In the previous post on Global Trends 2030: Alternative Worlds we looked at the hopeful Fusion scenario, the most-plausible best-case scenario presented in the National Intelligence Council’s (NIC) comprehensive analysis. This post will examine a more nuanced scenario, Gini out of the Bottle, which represents yet another way the world may look in 2030. The NIC’s companion report to Global Trends 2030 entitled “Le Menu” provides the Cliff’s Notes description of this third alternative world this way:

Inequalities within countries and between rich and poor countries dominate. The world is increasingly defined by two self-reinforcing cycles – one virtuous leading to greater prosperity, the other vicious leading to poverty and instability. Major powers remain at odds; the potential for conflict rises. An increasing number of states fail. Economic growth continues at moderate pace, but the world is less secure.

For the United States in particular, where memories of Sept. 11, 2001, will persist for an indefinite period, this is a scenario almost as worrisome – and perhaps even more so – than the dark Stalled Engines scenario. The specter of failed states harboring a wide array of radical groups such as Hezbollah, Al Qaeda in the Arabian Peninsula, Hamas, and Islamic Jihad, to name just a few, means for America, as well as for Europe and other western states, that real security will be problematic.

This is especially true after a decade spent in Afghanistan trying to reconstruct a failed state. It goes without saying that from a cost-benefit standpoint it is far less costly, in both blood and treasure,  to keep a state from failing than it is to invade it and then reconstruct it and re-establish stable governance, a civil society, the rule of law and all the other instruments one typically associates with a state that is healthy.

In the Gini out of the Bottle scenario inequalities within countries and between rich and poor countries dominate. The world becomes wealthier – as global GDP grows – but is much less happy and stable as the differences between the haves and have-nots become starker and increasingly immutable. The world is increasingly defined by two self-reinforcing cycles – one virtuous leading to greater prosperity, the other vicious, leading to poverty and instability.

In this Gini out of the Bottle world, the lack of societal cohesion domestically is mirrored at the international level. With Europe weakened and the United States more restrained, international assistance to the most vulnerable populations declines. Major powers remain at odds; the potential for conflict rises. An increasing number of states fail, fueled in part by the lack of much international cooperation on assistance and development.

In this mostly unhappy Gini out of the Bottle scenario, political and social tensions increase. Among countries, there are clear-cut winners and losers. Countries in the eurozone core that are globally competitive do well, while others on the periphery are forced out. The European Union splinters and eventually falters. In the months since Global Trends 2030: Alternative Worlds was published, there is increasing evidence that the European Union is under enormous stress and that the haves and have-nots scenario is already playing out, with differences between nations becoming more stark. Clearly, nations that are “haves” are increasingly trying to insulate their own economies from those of the have-nots.

In the meantime, on this side of the Atlantic, the analysis behind this scenario strongly suggests that the United States will remain the preeminent power, achieving an economic turnaround fueled by its new energy revolution, technological innovation, prudent fiscal policies, and the relative weakness of many potential competitors. Without completely disengaging, however, the United States no longer tries to play “global policeman” on every security threat, choosing to focus instead on important internal issues such as the economy.

In the Gini out of the Bottle scenario, parts of Africa suffer the most. The secessions of Eritrea from Ethiopia and South Sudan from Sudan are seen in retrospect as precursors of this era in which the boundaries across the Sahel are redrawn. In this failed state scenario, states fragment along sectarian, tribal, and ethnic lines. The shale oil and gas revolution that benefits the United States proves disastrous for those African countries dependent upon oil exports. The failed states in Africa and elsewhere serve as safe havens for political and religious extremists, insurgents, and terrorists.

Ominously in this scenario, the transformed global energy market and Saudi Arabia’s failure to diversify its economy hit Riyadh particularly hard. Saudi Arabia’s economy barely grows during this period while its population continues to increase. Saudi per capita income declines from almost $20,000 today to just over $16,000 by 2030. In the face of this economic challenge, the Kingdom no longer possesses the resources to play a major regional role. This is especially worrisome to the United States, which counts on Saudi Arabia as a force of stability in the region, especially as a bulwark against an increasingly belligerent and unpredictable Islamic Republic of Iran.

Elsewhere, cities in China’s coastal zone continue to thrive and sustain double-digit economic growth, but inequalities increase. Social discontent spikes as middle-class expectations are not met except for the very “well-connected.” Fissures appear within China’s leadership as members struggle for wealth, which in turn breeds self-doubt, undermining the legitimacy of the ruling institutions. Given the constant drumbeat of recent press reports where the financial excesses of China’s ruling class – with “princelings” living a lifestyle that is decadent even by Western standards – this “have” and “have-not” fissure, many contend, is already occurring in China. And while this is something that has been happening in China for some time, as “the masses” gain increasing access to the Internet and are increasingly aware of their elites’ lifestyles, the attendant discontent becomes more difficult for China’s Communist Party elite to contain.

The reason why this Gini out of the Bottle scenario and the increasing friction between the haves and have-nots in China is worrisome for the West, and especially for the United States, is clear. As the National Intelligence Council sees this scenario playing out, having an increasingly difficult time governing, China’s Communist Party reverts to stirring nationalistic fervor. This could play out in a plethora of unhelpful ways, from China not only refusing to try to rein in North Korea but actually encouraging and abetting the Hermit Kingdom’s intransigence; to China moving aggressively against Taiwan; to China asserting her claims in the South China Sea, the East China Sea and elsewhere even more aggressively than she does today (with the specter of armed naval conflict with U.S. allies in the region such as the Philippines, Japan and others); to increasing cyber-attacks against the United States and others. Thus, it is easy to see why the United States and other western nations are watching this situation in China carefully.

In this Gini out of the Bottle world, the lack of societal cohesion domestically is mirrored at the international level. With Europe weakened and the United States more restrained, international assistance to the most vulnerable populations declines. Major powers remain at odds; the potential for conflict rises. An increasing number of states fail, fueled in part by the lack of much international cooperation on assistance and development. Economic growth continues at a moderate pace, but the world is less secure owing to political and social fissures at all levels.

It is important to note that the Gini out of the Bottle scenario is not pre-ordained. However, without putting too fine a point on it, as this post has described, and as the paragraph above has pointed out perhaps most clearly, it is in the best long-term interests of the United States and other western powers to invest the resources needed to keep states “on the bubble” from failing. But as noted above, as nations in Europe continue to deal with ailing economies and with the United States dealing with its own financial challenges, there is an understandable tendency to let failing states fend for themselves. This is, clearly, a slippery slope and one that could cause the Gini out of the Bottle scenario to play out with disastrous consequences.

Continue to Part 14: Global Trends 2030: Nonstate World