What the Future Holds Part III: Everything shifts East and South

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The third major shift that is coming in the next several decades is the rise of the rest of the world. For all of our recorded history, the West has dominated the world. Greece and Rome, the Norse and the Celts, the colonial powers, the British Empire, the United States and NATO have all held sway over the world. The West isn’t going anywhere. The United States and Europe will remain powerful but our time of dominance is almost over.

Since 1989, while the West has struggled to maintain rates of economic growth between two and three percent, China has grown at an average rate of almost seven percent. Since 1978, per capita GDP has grown from $155 (US) to more than $7,500, lifting 800 million people out of poverty and building the world’s largest middle class. They have increased life expectancy, greatly expanded education levels and virtually rebuild the country in new infrastructure.

Now, while they continue to fight poverty in their own country, they are also rebuilding their military, leading the world in clean energy development and building a space program that will soon rival NASA. They are also putting their Belt and Road initiative into effect. Even adjusted for inflation, Belt and Road is larger than the Marshall Plan which rebuilt Europe after World War II. When the project is complete there will be more than a trillion dollars worth of new seaports, airports, rail lines and roads connecting Europe, Africa, the Middle East and Asia with all roads ultimately leading to China. It will significantly enhance their economic, diplomatic and military influence.

There are, of course, other countries that are rapidly developing. The most notable of these is India but much of the developing world is experiencing economic growth at rates much higher than that of the US, or Europe.

All of this is going to impact the United States and the West generally in a variety of ways. European and European colonized countries have run the world for several centuries. Although they may no longer colonize lands or enslave people, they have made a regular practice of exploiting the natural resources of the developing world and then selling finished products made from those resources back to them. They have undermined governments, even democratically elected governments, that threatened these practices and propped up dictators who would protect Western financial interests and trade routes. It is those practices that the rise of the East threatens.

Even very poor countries will now have multiple options when selling their resources and goods.  If they do not find favourable terms from the US or Europe, they can look East for a better deal. The United States may have no fear of strong-arming an underdeveloped nation, but they will be less quick to attack an ally or business partner of China or India. Developing nations will also have more choices when it comes to buying finished goods and, if GDP in those countries continues to rise, will soon want to keep more of their resources and make more of their own products.

All of this is likely to mean greater competition for the West, more problems with resource scarcity, larger trade imbalances. fewer foreign students helping to subsidize colleges and universities and greater difficulty in attracting top talent from around the world to Western companies. It could even lead to the reverse, with the best and brightest from Western countries heading east in search of opportunity.

Additionally, it could lead to an end to Western currencies as a safe haven. If Demand for the US Dollar, the Euro and the Pound declines it won’t just mean a devaluation of those currencies, it could also cost more for Western countries to borrow and run deficits.  This, in turn, could lead to an additional decline in global political, diplomatic and even military power.

People, especially on the left, have complained for decades about the negative impact of U.S. and Western influence on the developing world. Soon we will all find out what becomes of the world when that influence declines sharply.

There are other coming changes that are possible and even likely. There are also, as always, changes that will catch everyone off guard but the things that I’ve laid out in the three parts of this post are almost certain and will shape events in every country on the planet in the coming decades. Understanding this has also helped to shape my understanding of the world, my hopes and expectations for the future and my politics and worldview.

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