, South Asia, and northern China. Regional tensions over water will be heightened by 2015.
Science and Technology: Fifteen years ago, few predicted the profound impact of the revolution in information technology. Looking ahead another 15 years, the world will encounter more quantum leaps in information technology (IT) and in other areas of science and technology. The continuing diffusion of information technology and new applications of biotechnology will be at the crest of the wave. IT will be the major building block for international commerce and for empowering nonstate actors. Most experts agree that the IT revolution represents the most significant global transformation since the Industrial Revolution beginning in the mid-eighteenth century.
The integration - or fusion - of continuing revolutions in information technology, biotechnology, materials science, and nanotechnology will generate a dramatic increase in investment in technology, which will further stimulate innovation within the more advanced countries.
Older technologies will continue lateral "sidewise development" into new markets and applications through 2015, benefiting US allies and adversaries around the world who are interested in acquiring early generation ballistic missile and weapons of mass destruction (WMD) technologies.
Biotechnology will drive medical breakthroughs that will enable the world's wealthiest people to improve their health and increase their longevity dramatically. At the same time, genetically modified crops will offer the potential to improve nutrition among the world's one billion malnourished people.
Breakthroughs in materials technology will generate widely available products that are multi-functional, environmentally safe, longer lasting, and easily adapted to particular consumer requirements.
Disaffected states, terrorists, proliferators, narcotraffickers, and organized criminals will take advantage of the new high-speed information environment and other advances in technology to integrate their illegal activities and compound their threat to stability and security around the world.
The Global Economy and Globalization: The networked global economy will be driven by rapid and largely unrestricted flows of information, ideas, cultural values, capital, goods and services, and people: that is, globalization. This globalized economy will be a net contributor to increased political stability in the world in 2015, although its reach and benefits will not be universal. In contrast to the Industrial Revolution, the process of globalization is more compressed. Its evolution will be rocky, marked by chronic financial volatility and a widening economic divide.
The global economy, overall, will return to the high levels of growth reached in the 1960s and early 1970s. Economic growth will be driven by political pressures for higher living standards, improved economic policies, rising foreign trade and investment, the diffusion of information technologies, and an increasingly dynamic private sector. Potential brakes on the global economy - such as a sustained financial crisis or prolonged disruption of energy supplies - could undo this optimistic projection.
Regions, countries, and groups feeling left behind will face deepening economic stagnation, political instability, and cultural alienation. They will foster political, ethnic, ideological, and religious extremism, along with the violence that often accompanies it. They will force the United States and other developed countries to remain focused on "old-world" challenges while concentrating on the implications of "new-world" technologies at the same time.
National and International Governance: States will continue to be the dominant players on the world stage, but governments will have less and less control over flows of information, technology, diseases, migrants, arms, and financial transactions, whether licit or illicit, across their borders. Nonstate actors ranging from business firms to nonprofit organizations will play increasingly larger roles in both national and international affairs. The quality of governance, both nationally and internationally, will substantially determine how well states and societies cope with these global forces.
States with competent governance, including the United States, will adapt government structures to a dramatically changed global environment--making them better able to engage with a more interconnected world. The responsibilities of once "semiautonomous" government agencies increasingly will intersect because of the transnational nature of national security priorities and because of the clear requirement for interdisciplinary policy responses. Shaping the complex, fast-moving world of 2015 will require reshaping traditional government structures.
Effective governance will increasingly be determined by the ability and agility to form partnerships to exploit increased information flows, new technologies, migration, and the influence of nonstate actors. Most but not all countries that succeed will be representative democracies.
States with ineffective and incompetent governance not only will fail to benefit from globalization, but in some instances will spawn conflicts at home and abroad, ensuring an even wider gap between regional winners and losers than exists today.
Globalization will increase the transparency of government decision-making, 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 also will create increasing demands for international cooperation on transnational issues, but the response of both states and international organizations will 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. The United States will face three types of threats:
Asymmetric threats in which state and nonstate adversaries avoid direct engagements with the US military but devise strategies, tactics, and weapons--some improved by "sidewise" technology--to minimize US strengths and exploit perceived weaknesses;
Strategic WMD threats, including nuclear missile threats, in which (barring significant political or economic changes) Russia, China, most likely North Korea, probably Iran, and possibly Iraq have the capability to strike the United States, and the potential for unconventional delivery of WMD by both states or nonstate actors also will grow; and Regional military threats in which a few countries maintain large military forces with a mix of Cold War and post-Cold War concepts and technologies.
The risk of war among developed countries will be low. The international community will continue, however, to face conflicts around the world, ranging from relatively frequent small-scale internal upheavals to less frequent regional interstate wars. The potential for conflict will arise from rivalries in Asia, ranging from India-Pakistan to China-Taiwan, as well as among the antagonists in the Middle East. Their potential lethality will grow, driven by the availability of WMD, longer-range missile delivery systems and other technologies.
Internal conflicts stemming from religious, ethnic, economic or political disputes will remain at current levels or even increase in number. The United Nations and regional organizations will be called upon to manage such conflicts because major states--stressed by domestic concerns, perceived risk of failure, lack of political will, or tight resources--will minimize their direct involvement.
Export control regimes and sanctions will be less effective because of the diffusion of technology, porous borders, defense industry consolidations, and reliance upon foreign markets to maintain profitability. Arms and weapons technology transfers will be more difficult to control.
Prospects will grow that more sophisticated weaponry, including weapons of mass destruction--indigenously produced or externally acquired--will get into the hands of state and nonstate belligerents, some hostile to the United States. The likelihood will increase over this period that WMD will be used either against the United States or its forces, facilities, and interests overseas.
Role of the United States: The United States will continue to be a major force in the world community. US global economic, technological, military, and diplomatic influence will be unparalleled among nations as well as regional and international organizations in 2015. This power not only will ensure America's preeminence, but also will cast the United States as a key driver of the international system.
The United States will continue to be identified throughout the world as the leading proponent and beneficiary of globalization. US economic actions, even when pursued for such domestic goals as adjusting interest rates, will have a major global impact because of the tighter integration of global markets by 2015.
The United States will remain in the vanguard of the technological revolution from information to biotechnology and beyond. Both allies and adversaries will factor continued US military pre-eminence in their calculations of national security interests and ambitions. Some states -adversaries and allies - will try at times to check what they see as American "hegemony." Although this posture will not translate into strategic, broad-based and enduring anti-US coalitions, it will lead to tactical alignments on specific policies and demands for a greater role in international political and economic institutions.
Diplomacy will be more complicated. Washington will have greater difficulty harnessing its power to achieve specific foreign policy goals: the US Government will exercise a smaller and less powerful part of the overall economic and cultural influence of the United States abroad.
In the absence of a clear and overriding national security threat, the United States will have difficulty drawing on its economic prowess to advance its foreign policy agenda. The top priority of the American private sector, which will be central to maintaining the US economic and technological lead, will be financial profitability, not foreign policy objectives.
The United States also will have greater difficulty building coalitions to support its policy goals, although the international community will often turn to Washington, even if reluctantly, to lead multilateral efforts in real and potential conflicts.
There will be increasing numbers of important actors on the world stage to challenge and check - as well as to reinforce - US leadership: countries such as China, Russia, India, Mexico, and Brazil; regional organizations such as the European Union; and a vast array of increasingly powerful multinational corporations and nonprofit organizations with their own interests to defend in the world.
3. Key Uncertainties: Technology Will Alter Outcomes
Examining the interaction of these drivers and trends points to some major uncertainties that will only be clarified as events occur and leaders make policy decisions that cannot be foreseen today. We cite eight transnational and regional issues for which the future, according to our trends analysis, is too tough to call with any confidence or precision.
These are high-stakes, national security issues that will require continuous analysis and, in the view of our conferees, periodic policy review in the years ahead.
Science and Technology: We know that the possibility is greater than ever that the revolution in science and technology will improve the quality of life. What we know about this revolution is exciting. Advances in science and technology will generate dramatic breakthroughs in agriculture and health and in leap-frog applications, such as universal wireless cellular communications, which already are networking developing countries that never had land-lines. What we do not know about the S&T revolution, however, is staggering. We do not know to what extent technology will benefit, or further disadvantage, disaffected national populations, alienated ethnic and religious groups, or the less developed countries. We do not know to what degree lateral or "side-wise" technology will increase the threat from low technology countries and groups. One certainty is that progression will not be linear. Another is that as future technologies emerge, people will lack full awareness of their wider economic, environmental, cultural, legal, and moral impact - or the continuing potential for research and development.
Advances in science and technology will pose national security challenges of uncertain character and scale. Increasing reliance on computer networks is making critical US infrastructures more attractive as targets. Computer network operations today offer new options for attacking the United States within its traditional continental sanctuary--potentially anonymously and with selective effects. Nevertheless, we do not know how quickly or effectively such adversaries as terrorists or disaffected states will develop the tradecraft to use cyber warfare tools and technology, or, in fact, whether cyber warfare will ever evolve into a decisive combat arm. Rapid advances and diffusion of biotechnology, nanotechnology, and the materials sciences, moreover, will add to the capabilities of our adversaries to engage in biological warfare or bio-terrorism.
Asymmetric Warfare: As noted earlier, most adversaries will recognize the information advantage and military superiority of the United States in 2015. Rather than acquiesce to any potential US military domination, they will try to circumvent or minimize US strengths and exploit perceived weaknesses. IT-driven globalization will significantly increase interaction among terrorists, narcotraffickers, weapons proliferators, and organized criminals, who in a networked world will have greater access to information, to technology, to finance, to sophisticated deception-and-denial techniques and to each other. Such asymmetric approaches--whether undertaken by states or nonstate actors--will become the dominant characteristic of most threats to the US homeland. They will 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 harness elements of proliferating advanced technologies. At the same time, we do not know the extent to which adversaries, state and nonstate, might be influenced or deterred by other geopolitical, economic, technological, or diplomatic factors in 2015.
