Where Will You Be in 2030, America?

Dec. 10 (Bloomberg) -- Uncertainty over how the U.S. will evolve over the next two decades makes its behavior a top “game-changer” of the international order. So say the authors of “Global Trends 2030: Alternative Worlds,” the latest quadrennial future-gazing exercise by the National Intelligence Council.

The difficulty of predicting how a politically polarized U.S. will respond to the stiff domestic tests it faces is just one of six game-changers in this best guess by the intelligence community about the near-term world. These variables are playing out in a world inexorably shaped by four “megatrends”: individual empowerment driven by technology, health-care advances and a growing middle class; the rise of a multipolar order shaped increasingly by networks and coalitions; shifting demographics, including accelerated urbanization; and an intensifying struggle for food, water and energy.

It’s easy to ridicule this sort of big-picture exercise. Why no mention of Venezuela, where a change of leadership could end its growing friendship with Iran and bankrolling of Cuba and other market-unfriendly regimes? Why is the prospect of Korean reunification or a North Korean collapse given short shrift? Why, for that matter, is North Korea, which has detonated two nuclear devices, called a nuclear “aspirant”?

Moreover, the “alternative worlds” that the report uses to sketch out scenarios for the future feel familiar and don’t offer much range -- a sign of prudence, or a lack of imagination?

Complex Challenges

That said, the report usefully brings into focus the complexity of the challenges facing policy makers. For example, two of the report’s most important megatrends are dangerously intertwined: rising urbanization and increased stress on supplies of food, water and energy.

The authors predict that 60 percent of the world’s 8.3 billion people will live in cities in 2030, up from 50 percent today. This will require an immense amount of home and office construction and infrastructure creation, perhaps as much as has been created by mankind in all history.

While urbanization will spur economic growth and the rise of middle classes across the globe, demand for “food, water, and energy will grow by approximately 35, 40, and 50 percent respectively,” the report predicts.

The world can start to plan for these twin demands now. New technologies, such as hydraulic fracturing for natural gas, and alternative energy sources, along with conservation and smarter building techniques, can ameliorate energy shortages. Food and water, ever codependent -- 70 percent of human water use goes to agriculture -- will be trickier, especially if production of crops for biofuels increases.

Developing nations and their donors would do well to concentrate on so-called precision farming and micro-irrigation. Currently, most farming wastes about 60 percent of freshwater involved; underground drip irrigation can reduce waste to less than 10 percent. Less-expensive, traditional smart practices such as zero-till farming are also shamefully underused.

And, sorry agricultural Luddites, the report makes a strong case for increased development and use of genetically modified crops. Countries that compete for the same fresh-water sources - - China, India and Pakistan with the Indus; Egypt and its upriver Nile neighbors -- should firm up water-sharing agreements before the population crunch hits.

One way in which this Global Trends report differs from its predecessors is with its focus on how American foreign policy, and political and societal change within the U.S., will affect global trends. Under every scenario, American pre-eminence gives way to a first-among-equals status.

Losing Influence

China’s and India’s economies are likely to continue to grow at a pace double that of the U.S.’s boom in the first half of the 20th century, and an aging Europe will continue to lose influence. U.S. standing will increasingly rely on soft power and the strength of its open economic and political systems.

Bloomberg View feels that the keys to maintaining this advantage will be more spending on research and technology by the government and corporations, rejuvenating our educational system, and expanding immigration policies for both skilled and unskilled workers.

Indeed, the report presciently holds that global worker mobility will be a huge driver of economic growth, eluding countries with closed-door policies and repressive governments. Countries with freer trade will also come out better, another reason for the U.S. to push forward on the Trans-Pacific Partnership and other trade deals.

Less presciently, the report anticipates a drop in U.S. military spending -- from 4.8 percent of gross domestic product to potentially as little as 1.6 percent to 2.6 percent. This seems unlikely, given the need to counter Chinese military and political sway in Asia and to confront a growing number of small-state and nonstate threats.

Nonetheless, the authors are correct that the U.S. will be less able to afford unilateral military and security action and will be more dependent on international alliances and forging stronger relationships with India and other rising states. Also vital are keeping the dollar in place as the world’s reserve currency and maintaining the role of first responder and balanced arbiter in international crises.

The one thing the world cannot afford, the authors insist, is a U.S. withdrawal from global leadership or its economic collapse. No matter the results of the “fiscal cliff” negotiations, much rides on the U.S. getting its finances into a sustainable position. Increasingly for the U.S., leading the world will require taking care of business at home.

To contact the Bloomberg View editorial board:

    Before it's here, it's on the Bloomberg Terminal.