The world will be a lot better in 2050
People everywhere are expected to be richer, healthier, more innovative and better educated. Or not. We could yet completely mess it up.
Here's the good news: The global financial crisis wracking the world since 2008 seems likely to end in 2013. Growth will rebound. Business will recover and invest once again, and consumption will increase.
We'll be able to breathe a sigh of relief at having survived the worst financial crisis since the Great Depression. We'll tell our grandchildren how we ate at restaurants only once a month, how stock markets nosedived and how we lost our homes. They'll be fascinated when we tell them about the endless lines, if not for soup then for the iPhone 5.
Or so says Goldman Sachs chief economist Jan Hatzius, who predicted this month that the United States will rebound from crisis in 2013. Growth will return to average after five slow years.
Some people think Hatzius is rather too optimistic. This includes Morgan Stanley, which predicts the global economy will remain in a twilight zone of slow growth through 2013, and that things could get worse if policymakers don't take action. If they don't, the global economy could contract 2% under a pessimistic scenario and the U.S. economy could contract for the first three quarters of 2013, Morgan predicts.
Right now, the situation doesn't look great at the moment. The United States is barreling toward the edge of the fiscal cliff and recession looms if Congress doesn't act soon. In Europe, the euro zone is expecting growth of just 0.1% in 2013.
Three years on, the European debt crisis is threatening to swallow the continent's strongest economy, Germany. The chairman of the European Central Bank, Mario Draghi, said this month the crisis will continue through 2013, while the EU's statistics bureau reported that unemployment hit a high of 11.7% in October.
This year was a test for the global economy. It followed four years of crises, unemployment, social unrest and troubling government debt. Leaders were forced to offer solutions. Next year will be the year they'll have to make dramatic decisions. Something will have to change.
These changes - to the global economy, to the balance of power and to our daily lives - will play out over the following years. Much of the change won't be by choice but will be due to demographic, environmental and cultural shifts that have been taking place over decades.
How will the world look in the distant future, in 2025 or even 2050? What do the current trends predict? Will the United States go bankrupt Greece-style? Will China become the global leader and have us all learning Chinese instead of English?
A more equitable world
In 2050, the world will have 9 billion people, but that's not the interesting part. Those 9 billion people will live in a world entirely different from the one we know now. They will be an average of nine years older than the current global average age. Some 75% will live in cities versus 50% now. A full 50% will live in Africa.
We can also expect the world to be more equitable, following the social protests now in their infancy. We can expect inequality to decrease in places where it is now rampant such as the United States and China, and to increase in places where it is now minimal such as poor parts of Africa and Asia that are just starting to develop. The rich will pay higher taxes and women will make up the majority of the workforce - and be fairly represented in politics.
Globalization will continue, to the benefit of Asian countries. The U.S. economy will no longer be No. 1; China will seize that title in 2018 and will account for 20% of global GDP by 2050, up from 14% in 2010. Europe and North America will account for only 20% of the global pie, down from 40% in 2010. Asia will be accountable for half of global GDP.
But China won't be the growth engine it is now - its population is rapidly aging, and annual growth can be expected to sputter down to 2.5%, on par with the current U.S. performance. China will look warily at Africa, the way the United States currently regards China.
Nigeria will be a developed, prosperous nation of 400 million. The Middle East will also prosper, thanks to its young population. In Europe, the balance of power will shift as France outpaces Germany in terms of population.
Meanwhile, India's Tata Group will merge into Microsoft and become the world's largest software company. Google will buy Goldman Sachs and become Google Goldman Sachs, while Harvard, Oxford and Cambridge will merge into a mega-university. As global demography changes, Hollywood and Bollywood will merge.
These are only some of the predictions in "Megachange: The world in 2050," published this year by The Economist. Economist executive editor Daniel Franklin edited the book.
More than looking at the future, the book analyzes our present. When The Economist predicts us living in a super-cloud of social networks, its looking at the current popularity of Facebook. Indeed, the future as predicted by Megachange is essentially 2012 on steroids.
Of course, not everyone agrees with these forecasts. In a report early this year, HSBC predicted that in 2050 it won't be China and India ruling the world but China and the United States - the West is not yet lost, they say. China may surpass the United States to become the world's largest economy but will then start losing momentum; its workforce will peak in 2016 before declining by 100 million people by 2050.