The Global Economy: Although the outlook for the global economy appears strong, achieving broad and sustained high levels of global growth will be contingent on avoiding several potential brakes to growth. These include:
The US economy suffers a sustained downturn. Given its large trade deficit and low domestic savings, the US economy - the most important driver of recent global growth - is vulnerable to a loss of international confidence in its growth prospects that could lead to a sharp downturn, which, if long lasting, would have deleterious economic and policy consequences for the rest of the world.
Europe and Japan fail to manage their demographic challenges. European and Japanese populations are aging rapidly, requiring more than 110 million new workers by 2015 to maintain current dependency ratios between the working population and retirees. Conflicts over social services or immigration policies in major European states could dampen economic growth.
China and/or India fail to sustain high growth. China's ambitious goals for reforming its economy will be difficult to achieve: restructuring state-owned enterprises, cleaning up and transforming the banking system, and cutting the government's employment rolls in half. Growth would slow if these reforms go off-track. Failure by India to implement reforms would prevent it from achieving sustained growth.
Emerging market countries fail to reform their financial institutions. Many emerging market countries have not yet undertaken the financial reforms needed to help them survive the next economic crisis. Absent such reform, a series of future economic crises in emerging market countries probably will dry up the capital flows crucial for high rates of economic growth.
Global energy supplies suffer a major disruption. Turbulence in global energy supplies would have a devastating effect. Such a result could be driven by conflict among key energy-producing states, sustained internal instability in two or more major energy-producing states, or major terrorist actions.
The Middle East: Global trends from demography and natural resources to globalization and governance appear generally negative for the Middle East. Most regimes are change-resistant. Many are buoyed by continuing energy revenues and will not 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 the prospects for increased demographic pressures, social unrest, religious and ideological extremism, and terrorism directed both at the regimes and at their Western supporters. Nonlinear developments--such as the sudden rise of a Web-connected opposition, a sharp and sustained economic downturn, or, conversely, the emergence of enlightened leaders committed to good governance--might change outcomes in individual countries. Political changes in Iran in the late 1990s are an example of such nonlinear development.
China: Estimates of developments in China over the next 15 years are fraught with unknowables. Working against China's aspirations to sustain economic growth while preserving its political system is an array of political, social, and economic pressures that will increasingly challenge the regime's legitimacy, and perhaps its survival.
The sweeping structural changes required by China's entry into the World Trade Organization (WTO) and the broader demands of economic globalization and the information revolution will generate significantly new levels and types of social and economic disruption that will only add to an already wide range of domestic and international problems.
Nevertheless, China need not be overwhelmed by these problems. China has proven politically resilient, economically dynamic, and increasingly assertive in positioning itself for a leadership role in East Asia. Its long-term military program in particular suggests that Beijing wants to have the capability to achieve its territorial objectives, outmatch its neighbors, and constrain US power in the region.
We do not rule out the introduction of enough political reform by 2015 to allow China to adapt to domestic pressure for change and to continue to grow economically.
Two conditions, in the view of many specialists, would lead to a major security challenge for the United States and its allies in the region: a weak, disintegrating China, or an assertive China willing to use its growing economic wealth and military capabilities to pursue its strategic advantage in the region. These opposite extremes bound a more commonly held view among experts that China will continue to see peace as essential to its economic growth and internal stability.
Russia: Between now and 2015, Moscow will be challenged even more than today to adjust its expectations for world leadership to its dramatically reduced resources. Whether the country can make the transition in adjusting ends to means remains an open and critical question, according to most experts, as does the question of the character and quality of Russian governance and economic policies. The most likely outcome is a Russia that remains internally weak and institutionally linked to the international system primarily through its permanent seat on the UN Security Council. In this view, whether Russia can adjust to this diminished status in a manner that preserves rather than upsets regional stability is also uncertain. The stakes for both Europe and the United States will be high, although neither will have the ability to determine the outcome for Russia in 2015. Russian governance will be the critical factor.
Japan: The first uncertainty about Japan is whether it will carry out the structural reforms needed to resume robust economic growth and to slow its decline relative to the rest of East Asia, particularly China. The second uncertainty is whether Japan will alter its security policy to allow Tokyo to maintain a stronger military and more reciprocal relationship with the United States. Experts agree that Japanese governance will be the key driver in determining the outcomes.
India: Global trends conflict significantly in India. The size of its population - 1.2 billion by 2015 - and its technologically driven economic growth virtually dictate that India will be a rising regional power. The unevenness of its internal economic growth, with a growing gap between rich and poor, and serious questions about the fractious nature of its politics, all cast doubt on how powerful India will be by 2015. Whatever its degree of power, India's rising ambition will further strain its relations with China, as well as complicate its ties with Russia, Japan, and the West--and continue its nuclear standoff with Pakistan.
4. Key Challenges to Governance: People Will Decide
Global Trends 2015 identifies governance as a major driver for the future and assumes that all trends we cite will be influenced, for good or bad, by decisions of people. The inclusion of the United States as a driver - both the US Government as well as US for-profit and nonprofit organizations is based on the general assumption that the actions of nonstate actors as well as governments will shape global outcomes in the years ahead.
An integrated trend analysis suggests at least four related conclusions:
National Priorities Will Matter
* To prosper in the global economy of 2015, governments will have to invest more in technology, in public education, and in broader participation in government to include increasingly influential nonstate actors. The extent to which governments around the world are doing these things today gives some indication of where they will be in 2015.
US Responsibilities Will Cover the World, Old and New
* The United States and other developed countries will be challenged in 2015 to lead the fast-paced technological revolution while, at the same time, maintaining military, diplomatic, and intelligence capabilities to deal with traditional problems and threats from low-technology countries and groups. The United States, as a global power, will have little choice but to engage leading actors and confront problems on both sides of the widening economic and digital divides in the world of 2015, when globalization's benefits will be far from global.
US Foreign Priorities Will be More Transnational
* International or multilateral arrangements increasingly will be called upon in 2015 to deal with growing transnational problems from economic and financial volatility; to legal and illegal migration; to competition for scarce natural resources such as water; to humanitarian, refugee, and environmental crises; to terrorism, narcotrafficking, and weapons proliferation; and to both regional conflicts and cyber threats. And when international cooperation--or international governance--comes up short, the United States and other developed countries will have to broker solutions among a wide array of international players--including governments at all levels, multinational corporations, and nonprofit organizations.
National Governments Will be More Transparent
To deal with a transnational agenda and an interconnected world in 2015, governments will have to develop greater communication and collaboration between national security and domestic policy agencies. Interagency cooperation will be essential to understanding transnational threats and to developing interdisciplinary strategies to counter them. Consequence management of a biological warfare (BW) attack, for example, would require close coordination among a host of US Government agencies, foreign governments, US state and municipal governments, the military, the medical community, and the media.
5. Discussion
The international system in 2015 will be shaped by seven global drivers and related trends: population; natural resources and the environment; science and technology; the global economy and globalization; national and international governance; the nature of conflict; and the role of the United States. These trends will influence the capacities, priorities, and behavior of states and societies and thus substantially define the international security environment.
6. Population Trends
The world in 2015 will be populated by some 7.2 billion people, up from 6.1 billion in the year 2000. The rate of world population growth, however, will have diminished from 1.7 percent annually in 1985, to 1.3 percent today, to approximately 1 percent in 2015.
Increased life expectancy and falling fertility rates will contribute to a shift toward an aging population in high-income developed countries. Beyond that, demographic trends will sharply diverge. More than 95 percent of the increase in world population will be found in developing countries, nearly all in rapidly expanding urban areas.
India's population will grow from 900 million to more than 1.2 billion by 2015; Pakistan's probably will swell from 140 million now to about 195 million.
Some countries in Africa with high rates of AIDS will experience reduced population growth or even declining populations despite relatively high birthrates. In South Africa, for example, the population is projected to drop from 43.4 million in 2000 to 38.7 million in 2015.
Russia and many post-Communist countries of Eastern Europe will have declining populations. As a result of high mortality and low birthrates, Russia's population may drop from its current 146 million to as low as 130 to 135 million in 2015, while the neighboring states of Central Asia will experience continued population growth. In Japan and West European countries such as Italy and Spain, populations also will decline in the absence of dramatic increases in birthrates or immigration.
* North America, Australia, and New Zealand - the traditional magnets for migrants - will continue to have the highest rates of population growth among the developed countries, with annual population growth rates between 0.7 percent and 1.0 percent.
7. Divergent Aging Patterns
In developed countries and many of the more advanced developing countries, the declining ratio of working people to retirees will strain social services, pensions, and health systems. Governments will seek to mitigate the problem through such measures as delaying retirement, encouraging greater participation in the work force by women, and relying on migrant workers. Dealing effectively with declining dependency ratios is likely to require more extensive measures than most governments will be prepared to undertake. The shift towards a greater proportion of older voters will change the political dynamics in these countries in ways difficult to foresee.
At the same time, "youth bulges" will persist in some developing countries, notably in Sub-Saharan Africa and a few countries in Latin America and the Middle East. A high proportion of young people will be destabilizing, particularly when combined with high unemployment or communal tension.
8. Movement of People
Two major trends in the movement of people will characterize the next 15 years - urbanization and cross-border migration - each of which poses both opportunities and challenges.
Growth in Mega-Cities
The ratio of urban to rural dwellers is steadily increasing. By 2015 more than half of the world's population will be urban. The number of people living in mega-cities--those containing more than 10 million inhabitants--will double to more than 400 million.
Urbanization will provide many countries the opportunity to tap the information revolution and other technological advances.
The explosive growth of cities in developing countries will test the capacity of governments to stimulate the investment required to generate jobs and to provide the services, infrastructure, and social supports necessary to sustain livable and stable environments.
Divergent demographic trends, the globalization of labor markets, and political instability and conflict will fuel a dramatic increase in the global movement of people through 2015. Legal and illegal migrants now account for more than 15 percent of the population in more than 50 countries. These numbers will grow substantially and will increase social and political tension and perhaps alter national identities even as they contribute to demographic and economic dynamism.
States will face increasing difficulty in managing migration pressures and flows, which will number several million people annually. Over the next 15 years, migrants will seek to move:
To North America primarily from Latin America and East and South Asia.
To Europe primarily from North Africa and the Middle East, South Asia, and the post-Communist states of Eastern Europe and Eurasia.
From the least to the most developed countries of Asia, Latin America, the Middle East, and Sub-Saharan Africa.
For high-income receiving countries, migration will relieve labor shortages and otherwise ensure continuing economic vitality. EU countries and Japan will need large numbers of new workers because of aging populations and low birthrates. Immigration will complicate political and social integration: some political parties will continue to mobilize popular sentiment against migrants, protesting the strain on social services and the difficulties in assimilation. European countries and Japan will face difficult dilemmas in seeking to reconcile protection of national borders and cultural identity with the need to address growing demographic and labor market imbalances.
For low-income receiving countries, mass migration resulting from civil conflict, natural disasters, or economic crises will strain local infrastructures, upset ethnic balances, and spark ethnic conflict. Illegal migration will become a more contentious issue between and among governments.
For low-income sending countries, mass migration will relieve pressures from unemployed and underemployed workers and generate significant remittances. Migrants will function as ethnic lobbies on behalf of sending-country interests, sometimes supporting armed conflicts in their home countries, as in the cases of the Albanian, Kurdish, Tamil, Armenian, Eritrean, and Ethiopian diasporas. At the same time, emigration increasingly will deprive low-income sending countries of their educated elites. An estimated 1.5 million skilled expatriates from developing countries already are employed in high-income countries. This brain drain from low-income to high-income countries is likely to intensify over the next 15 years.
9. Health
Disparities in health status between developed and developing countries - particularly the least developed countries - will persist and widen. In developed countries, major inroads against a variety of maladies will be achieved by 2015 as a result of generous health spending and major medical advances. The revolution in biotechnology holds the promise of even more dramatic improvements in health status. Noninfectious diseases will pose greater challenges to health in developed countries than will infectious diseases. Progress against infectious diseases, nevertheless, will encounter some setbacks as a result of growing microbial resistance to antibiotics and the accelerating pace of international movement of people and products that facilitate the spread of infectious diseases.
Developing countries, by contrast, are likely to experience a surge in both infectious and noninfectious diseases and in general will have inadequate health care capacities and spending.
Tuberculosis, malaria, hepatitis, and particularly AIDS will continue to increase rapidly. AIDS and TB together are likely to account for the majority of deaths in most developing countries.
AIDS will be a major problem not only in Africa but also in India, Southeast Asia, several countries formerly part of the Soviet Union, and possibly China.
AIDS will reduce economic growth by up to 1 percent of GDP per year and consume more than 50 percent of health budgets in the hardest-hit countries. AIDS and such associated diseases as TB will have a destructive impact on families and society. In some African countries, average lifespans will be reduced by as much as 30 to 40 years, generating more than 40 million orphans and contributing to poverty, crime, and instability.
AIDS, other diseases, and health problems will hurt prospects for transition to democratic regimes as they undermine civil society, hamper the evolution of sound political and economic institutions, and intensify the struggle for power and resources.
10. Natural Resources and Environment
11. Food:
Driven by advances in agricultural technologies, world food grain production and stocks in 2015 will be adequate to meet the needs of a growing world population. Despite the overall adequacy of food, problems of distribution and availability will remain.
The number of chronically malnourished people in conflict-ridden Sub-Saharan Africa will increase by more than 20 percent over the next 15 years. The potential for famine will still exist where the combination of repressive government or internal conflict and persistent natural disasters prevents or limits relief efforts, as in Somalia in the early 1990s and North Korea more recently. Donors will become more reluctant to provide relief when the effort might become embroiled in military conflict.
The use of genetically modified crops has great potential for meeting the nutrition needs of the poor in developing countries. Popular and political opposition in the EU countries and, to a lesser extent, in the United States, however, has clouded the prospects for applying this technology.
12. Water
By 2015 nearly half the world's population - more than three billion people - will live in countries that are "water-stressed" - have less than 1,700 cubic meters of water per capita per year - mostly in Africa, the Middle East, South Asia, and northern China.
In the developing world, 80 percent of water usage goes into agriculture, a proportion that is not sustainable; and in 2015 a number of developing countries will be unable to maintain their levels of irrigated agriculture. Overpumping of groundwater in many of the world's important grain-growing regions will be an increasing problem; about 1,000 tons of water are needed to produce a ton of grain.
The water table under some of the major grain-producing areas in northern China is falling at a rate of five feet per year, and water tables throughout India are falling an average of 3-10 feet per year.
Measures undertaken to increase water availability and to ease acute water shortages - using water more efficiently, expanding use of desalinization, developing genetically modified crops that use less water or more saline water, and importing water - will not be sufficient to substantially change the outlook for water shortages in 2015. Many will be expensive; policies to price water more realistically are not likely to be broadly implemented within the next 15 years, and subsidizing water is politically sensitive for the many low-income countries short of water because their populations expect cheap water.
Water has been a source of contention historically, but no water dispute has been a cause of open interstate conflict; indeed, water shortages often have stimulated cooperative arrangements for sharing the scarce resource. But as countries press against the limits of available water between now and 2015, the possibility of conflict will increase.
Nearly one-half of the world's land surface consists of river basins shared by more than one country, and more than 30 nations receive more than one-third of their water from outside their borders.
Turkey is building new dams and irrigation projects on the Tigris and Euphrates Rivers, which will affect water flows into Syria and Iraq--two countries that will experience considerable population growth.
Egypt is proceeding with a major diversion of water from the Nile, which flows from Ethiopia and Sudan, both of which will want to draw more water from the Nile for their own development by 2015. Water-sharing arrangements are likely to become more contentious.
Water shortages occurring in combination with other sources of tension--such as in the Middle East - will be the most worrisome.
13. Energy
The global economy will continue to become more energy efficient through 2015. Traditional industries, as well as transportation, are increasingly efficient in their energy use. Moreover, the most dynamic growth areas in the global economy, especially services and the knowledge fields, are less energy intensive than the economic activities that they replace. Energy production also is becoming more efficient. Technological applications, particularly in deep-water exploration and production, are opening remote and hostile areas to petroleum production.
Sustained global economic growth, along with population increases, will drive a nearly 50 percent increase in the demand for energy over the next 15 years. Total oil demand will increase from roughly 75 million barrels per day in 2000 to more than 100 million barrels in 2015, an increase almost as large as OPEC's current production. Over the next 15 years, natural gas usage will increase more rapidly than that of any other energy source - by more than 100 percent--mainly stemming from the tripling of gas consumption in Asia.
Asia will drive the expansion in energy demand, replacing North America as the leading energy consumption region and accounting for more than half of the world's total increase in demand.
China, and to a lesser extent India, will see especially dramatic increases in energy consumption.
By 2015, only one-tenth of Persian Gulf oil will be directed to Western markets; three-quarters will go to Asia.
Fossil fuels will remain the dominant form of energy despite increasing concerns about global warming. Efficiency of solar cells will improve, genetic engineering will increase the long-term prospects for the large-scale use of ethanol, and hydrates will be used increasingly as fuels. Nuclear energy use will remain at current levels.
Meeting the increase in demand for energy will pose neither a major supply challenge nor lead to substantial price increases in real terms. Estimates of the world's total endowment of oil have steadily increased as technological progress in extracting oil from remote sources has enabled new discoveries and more efficient production. Recent estimates indicate that 80 percent of the world's available oil still remains in the ground, as does 95 percent of the world's natural gas.
The Persian Gulf region - absent a major war - will see large increases in oil production capacity and will rise in its overall importance to the world energy market. Other areas of the world - including Russia, coastal West Africa, and Greenland - will also increase their role in global energy markets. Russia and the Middle East account for three-quarters of known gas reserves.
Latin America - principally Venezuela, Mexico, and Brazil - has more than 117 billion barrels of proven oil reserves and potentially 114 billion barrels of undiscovered oil, according to the US Geological Survey. With foreign participation, Latin American production could increase from 9 million barrels per day to more than 14 million.
Caspian energy development is likely to be in high gear by 2015. New transport routes for Caspian oil and gas exports that do not transit Russia will be operating.
Oil-producing countries will continue to exert leverage on the market to increase prices but are unlikely to achieve stable high prices. Energy prices are likely to become more unstable in the next 15 years, as periodic price hikes are followed by price collapses.
By 2015, global energy markets will have coalesced into two quasi-hemispheric patterns. Asia's energy needs will be met either through coal from the region or from oil and gas supplies from the Persian Gulf, Central Asia, and Russia. Western Europe and the Western Hemisphere will draw on the Atlantic Basin for their energy sources at world prices.
14. Environment
Contemporary environmental problems will persist and in many instances grow over the next 15 years. With increasingly intensive land use, significant degradation of arable land will continue as will the loss of tropical forests. Given the promising global economic outlook, greenhouse gas emissions will increase substantially. The depletion of tropical forests and other species-rich habitats, such as wetlands and coral reefs, will exacerbate the historically large losses of biological species now occurring.
Environmental issues will become mainstream issues in several countries, particularly in the developed world. The consensus on the need to deal with environmental issues will strengthen; however, progress in dealing with them will be uneven.