The Americans, however, will maintain their relatively high birthrate, avoiding the demographic collapse awaiting China and Europe, says HSBC. The average American will still be three times as well-off as the average Chinese person in 2050, the U.S. economy will still be more than twice as large as the Indian economy, and the geopolitical map will be different but not as different as The Economist predicts: The United States and China will control all the other economies.
William Buiter, Citigroup's chief economist, says the interesting question is what will happen in the Muslim world. By 2050, Indonesia's GDP will equal that of Germany, France, Italy and Britain combined. The economies of China and India will add up to four times the U.S. GDP, reinstating Asia as global leader, a position it held until the 16th century. Africa will see 7.5% annual growth. The world as a whole will be better off, with the global GDP quadrupling from the current $73 trillion to $378 trillion.
And what about Israel? HSBC forecasts that by 2050, it will be the world's 44th largest economy, up from 52nd today. Its GDP will be $402 billion, up from $237 billion, and GDP per capita will climb from the current $31,500 to $37,731 thanks to massive population growth of 40% to 11 million people.
The U.S. will cease to exist
French economist Jacques Attali, the adviser to President Francois Mitterrand who won fame for predicting the world financial crisis as early as 2006, doesn't see the future as a place you'd want to live in.
In his 2009 book "A Brief History of The Future: A Brave and Controversial Look at the Twenty-First Century," pirates roam the land as well as the sea, committing suicide bombings in European cities. Countries go to war due to a lack of potable water. And a war between Muslim and Christian countries makes World War II look like child's play. All that, he says, is bound to happen before 2025.
The United States will maintain its dominance through 2035, when it will cease to exist, as has happened to every collapsing dynasty. But the United States will not be replaced by another superpower; rather, multinational corporations will be its inheritors. The United States will fall victim to the globalization that it started.
What else? Climate change will accelerate, and rising oceans will force millions out of their homes. The world will suffer from geopolitical instability; pirates will battle corporations, which will battle nations, which will battle religions, which will battle each other. Iran will turn its animosity toward Egypt, Saudi Arabia, Algeria, Tunisia, Morocco and Turkey. China will aim its missiles at the United States. Israel will need to live by the sword to survive. By 2050, a new, technologically enhanced species of humans will have evolved, changing the future of the race. No less.
Even if we survive Attali's grim outlook and make it to 2100, it's not clear things will be better. The world will be out of oil and gas, at least in the quantities needed to power our economies and maintain our current wasteful lifestyles.
As a result, and coupled with global warming, by 2100 half the world will go hungry due to a sharp drop in food production, according to Stanford University. Some 22.3% of the world's population will be over 65, up from 7.6% in 2010. The developed world will be smaller, home to only 13% of the world's population versus 32% in 1950, based on a UN prediction. Africa will be home to 3.6 billion people, up from 1 billion in 2010.
But many of us may die before this happens, according to the UN forecast. By 2100, the population could be as large as 15.8 billion, but it could also drop to 6.2 billion. Who knows?
Another forecast says we all have a future as vegetarians. The Economist's population-growth forecast means severe food shortages, particularly when it comes to meat, predict scientists at the Stockholm International Water Institute.
Also, water shortages will limit food production so there won't be enough food for all 9 billion of the world's inhabitants by 2050. The meat industry currently uses up a massive portion of the world's water resources, takes up 38% of inhabitable land and causes 19% of greenhouse gas emissions. The solution? Go vegetarian now. By 2050, meat will account for less than 5% of global food consumption.
So who knows? Forty years ago, no one predicted the outbreak of HIV and AIDS, the Internet or smartphones. Predictions are based on the past and present, neither of which are particularly effective indicators. If past predictions by authors and scientists had come true, we'd be traveling around in flying cars and vacationing on Mars.
We may well be vegetarians. China may well become a global leader, only to fall victim to its one-child policy. All these forecasts are based on one presumption - that nothing will change to prevent them from coming true. China may cancel its population-control policies, while unforeseen technological advances may enable us to produce unlimited quantities of meat or drinking water.
The only thing we can say for certain is that the world is at the brink of unprecedented change: social, political, demographic and ecological. How significant will this change be and where will it take us?
For all his caution, Franklin writes in Megachange, "There is every chance that the world in 2050 will be richer, healthier, more connected, more sustainable, more productive, more innovative, better educated, with less inequality between rich and poor and between men and women, and with more opportunity for billions of people." Or not. We'll just have to wait and see.