The outlook to 2015 is mixed for such localized environmental problems as high concentrations of ozone and noxious chemicals in the air and the pollution of rivers and lakes by industrial and agricultural wastes.
Developed countries will continue to manage these local environmental issues, and such issues are unlikely to constitute a major constraint on economic growth or on improving health standards.
The developing countries, however, will face intensified environmental problems as a result of population growth, economic development, and rapid urbanization. An increasing number of cities will face the serious air and water quality problems that already are troubling in such urban centers as Mexico City, Sao Paulo, Lagos, and Beijing.
Russia and Ukraine will struggle with problems stemming from decades of environmental neglect and abuse, including widespread radioactive pollution from badly managed nuclear facilities. These problems are unlikely to be adequately addressed. As these countries pursue economic growth, they will devote insufficient resources to environmental remediation.
Central and Eastern European countries face similar problems as a result of the legacy of environmental neglect from the Communist era; nevertheless, driven by their desire to gain EU membership, several will become more effective in addressing these problems and will upgrade their environmental standards.
Some existing agreements, even when implemented, will not be able by 2015 to reverse the targeted environmental damage they were designed to address. The Montreal Protocol is on track to restore the stratospheric ozone layer over the next 50 years. Nevertheless, the seasonal Antarctic ozone hole will expand for the next two decades - increasing the risk of skin cancer in countries like Australia, Argentina, and Chile - because of the long lag time between emission reductions and atmospheric effects. Important new agreements will be implemented, including, for example, a global treaty to control the worldwide spread of such persistent organic chemicals as DDT and dioxins. Other agreements, such as the Convention on Biodiversity, will fall short in meeting their objectives.
Over the next 15 years the pressures on the environment as a result of economic growth will decrease as a result of less energy-intensive economic development and technological advances. For example, increased use of fuel cells and hybrid engines is likely to reduce the rate of increase in the amount of pollution produced, particularly in the transportation sector. Also, increases in the utilization of solar and wind power, advances in the efficiency of energy use, and a shift toward less polluting fuels, such as natural gas, will contribute to this trend.
Global warming will challenge the international community as indications of a warming climate - such as meltbacks of polar ice, sea level rise, and increasing frequency of major storms- occur. The Kyoto Protocol on Climate Change, which mandates emission-reduction targets for developed countries, is unlikely to come into force soon or without substantial modification. Even in the absence of a formal treaty, however, some incremental progress will be made in reducing the growth of greenhouse gas emissions.
Both India and China will actively explore less carbon-intensive development strategies, although they will resist setting targets or timetables for carbon dioxide emission limits.
A number of major firms operating internationally will take steps to reduce greenhouse gas emissions.
15. Science and Technology
The continuing diffusion of information technology and new applications in the biotechnology field will be of particular global significance. Two major trends will continue:
* The integration of existing disciplines to form new ones. The integration of information technology, biotechnology, materials sciences, and nanotechnology will generate a dramatic increase in innovation. The effects will 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, developing innovative applications for "old" computer chips.
The time between the discovery and the application of scientific advances will continue to shorten. Developments in the laboratory will reach commercial production at ever faster rates, leading to increased investments.
16. Information Technology (IT)
Over the next 15 years, a wide range of developments will lead to many new IT-enabled devices and services. Rapid diffusion is likely because equipment costs will decrease at the same time that demand is increasing. Local-to-global Internet access holds the prospect of universal wireless connectivity via hand-held devices and large numbers of low-cost, low-altitude satellites. Satellite systems and services will develop in ways that increase performance and reduce costs.
By 2015, information technology will make major inroads in rural as well as urban areas around the globe. Moreover, information technology need not be widespread to produce important effects. The first information technology "pioneers" in each society will be the local economic and political elites, multiplying the initial impact.
Some countries and populations, however, will fail to benefit much from the information revolution.
Among developing countries, India will remain in the forefront in developing information technology, led by the growing class of high-tech workers and entrepreneurs.
China will lead the developing world in utilizing information technology, with urban areas leading the countryside. Beijing's capacity to control or shape the content of information, however, is likely to be sharply reduced.
Although most Russian urban-dwellers will adopt information technologies well before 2015, the adoption of such technologies will be slow in the broader population.
Latin America's Internet market will grow exponentially. Argentina, Mexico, and Brazil will accrue the greatest benefits because of larger telecommunications companies, bigger markets, and more international investment.
In Sub-Saharan Africa, South Africa is best positioned to make relatively rapid progress in IT.
Societies with advanced communications generally will worry about threats to individual privacy. Others will worry about the spread of "cultural contamination." Governments everywhere will be simultaneously asked to foster the diffusion of IT while controlling its "harmful" effects.
17. Biotechnology
By 2015, the biotechnology revolution will be in full swing with major achievements in combating disease, increasing food production, reducing pollution, and enhancing the quality of life. Many of these developments, especially in the medical field, will remain costly through 2015 and will be available mainly in the West and to wealthy segments of other societies. Some biotechnologies will continue to be controversial for moral and religious reasons. Among the most significant developments by 2015 are:
Genomic profiling - by decoding the genetic basis for pathology - will enable the medical community to move beyond the description of diseases to more effective mechanisms for diagnosis and treatment.
Biomedical engineering, exploiting advances in biotechnology and "smart" materials, will produce new surgical procedures and systems, including better organic and artificial replacement parts for human beings, and the use of unspecialized human cells (stem cells) to augment or replace brain or body functions and structures. It also will spur development of sensor and neural prosthetics such as retinal implants for the eye, cochlear implants for the ear, or bypasses of spinal and other nerve damage.
Therapy and drug developments will cure some enduring diseases and counter trends in antibiotic resistance. Deeper understanding of how particular diseases affect people with specific genetic characteristics will facilitate the development and prescription of custom drugs.
Genetic modification - despite continuing technological and cultural barriers - will improve the engineering of organisms to increase food production and quality, broaden the scale of bio-manufacturing, and provide cures for certain genetic diseases. Cloning will be used for such applications as livestock production. Despite cultural and political concerns, the use of genetically modified crops has great potential to dramatically improve the nutrition and health of many of the world's poorest people.
DNA identification will continue to improve law enforcement capabilities.
18. Other Technologies
Breakthroughs in materials technology will generate widely available products that are smart, multifunctional, environmentally compatible, more survivable, and customizable. These products not only will contribute to the growing information and biotechnology revolutions but also will benefit manufacturing, logistics, and personal lifestyles. Materials with active capabilities will be used to combine sensing and actuation in response to environmental conditions.
Discoveries in nanotechnology will lead to unprecedented understanding and control over the fundamental building blocks of all physical things. Developments in this emerging field are likely to change the way almost everything - from vaccines to computers to automobile tires to objects not yet imagined - is designed and made. Self-assembled nanomaterials, such as semiconductor "quantum dots," could by 2015 revolutionize chemical labeling and enable rapid processing for drug discovery, blood content analysis, genetic analysis, and other biological applications.
19. The Global Economy
The global economy is well-positioned to achieve a sustained period of dynamism through 2015. Global economic growth will return to the high levels reached in the 1960s and early 1970s, the final years of the post-World War II "long boom." Dynamism will be strongest among so-called "emerging markets" - especially in the two Asian giants, China and India - but will be broadly based worldwide, including in both industrialized and many developing countries. The rising tide of the global economy will create many economic winners, but it will not lift all boats. The information revolution will make the persistence of poverty more visible, and regional differences will remain large.
20. Dynamism and Growth
Five factors will combine to promote widespread economic dynamism and growth:
Political pressures for higher living standards. The growing global middle class--now 2 billion strong--is creating a cycle of rising aspirations, with increased information flows and the spread of democracy giving political clout to formerly disenfranchised citizens.
Improved macroeconomic policies. The widespread improvement in recent years in economic policy and management sets the stage for future dynamism. Inflation rates have been dramatically lowered across a wide range of economies. The abandonment of unsustainable fixed exchange rate regimes in Asia and the creation of the European Monetary Union (EMU) will contribute to economic growth.
Rising trade and investment. International trade and investment flows will grow, spurring rapid increases in world GDP. Opposition to further trade liberalization from special interest groups and some governments will not erode the basic trend toward expansion of trade. International capital flows, which have risen dramatically in the past decade, will remain plentiful, especially for emerging market countries that increase their transparency.
Diffusion of information technology. The pervasive incorporation of information technologies will continue to produce significant efficiency gains in the US economy. Similar gains will be witnessed--albeit in varying degrees--in numerous other countries as the integration of these technologies proceeds. But the absorption of IT and its benefits will not be automatic because many countries will fail to meet the conditions needed for effective IT utilization--high educational levels, adequate infrastructure, and appropriate regulatory policies.
Increasingly dynamic private sectors. Rapid expansion of the private sector in many emerging market countries - along with deregulation and privatization in Europe and Japan - will spur economic growth by generating competitive pressures to use resources more efficiently. The impact of improved efficiencies will be multiplied as the information revolution enhances the ability of firms around the world to learn "best practices" from the most successful enterprises. Indeed, the world may be on the verge of a rapid convergence in market-based financial and business practices.
21. Unequal Growth Prospects and Distribution
The countries and regions most at risk of falling behind economically are those with endemic internal and/or regional conflicts and those that fail to diversify their economies. The economies of most states in Sub-Saharan Africa and the Middle East and some in Latin America will continue to suffer. A large segment of the Eurasian landmass extending from Central Asia through the Caucasus to parts of southeastern Europe faces dim economic prospects. Within countries, the gap in the standard of living also will increase. Even in rapidly growing countries, large regions will be left behind.
Emerging Asia will be the fastest growing region, led by breakout candidates China and India, whose economies already comprise roughly one-sixth of global GDP. To the degree that China implements reforms mandated by its entry into the World Trade Organization, its economy will become more efficient, enabling rapid growth to continue. China's economic development, however, will be mainly in the dynamic coastal provinces. Agricultural provinces in northern and western China will lag behind, causing social tensions that Beijing will be challenged to manage. India's relatively strong educational system, democracy, and English-language skills position it well to take advantage of gains related to information technology. India nevertheless faces enormous challenges in spreading the benefits of growth to hundreds of millions of impoverished, often illiterate citizens, particularly in the northern states.
In Europe and Japan, the picture is mixed. Western Europe is likely to narrow what has been a growing economic performance gap with the United States, and Eastern European countries, eager for EU membership, generally will adopt reform policies and grow apace. South-Eastern Europe will improve economic prospects only gradually as it improves regional security. Although Japan's economic performance in the next 15 years will be stronger than that of the 1990s, its relative importance in the global economy will decrease. Economic prospects for Russia and Eurasia are not promising.
Latin America will manage fairly rapid aggregate growth, but it will be spread unevenly across the region. The market-oriented democracies in Mexico and the southern cone will lead the way. A new generation of entrepreneurs will be inclined to favor additional market openings, but the benefits may further distort income distribution, already the most inequitable in the world. Elsewhere, the Andean region will struggle with a poorly educated labor force, unstable governance, and dependence upon commodities such as oil, copper, and narcotics.
The Middle East and North Africa will be marked by increasing internal differentiation as some countries respond more effectively to the challenges of globalization or to the uncertainties of closer integration with the EU while others lag. In Sub-Saharan Africa, persistent conflicts and instability, autocratic and corrupt governments, overdependence on commodities with declining real prices, low levels of education, and widespread infectious diseases will combine to prevent most countries from experiencing rapid economic growth.
The Role of Education: Education will be determinative of success in 2015 at both the individual and country levels. The globalizing economy and technological change inevitably place an increasing premium on a more highly skilled labor force. Adult literacy and school enrollments will increase in almost all countries. The educational gender gap will narrow and probably will disappear in East and Southeast Asia and Latin America.
Progress will vary among regions, countries, and social groups, triggering increased income inequalities within as well as among countries.
School enrollments will decline in the most highly impoverished countries, in those affected by serious internal conflicts, and in those with high rates of infectious diseases.
22. Economic Crises and Resilience
The global economy will be prone to periodic financial crises, but its capacity to correct itself will remain strong. The rapid rebound from the global financial crisis of 1997-98, the limited impact of the recent tripling of oil prices on global economic growth, and the successful management of the "Y2K" problem are the most recent manifestations of resilience. Nonetheless, economic liberalization and globalization entail risks and inevitably will create bumps in the road, some of them potentially highly disruptive.
Economic crises will recur. The trends toward free markets and deregulation will allow financial markets to overshoot, increase the possibility for sudden reversal in sentiment, and expose individual countries to broad swings in the global market. Any of these could trigger a financial crisis.
Turbulence in one economy will affect others. Increased trade links and the integration of global financial markets will quickly transmit turmoil in one economy regionally and internationally, as Russia's financial turmoil in 1998 affected Brazil.
Disputes over international economic rules. The Asian financial crisis revealed differences among countries regarding global financial architecture. As emerging market countries continue to grow, they will seek a stronger voice in setting the terms of international economic governance. A lack of consensus could at times make financial markets skittish and undermine growth.
Alternative Trajectories: Although the outlook for the global economy appears quite strong, achieving sustained high levels of global growth will be contingent on avoiding several potential brakes to growth. Five are described below.
The US economy suffers a sustained downturn. Given the large trade deficit and low domestic savings, the US economy - the most important driver of recent global growth - is vulnerable to loss of international confidence in its growth prospects that could lead to a sharp downturn, which, if long-lasting, would have deleterious economic and policy consequences for the rest of the world. Key trading partners would suffer as the world's largest market contracted, and international financial markets might face profound instability.
Europe and Japan fail to manage their demographic challenges. European and Japanese populations are aging rapidly, requiring more than 110 million new workers by 2015 to maintain current dependency ratios between the working population and retirees. For these countries, immigration is a controversial means of meeting these labor force requirements. Conflicts over the social contract or immigration policies in major European states could dampen economic growth. Japan faces an even more serious labor force shortage and its strategies for responding - enticing overseas Japanese to return, broadening the opportunities for women, and increasing investments elsewhere in Asia - may prove inadequate. If growth in Europe and Japan falters, the economic burden on the US economy would increase, weakening the overall global outlook.
China and/or India fail to sustain high growth. China's ambitious goals for reforming its economy will be difficult to realize: restructuring state-owned enterprises, cleaning up and transforming the banking system, cutting the government's employment rolls in half, and opening up the economy to greater foreign competition. Growth would slow if these reforms go awry, which, in turn, would exacerbate bureaucratic wrangling and increase opposition to the reform agenda. India's reform drive - essential to sustained economic growth - could be sidetracked by social divisions and by the bureaucratic culture of the public service.
Emerging market countries fail to reform their financial institutions. Although most emerging market countries bounced back from the 1997-98 financial crisis more quickly than expected, many have not yet undertaken the financial reforms needed to help them survive the next economic crisis. Absent such reform, a series of future economic crises in emerging market countries could dry up the capital flows crucial for high rates of economic growth.
Global energy supplies are disrupted in a major way. Although the world economy is less vulnerable to energy price swings than in the 1970s, a major disruption in global energy supplies still would have a devastating effect. Conflict among key energy-producing states, sustained internal instability in two or more major energy-producing states, or major terrorist actions could lead to such a disruption.
23. National and International Governance
The state will remain the single most important organizing unit of political, economic, and security affairs through 2015 but will confront fundamental tests of effective governance. The first will be to benefit from, while coping with, several facets of globalization. The second will be to deal with increasingly vocal and organized publics.
The elements of globalization - greater and freer flow of information, capital, goods, services, people, and the diffusion of power to nonstate actors of all kinds - will challenge the authority of virtually all governments. At the same time, globalization will create demands for increased international cooperation on transnational issues.
All states will confront popular demands for greater participation in politics and attention to civil rights - pressures that will encourage greater democratization and transparency. Twenty-five years ago less than a third of states were defined as democracies by Freedom House; today more than half of states are considered democracies, albeit with varying combinations of electoral and civil or political rights. The majority of states are likely to remain democracies in some sense over the next 15 years, but the number of new democracies that are likely to develop is uncertain.
Successful states will interact with nonstate actors to manage authority and share responsibility. Between now and 2015, three important challenges for states will be:
- Managing relations with nonstate actors;
- Combating criminal networks; and
- Responding to emerging and dynamic religious and ethnic groups.
24. Nonstate Actors
States continually will be dealing with private-sector organizations - both for-profit and nonprofit. These nonstate actors increasingly will gain resources and power over the next 15 years as a result of the ongoing liberalization of global finance and trade, as well as the opportunities afforded by information technology.
The For-profit Sector. The for-profit business sector will grow rapidly over the next 15 years, spearheading legal and judicial reform and challenging governments to become more transparent and predictable. At the same time, governments will be challenged to monitor and regulate business firms through measures consistent with local standards of social welfare.
Multinational corporations - now numbering more than 50,000 with nearly one-half million affiliates - have multiplied in recent years as governments have deregulated their economies, privatized state-owned enterprises, and liberalized financial markets and trade. This trend will continue.
Medium-sized, mostly local firms will multiply in many countries, driven by the shift away from Communism and other socialist models and the broadening of financial services and banking systems. Micro-enterprises also will multiply, not only because of deregulation and liberalization, but also because many states will have a declining capacity to stymie small-scale commercial activities. As medium-sized and small businesses become more numerous, they will encourage, and then link into, various global networks.
The Nonprofit Sector. Nonprofit networks with affiliates in more than one country will grow through 2015, having expanded more than 20-fold between 1964 and 1998. Within individual countries, the nonprofit sector also will expand rapidly.
The Role of the Nonprofit Sector: Nonprofit organizations deliver critical services to individuals and private groups, with 67 percent of nonprofit activities in health, education, and social services alone. They provide information and expertise, advocate policies on behalf of their interests, and work through international organizations, both as implementing partners and as advocates. In many development projects and humanitarian emergencies, nonprofits will continue to deliver most of the aid from governments and international organizations.
Over the next 15 years international and national nonprofits will not only expand but change in significant ways.
Nonprofit organizations will have more resources to expand their activities and will become more confident of their power and more confrontational. Nonprofits will move beyond delivering services to the design and implementation of policies, whether as partners or competitors with corporations and governments.
Western preponderance will persist but at a declining level as economic growth in Asia and Latin America produces additional resources for support of civil society. In addition, autocratic governments and Islamic states or groups will increasingly support nonprofit groups sympathetic to their interests.
Nonprofit organizations will be expected to meet codes of conduct. Governments and corporations - which are increasingly held to standards of transparency and accountability - will, in turn, expect nonprofits to meet similar standards.
25. Criminal Organizations and Networks
Over the next 15 years, transnational criminal organizations will become increasingly adept at exploiting the global diffusion of sophisticated information, financial, and transportation networks.
Criminal organizations and networks based in North America, Western Europe, China, Colombia, Israel, Japan, Mexico, Nigeria, and Russia will expand the scale and scope of their activities. They will form loose alliances with one another, with smaller criminal entrepreneurs, and with insurgent movements for specific operations. They will corrupt leaders of unstable, economically fragile or failing states, insinuate themselves into troubled banks and businesses, and cooperate with insurgent political movements to control substantial geographic areas. Their income will come from narcotics trafficking; alien smuggling; trafficking in women and children; smuggling toxic materials, hazardous wastes, illicit arms, military technologies, and other contraband; financial fraud; and racketeering.
The risk will increase that organized criminal groups will traffic in nuclear, biological, or chemical weapons. The degree of risk depends on whether governments with WMD capabilities can or will control such weapons and materials.
Crime and Corruption Pay: Available data suggest that current annual revenues from illicit criminal activities include: $100-300 billion from narcotics trafficking; $10-12 billion from toxic and other hazardous waste dumping; $9 billion from automobile theft in the United States and Europe; $7 billion from alien smuggling; and as much as $1 billion from theft of intellectual property through pirating of videos, software, and other commodities.
Available estimates suggest that corruption costs about $500 billion - or about 1 percent of global GNP - in slower growth, reduced foreign investment, and lower profits. For example, the average cost of bribery to firms doing business in Russia is between 4 and 8 percent of annual revenue, according to the European Bank for Reconstruction and Development.
26. Changing Communal Identities and Networks
Traditional communal groups - whether religious or ethnic-linguistic groups - will pose a range of challenges for governance. Using opportunities afforded by globalization and the opening of civil society, communal groups will be better positioned to mobilize coreligionists or ethnic kin to assert their interests or defend against perceived economic or political discrimination. Ethnic diasporas and coreligionists abroad also will be more able and willing to provide fraternal groups with political, financial, and other support.
By 2015, Christianity and Islam, the two largest religious groupings, will have grown significantly. Both are widely dispersed in several continents, already use information technologies to "spread the faith," and draw on adherents to fund numerous nonprofit groups and political causes. Activist components of these and other religious groupings will emerge to contest such issues as genetic manipulation, women's rights, and the income gap between rich and poor. A wider religious or spiritual movement also may emerge, possibly linked to environmental values.
Estimates of the number of distinct ethnic-linguistic groups at the beginning of the twenty-first century run from 2,000 to 5,000, ranging from small bands living in isolated areas to larger groups living in ancestral homelands or in diasporas. Most of the world's 191 states are ethnically heterogeneous, and many contain ethnic populations with co-ethnics in neighboring states. By 2015, ethnic heterogeneity will increase in almost all states, as a result of international migration and divergent birthrates of migrant and native populations.
Communal tensions, sometimes culminating in conflict, probably will increase through 2015. In addition to some ongoing communal frictions that will persist, triggers of new tensions will include:
Repression by the state. States with slow economic growth, and/or where executive power is concentrated in an exclusionary political elite and the rule of law and civil or minority rights are weak, will be inclined to discriminate against communal minorities. Such conditions will foment ethnic tensions in Sub-Saharan Africa, Central and South Asia, and parts of the Middle East, often in rapidly growing urban areas. Certain powerful states - such as Russia, China, Brazil, and India - also are likely to repress politicized communal minorities.
Religious, often fused with ethnic, grievances. Few Muslim states will grant full political and cultural rights to religious minorities. At the same time, they will not remain indifferent to the treatment of Muslim minorities elsewhere: in Russia, Indonesia, India/Kashmir, China, and the Balkans. Other religious denominations also will support beleaguered coreligionists.
Resistance to migration. Some relatively homogenous countries or sub-regions in Asia and Europe will resist ethnically diverse migrants, creating tensions.
Indigenous protest movements. Such movements will increase, facilitated by transnational networks of indigenous rights activists and supported by well-funded international human rights and environmental groups. Tensions will intensify in the area from Mexico through the Amazon region; northeastern India; and the Malaysian-Indonesian archipelago.
27. Overall Impact on States
The developed democracies will be best positioned for good governance because they will tend to empower legitimate nonstate actors in both the for-profit and nonprofit sectors; will favor institutions and processes that accommodate divergent communal groups; will press for transparency in government and the efficient delivery of public services; and will maintain institutions to regulate legitimate for-profit and nonprofit organizations and control illegitimate criminal groups. Countries in Western Europe, Canada, Australia, New Zealand, and Japan have the requisite agility and institutions to meet the challenges. Countries in Eastern Europe as well as Turkey, South Korea, India, Chile, and Brazil, among other developing countries, are moving in these directions, despite some continuing obstacles.
Some newly democratic states and modernizing authoritarian states will have leaders amenable to technological change and access to substantial human and financial resources. They will encourage business firms, nonprofits, and communal groups supportive of the government and discourage or suppress those that are independent-minded or critical of government policies. They will have some success in coping with the energy, ideas, and resources of nonstate actors. Several Asian countries, such as Singapore, Taiwan, and perhaps China, as well as some states in the Middle East and Latin America are likely to take this approach.
Other states in varying degrees will lack the resources and leadership to achieve effective governance. Most autocratic states in the Middle East and Africa will not have the institutions or cultural orientation to exploit the opportunities provided by nonstate actors - apart from certain forms of humanitarian assistance. In many of these countries, nonstate actors will become more important than governments in providing services, such as health clinics and schools. In the weakest of these countries, communal, criminal, or terrorist groups will seek control of government institutions and/or territory.
Overall, the number of states - which has more than tripled since 1945 and has grown 20 percent since 1990 - is likely to increase at a slower rate through 2015. This growth will result from remaining cases of decolonization and to communal tensions leading to state secession, most likely in Sub-Saharan Africa, Central Asia, and Indonesia. In some cases, new states will inspire other secessionist movements, destabilizing countries where minorities were not initially seeking secession.
At the same time, the very concept of "belonging" to a particular state probably will erode among a growing number of people with continuing transnational ties to more than one country through citizenship, residence or other associations.
28. International Cooperation
Globalization and technological change are raising widespread expectations that increased international cooperation will help manage many transnational problems that states can no longer manage on their own. Efforts to realize such expectations will increase, but concerns about national interests as well as the costs and risks involved in some types of international activism will limit success.
Mechanisms of international cooperation - intended to facilitate bargaining, elucidate common interests and resolve differences among states - have increased rapidly in recent decades.
International treaties registered with the United Nations more than tripled between 1970 and 1997. In addition, there are growing numbers of agreements on standards and practices initiated by self-selected private networks.
The number of international institutions increased by two-thirds from 1985 until 1999, while at the same time becoming more complex, more interrelated with often overlapping areas of responsibility, and more closely linked to transnational networks and private groups.
International cooperation will continue to increase through 2015, particularly when large economic stakes have mobilized the for-profit sector, and/or when there is intense interest from nonprofit groups and networks.
Most high-income democratic states will participate in multiple international institutions and seek cooperation on a wide range of issues to protect their interests and to promote their influence. Members of the European Union will tackle the most ambitious agenda, including significant political and security cooperation.
Strongly nationalistic and/or autocratic states will play selective roles in inter-governmental organizations: working within them to protect and project their interests, while working against initiatives that they view as threatening to their domestic power structures and national sovereignty. They will also work against those international institutions viewed as creatures of the established great powers and thus rigged against them - such as the IMF and the WTO - as well as those that cede a major role to nonstate actors.
Low-income developing countries will participate actively in international organizations and arrangements to assert their sovereignty, garner resources for social and economic development, and gain support for the incumbent government. The most unstable of these states will participate in international organizations and arrangements primarily to maintain international recognition for the regime.
Cooperation is likely to be effective in such areas as:
- Monitoring international financial flows and financial safehavens.
- Law enforcement against corruption, and against trafficking in narcotics and women and children.
- Monitoring meteorological data and warning of extreme weather events.
- Selected environmental issues, such as reducing substances that deplete the ozone layer or conserving high-seas fisheries.
- Developing vaccines or medicines against major infectious diseases, such as HIV/AIDS or malaria and surveillance of infectious disease outbreaks.
- Humanitarian assistance for refugees and for victims of famines, natural disasters, and internal conflicts where relief organizations can gain access.
- Counterterrorism.
- Efforts by international and regional organizations to resolve some internal and interstate conflicts, particularly in Africa.
Cooperation is likely to be contentious and with mixed results in such areas as:
- Conditions under which Intellectual Property Rights are protected.
- Reform and strengthening of international financial institutions, particularly the Bretton Woods institutions.
- Expansion of the UN Security Council.
- Adherence by major states to an International Criminal Court with universal, comprehensive jurisdiction.
- Control of greenhouse gas emissions to reduce global warming, carrying out the purposes of the 1997 Kyoto Protocol on Climate Change.
- Acceptance of genetically-modified organisms to improve nutrition and health in poor regions.
- Establishing peacekeeping forces and standby military forces under the authority of the UN Security Council or most regional organizations, with the possible exception of the EU.
- Military action by forces authorized by the United Nations to correct abuses of human rights within states, pursuant to an asserted principle of humanitarian intervention or an expanded right of secession. Although "coalitions of the willing" will undertake such operations from time to time, a significant number of states will continue to view such interventions as illegitimate interference in the internal affairs of sovereign states.
- Proposed new rights to enjoy or appropriate elements of the "global commons," such as a right to "open borders" for people from lower-income countries.
29. Future Conflict
Through 2015, internal conflicts will pose the most frequent threat to stability around the world. Interstate wars, though less frequent, will grow in lethality due to the availability of more destructive technologies. The international community will have to deal with the military, political, and economic dimensions of the rise of China and India and the continued decline of Russia.
30. Internal Conflicts
Many internal conflicts, particularly those arising from communal disputes, will continue to be vicious, long-lasting and difficult to terminate - leaving bitter legacies in their wake.
They frequently will spawn internal displacements, refugee flows, humanitarian emergencies, and other regionally destabilizing dislocations.
If left to fester, internal conflicts will trigger spillover into inter-state conflicts as neighboring states move to exploit opportunities for gain or to limit the possibilities of damage to their national interests.
Weak states will spawn recurrent internal conflicts, threatening the stability of a globalizing international system.
Internal conflicts stemming from state repression, religious and ethnic grievances, increasing migration pressures, and/or indigenous protest movements will occur most frequently in Sub-Saharan Africa, the Caucasus and Central Asia, and parts of south and southeast Asia, Central America and the Andean region.
The United Nations and several regional organizations will continue to be called upon to manage some internal conflicts because major states - stressed by domestic concerns, perceived risk of failure, lack of political will, or tight resources - will wish to minimize their direct involvement. When, however, some Western governments, international and regional organizations, and civil-society groups press for outside military intervention in certain internal conflicts, they will be opposed by such states as China, India, Russia and many developing countries that will tend to view interventions as dangerous precedents challenging state sovereignty.
31. Transnational Terrorism
States with poor governance; ethnic, cultural, or religious tensions; weak economies; and porous borders will be prime breeding grounds for terrorism. In such states, domestic groups will challenge the entrenched government, and transnational networks seeking safehavens.
At the same time, the trend away from state-supported political terrorism and toward more diverse, free-wheeling, transnational networks - enabled by information technology - will continue. Some of the states that actively sponsor terrorism or terrorist groups today may decrease or even cease their support by 2015 as a result of regime changes, rapprochement with neighbors, or the conclusion that terrorism has become counterproductive. But weak states also could drift toward cooperation with terrorists, creating defacto new state supporters.
Between now and 2015 terrorist tactics will become increasingly sophisticated and designed to achieve mass casualties. We expect the trend toward greater lethality in terrorist attacks to continue.
32. Interstate Conflicts
Over the next 15 years, the international system will have to adjust to changing power relationships in key regions:
China's potential. Estimates of China beyond five years are fraught with unknowables. Some projections indicate that Chinese power will rise because of the growth of its economic and military capabilities. Other projections indicate that the array of political, social, and economic pressures will increasingly challenge the stability and legitimacy of the regime. Most assessments today argue that China will seek to avoid conflict in the region to promote stable economic growth and to ensure internal stability. A strong China, others assert, would seek to adjust regional power arrangements to its advantage, risking conflict with neighbors and some powers external to the region. A weak China would increase prospects for criminality, narcotics trafficking, illegal migration, WMD proliferation, and widespread social instability.
Russia's decline. By 2015, Russia will be challenged even more than today to adjust its expectations for world leadership to the dramatically reduced resources it will have to play that role. The quality of Russian governance is an open question as is whether the country will be able to make the transition in a manner that preserves rather than upsets regional stability.
Japan's uncertainty. In the view of many experts, Japan will have difficulty maintaining its current position as the world's third largest economy by 2015. Tokyo has so far not shown a willingness to carry through the painful economic reforms necessary to slow the erosion of its leadership role in Asia. In the absence of an external shock, Japan is similarly unlikely to accelerate changes in security policy.
India's prospects. India will strengthen its role as a regional power, but many uncertainties about the effects of global trends on its society cast doubt on how far India will go. India faces growing extremes between wealth and poverty, a mixed picture on natural resources, and problems with internal governance.
The changing dynamics of state power will combine with other factors to affect the risk of conflict in various regions. Changing military capabilities will be prominent among the factors that determine the risk of war. In South Asia, for example, that risk will remain fairly high over the next 15 years. India and Pakistan are both prone to miscalculation. Both will continue to build up their nuclear and missile forces.
India most likely will expand the size of its nuclear-capable force. Pakistan's nuclear and missile forces also will continue to increase. Islamabad has publicly claimed that the number of nuclear weapons and missiles it deploys will be based on "minimum" deterrence and will be independent of the size of India's arsenal. A noticeable increase in the size of India's arsenal, however, would prompt Pakistan to further increase the size of its own arsenal.
Russia will be unable to maintain conventional forces that are both sizable and modern or to project significant military power with conventional means. The Russian military will increasingly rely on its shrinking strategic and theater nuclear arsenals to deter or, if deterrence fails, to counter large-scale conventional assaults on Russian territory.
Moscow will maintain as many strategic missiles and associated nuclear warheads as it believes it can afford but well short of START I or II limitations. The total Russian force by 2015, including air launched cruise missiles, probably will be below 2,500 warheads.
As Russia struggles with the constraints on its ambitions, it will invest scarce resources in selected and secretive military technology programs, especially WMD, hoping to counter Western conventional and strategic superiority in areas such as ballistic missile defense.
China's People's Liberation Army (PLA) will remain the world's largest military, but the majority of the force will not be fully modernized by 2015. China could close the technological gap with the West in one or more major weapons systems. China's capability for regional military operations is likely to improve significantly by 2015.
China will be exploiting advanced weapons and production technologies acquired from abroad - Russia, Israel, Europe, Japan, and the United States - that will enable it to integrate naval and air capabilities against Taiwan and potential adversaries in the South China Sea.
In the event of a peaceful resolution of the Taiwan issue, some of China's military objectives - such as protecting the sea lanes for Persian Gulf oil - could become more congruent with those of the United States. Nevertheless, as an emerging regional power, China would continue to expand its influence without regard to US interests.
China by 2015 will have deployed tens to several tens of missiles with nuclear warheads targeted against the United States, mostly more survivable land- and sea-based mobile missiles. It also will have hundreds of shorter-range ballistic and cruise missiles for use in regional conflicts. Some of these shorter-range missiles will have nuclear warheads; most will be armed with conventional warheads.
China: How to Think About Its Growing Wealth and Power: China has been riding the crest of a significant wave of economic growth for two decades. Many experts assess that China can maintain a growth rate of 7 percent or more for many years. Such impressive rates provide a foundation for military potential, and some predict that China's rapid economic growth will lead to a significant increase in military capabilities. But the degree to which an even more powerful economy would translate into greater military power is uncertain.
The relationship between economic growth and China's overall power will derive from the priorities of leaders in Beijing - provided the regime remains stable. China's leaders have assessed for some years that comprehensive national power derives both from economic strength and from the military and diplomatic resources that a healthy, large economy makes possible. They apparently agree that, for the foreseeable future, such priorities as agricultural and national infrastructure modernization must take precedence over military development. In the absence of a strong national security challenge, this view is unlikely to change even as new leaders emerge in Beijing. In a stable environment, two leadership transitions will occur in China between now and 2015. The evidence strongly suggests that the new leaders will be even more firmly committed to developing the economy as the foundation of national power and that resources for military capabilities will take a secondary role. Existing priorities and projected defense allocations could enable the PLA to emerge as the most powerful regional military force.
Beyond resource issues, China faces daunting challenges in producing defense systems. Beijing has yet to demonstrate an assured capacity to translate increasingly sophisticated science and technology advances into first-rate military production. To achieve this, China must effect reforms in its State Owned Enterprises (SOEs), develop a capacity for advanced systems integration skills, and recruit and retain technologically sophisticated officers and enlisted personnel.
A decision to alter priorities to emphasize military development would require substantial change in the leadership. Internal instability or a rise in nationalism could produce such change but also probably would result in economic decline.
Japan has a small but modern military force, more able than any other in Asia to integrate large quantities of new weaponry. Japan's future military strength will reflect the state of its economy and the health of its security relationship with the United States. Tokyo will increasingly pursue greater autonomy in security matters and develop security enhancements, such as defense improvements and more active diplomacy, to supplement the US alliance.
A unified Korea with a significant US military presence may become a regional military power. For the next 10 to 15 years, however, knowledgeable observers suggest that the process of unification will consume South Korea'senergies and resources.
Absent unification, North Korea's WMD capabilities 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-2 ICBM, deploy variants, or develop more capable systems. North Korea could have a few to several Taepo Dong-2 type missiles deployed by 2005.
In the Middle East, the confluence of domestic economic pressures and regional rivalries is likely to further the proliferation of weapons of mass destruction and the means to deliver them. By contrast, spending on conventional arms probably will remain stable or decline in most countries. Some governments may maintain large armed forces to absorb otherwise unemployable youths, but such armies will be less well trained and equipped. Rather than conventional war, the region is likely to experience more terrorism, insurgencies, and humanitarian emergencies arising from internal disparities or disputes over ethnic or religious identity.
Iran sees its short- and medium-range missiles as deterrents, as force-multiplying weapons of war, primarily with conventional warheads, and as options for delivering biological, chemical, and eventually nuclear weapons. Iran could test an IRBM or land-attack cruise missile by 2004 and perhaps even an ICBM or space launch vehicle as early as 2001.
Iraq's ability to obtain WMD will be influenced, in part, by the degree to which the UN Security Council can impede development or procurement over the next 15 years. Under some scenarios, Iraq could test an ICBM capable of delivering nuclear-sized payloads to the United States before 2015; foreign assistance would affect the capabilities of the missile and the time it became available. Iraq could also develop a nuclear weapon during this period.
33. Reacting to US Military Superiority
Experts agree that the United States, with its decisive edge in both information and weapons technology, will remain the dominant military power during the next 15 years. Further bolstering the strong position of the United States are its unparalleled economic power, its university system, and its investment in research and development - half of the total spent annually by the advanced industrial world. Many potential adversaries, as reflected in doctrinal writings and statements, see US military concepts, together with technology, as giving the United States the ability to expand its lead in conventional warfighting capabilities.
This perception among present and potential adversaries will continue to generate the pursuit of asymmetric capabilities against US forces and interests abroad as well as the territory of the United States. US opponents - state and such nonstate actors as drug lords, terrorists, and foreign insurgents - will not want to engage the US military on its terms. They will choose instead political and military strategies designed to dissuade the United States from using force, or, if the United States does use force, to exhaust American will, circumvent or minimize US strengths, and exploit perceived US weaknesses. Asymmetric challenges can arise across the spectrum of conflict that will confront US forces in a theater of operations or on US soil.
Central Asia: Regional Hot Spot? The interests of Russia, China, and India - as well as of Iran and Turkey - will intersect in Central Asia; the states of that region will attempt to balance those powers as well as keep the United States and the West engaged to prevent their domination by an outside power. The greatest danger to the region, however, will not be a conflict between states, which is unlikely, but the corrosive impact of communal conflicts and politicial insurgencies, possibly abetted by outside actors and financed at least in part by narcotraffickers.
It is also generally recognized that the United States and other developed countries will continue to possess the political, economic, military, and technological advantages - including through National Missile and Theater Missile Defense systems - to reduce the gains of adversaries from lateral or "side-wise" technological improvements to their capabilities.
Threats to Critical Infrastructure. Some potential adversaries will seek ways to threaten the US homeland. The US national infrastructure - communications, transportation, financial transactions, energy networks - is vulnerable to disruption by physical and electronic attack because of its interdependent nature and by cyber attacks because of their dependence on computer networks. Foreign governments and groups will seek to exploit such vulnerabilities using conventional munitions, information operations, and even WMD. Over time, such attacks increasingly are likely to be delivered by computer networks rather than by conventional munitions, as the affinity for cyber attacks and the skill of US adversaries in employing them evolve. Cyber attacks will provide both state and nonstate adversaries new options for action against the United States beyond mere words but short of physical attack - strategic options that include selection of either nonlethal or lethal damage and the prospect of anonymity.
Information Operations. In addition to threatening the US national infrastructure, adversaries will seek to attack US military capabilities through electronic warfare, psychological operations, denial and deception, and the use of new technologies such as directed energy weapons or electromagnetic pulse weapons. The primary purpose would be to deny US forces information superiority, to prevent US weapons from working, and to undermine US domestic support for US actions. Adversaries also are likely to use cyber attacks to complicate US power projection in an era of decreasing permanent US military presence abroad by seeking to disrupt military networks during deployment operations - when they are most stressed. Many countries have programs to develop such technologies; few have the foresight or capability to fully integrate these various tools into a comprehensive attack. But they could develop such capabilities over the next decade and beyond.
Terrorism. Much of the terrorism noted earlier will be directed at the United States and its overseas interests. Most anti-US terrorism will be based on perceived ethnic, religious or cultural grievances. Terrorist groups will continue to find ways to attack US military and diplomatic facilities abroad. Such attacks are likely to expand increasingly to include US companies and American citizens. Middle East and Southwest Asian-based terrorists are the most likely to threaten the United States.
Weapons of Mass Destruction. WMD programs reflect the motivations and intentions of the governments that produce them and, therefore, can be altered by the change of a regime or by a regime's change of view. Linear projections of WMD are intended to assess what the picture will look like if changes in motivations and intentions do not occur.
Short and medium-range ballistic missiles, particularly if armed with WMD, already pose a significant threat overseas to US interests, military forces, and allies. By 2015, the United States, barring major political changes in these countries, will face ICBM threats from North Korea, probably from Iran, and possibly from Iraq, in addition to long-standing threats from Russia and China.
Weapons development programs, in many cases fueled by foreign assistance, have led to new capabilities - as illustrated by Iran's Shahab-3 launches in 1998 and 2000 and North Korea's Taepo Dong-1 space launch attempt in August 1998. In addition, some countries that have been traditional recipients of missile technologies have become exporters.
Sales of ICBMs or space launch vehicles, which have inherent ICBM capabilities, could further increase the number of countries that will be able to threaten the United States with a missile strike.
The probability that a missile armed with WMD would be used against US forces or interests is higher today than during most of the Cold War and will continue to grow. The emerging missile threats will be mounted by countries possessing considerably fewer missiles with far less accuracy, yield, survivability, reliability, and range-payload capability than the strategic forces of the Soviet Union. North Korea's space launch attempt in 1998 demonstrated that P'yongyang is seeking a long-range missile capability that could be used against US forces and interests abroad and against US territory itself. Moreover, many of the countries developing longer-range missiles assess that the mere threat of their use would complicate US crisis decisionmaking and potentially would deter Washington from pursuing certain objectives.
Other means to deliver WMD against the United States will emerge, some cheaper and more reliable and accurate than early-generation ICBMs. The likelihood of an attack by these means is greater than that of a WMD attack with an ICBM. The goal of the adversary would be to move the weapon within striking distance by using short- and medium-range missiles deployed on surface ships or covert missions using military special operations forces or state intelligence services. Non-missile delivery means, however, do not provide the same prestige, deterrence, and coercive diplomacy associated with ICBMs.
The risks of escalation inherent in direct armed conflict will be magnified by the availability of WMD; consequently, proliferation will tend to spur a reversion to prolonged, lower-level conflict by other means: intimidation, subversion, terrorism, proxies, and guerrilla operations. This trend already is evident between Israel and some of its neighbors and between India and Pakistan. In the event of war, urban fighting will be typical and consequently, civilian casualties will be high relative to those among combatants. Technology will count for less, and large, youthful, and motivated populations for more. Exploitation of communal divisions within an adversary's civil populations will be seen as a key to winning such conflicts - increasing their bitterness and thereby prolonging them.
Chemical and biological threats to the United States will become more widespread; such capabilities are easier to develop, hide, and deploy than nuclear weapons. Some terrorists or insurgents will attempt to use such weapons against US interests - against the United States itself, its forces or facilities overseas, or its allies. Moreover, the United States would be affected by the use of such weapons anywhere in the world because Washington would be called on to help contain the damage and to provide scientific expertise and economic assistance to deal with the effects. Such weapons could be delivered through a variety of means, including missiles, unmanned aerial vehicles, or covertly via land, air, and sea.
Defense-related technologies will advance rapidly over the next 15 years - particularly precision weapons, information systems and communications. The development and integrated application of these technologies will occur mostly in the advanced countries, particularly the United States. Given the high costs and complexity of technical and operational integration, few nations will assign high priority to the indigenous development of such military technology.
Non-US global defense spending has dropped some 50 percent since the late 1980s. "Military modernization accounts," particularly procurement, have been hit hard.
The global arms market has decreased by more than 50 percent during the same period.
Indications are that global defense spending may be recovering from mid-1990s lows; part of East Asia, for example, could experience rises in defense spending over the next decade, but, overall, long-term spending patterns are uncertain.
Over the past decade, a slow but persistent transformation has occurred in the arms procurement strategies of states. Many states are attempting to diversify sources of arms for reasons that vary from fears of arms embargoes, to declining defense budgets, or to a desire to acquire limited numbers of cutting-edge technologies. Their efforts include developing a mix of indigenous production; codeveloping, coproducing, or licensing production; purchasing entire weapon systems; or leasing capabilities. At the same time, many arms-producing states, confronted with declining domestic arms needs but determined to maintain defense industries, are commercializing defense production and aggressively expanding arms exports.
Together, the above factors suggest:
Technology diffusion to those few states with a motivation to arm and the economic resources to do so will accelerate as weapons and militarily relevant technologies are moved rapidly and routinely across national borders in response to increasingly commercial rather than security calculations. For such militarily related technologies as the Global Positioning System, satellite imagery, and communications, technological superiority will be difficult to maintain for very long. In an environment of broad technological diffusion, nonmaterial elements of military power - strategy, doctrine, and training - will increase in importance over the next 15 years in deciding combat outcomes.
Export regimes and sanctions will be difficult to manage and less effective in controlling arms and weapons technology transfers. The resultant proliferation of WMD and long-range delivery systems would be destabilizing and increase the risk of miscalculation and conflict that produces high casualties.
Advantages will go to states that have a strong commercial technology sector and develop effective ways to link these capabilities to their national defense industrial base. States able to optimize private and public sector linkages could achieve significant advancements in weapons systems.
The twin developments outlined above - constrained defense spending worldwide combined with increasing military technological potential - preclude accurate forecasts of which technologies, in what quantity and form, will be incorporated in the military systems of future adversaries. In many cases, the question will not be which technologies provide the greatest military potential but which will receive the political backing and resources to reach the procurement and fielding stage. Moreover, civilian technology development already is driving military technology development in many countries.
Theater-range ballistic and cruise missile proliferation will continue. Most proliferation will involve systems a generation or two behind state of the art, but they will be substantially new capabilities for the states that acquire them. Such missiles will be capable of delivering WMD or conventional payloads inter-regionally against fixed targets. Major air and sea ports, logistics bases and facilities, troop concentrations, and fixed communications nodes increasingly will be at risk.
Land-attack cruise missiles probably will be more accurate than ballistic missiles.
Access to Space. US competitors and adversaries realize the degree to which access to space is critical to US military power, and by 2015 they will have made strides in countering US space dominance. International commercialization of space will give states and nonstate adversaries access rivaling today's major space powers in such areas as high-resolution reconnaissance and weather prediction, global encrypted communications, and precise navigation. When combined, such services will provide adversaries who are aware of US and allied force deployments the capability for precise targeting and global coordination of operations. Moreover, many adversaries will have developed capabilities to degrade US space assets - in particular, with attacks against ground facilities, electronic warfare, and denial and deception. By 2015, several countries will have such counterspace technologies as improved space-object tracking, signal jamming, and directed-energy weapons such as low-power lasers.
Arms Control: An Uncertain Agenda: The last three decades witnessed significant negotiations between the United States and the Soviet Union (and Russia), but the future probably will not replicate those efforts in form or magnitude.
The INF, CFE, and START I treaties and, to a large extent, the CWC were concluded in an effort to reduce tensions during the Cold War. Verification and monitoring in each of these treaties were viewed as essential to their implementation.
Prospects for bilateral arms control between the major powers probably will be dim over the next 15 years; progress in multilateral regimes - with less intrusive and lower-certainty monitoring - probably will grow sporadically. Beyond this generalization:
Efforts will be incremental, focusing mainly on extensions, modifications or adapt |
