12 Jan: UK MoD CDCD: Global Strategic Trends – Out to 2040

* 12 Jan 2010: UK MoD: Dev, Concepts & Doctrine Ctr (CDCD): Strategic Trends Program: Global Strategic Trends – Out to 2040 [PDF; Copy PDF].

Global Strategic Trends – Out to 2040

UK Minister of Defence: CDCD: Concepts and Doctrine Center: Strategic Trends Program 


Foreword by the Assistant Chief of the Defence Staff (Development, Concepts and Doctrine) – Major General Paul Newton CBE

The DCDC Strategic Trends Programme provides a comprehensive analysis of the future strategic context out to 2040. The work is based on research conducted at DCDC in conjunction with subject matter
experts across a range of disciplines. These experts come from a multitude of backgrounds, including government and academia. It is a global view of future
trends and DCDC has conducted workshops and consultations in Europe, the Middle East, Asia, Africa and North America to gain an international perspective.

The document is a contribution to a growing body of knowledge and is aimed at the defence community. It seeks to build on previous editions of Global Strategic Trends with a more accessible format. It has a greater focus on defence and security issues and expands on other subjects, including resources, and the resurgence of ideology. From a comprehensive review of trends, it draws out 3 key themes: how we will adapt to the reality of a shifting climate and breakneck technological innovation (see the Human Environment); the dominance of the West in international affairs will fade and global power will become more evenly distributed between the West and the rising powers in Asia (see the Dynamics of Global Power); and finally, as society and the distribution of global power changes, the challenges to defence and security will increase (see Evolving Defence and Security Challenges). It draws lessons from contemporary events to conclude that globalisation is a more volatile process than previously envisaged and that this volatility may leave globalised systems more vulnerable to strategic shock and systemic failure. It also draws out high level global defence and security implications.

Previous editions of Global Strategic Trends have been accused of taking a pessimistic view of the future. However, in this edition, we see the opportunities as well as challenges and believe that we provide a realistic assessment. The period out to 2040 will be a time of transition, which is likely to be characterised by instability, both in the relations between states, and in the relations between groups within states. This period of transition will not occur in a linear fashion; as climate change, global inequality, population growth, resource scarcity and the shift of power from west to east will transform the strategic context.

These will be persistent, complex challenges. However, it is the manner in which states, their leaders and their populations react to these challenges that will define the era. If they choose to implement collective responses then the challenges are likely to be overcome, and progress and development will follow. However, if they miscalculate under pressure, are constrained by misunderstanding, or fail to seize opportunities, the result is likely to be instability, tension and ultimately conflict.


Climate Change

Overwhelming evidence indicates that the atmosphere will continue to warm at an
unprecedented rate throughout the 21st century. A scientific consensus holds that a large
part of this warming is attributable to human activities, primarily through increased
concentrations of carbon dioxide and other greenhouse gases. However, there is
uncertainty about the rate and magnitude of change over the next century. For example,
feedback mechanisms, such as melting ice-caps that accelerate global warming as less
light is reflected back to space, may play a significant role. Despite this uncertainty, by
2040, the global temperature is likely to have risen by around 2oC above pre-industrial
levels. This rise is independent of future emissions agreements which will be vital only in
limiting the magnitude of change beyond 2040. These agreements will be highly
politicised, especially given their effect on relationships between the developed and
developing economies.

Climate change will affect the land, the atmosphere and the oceans, and may be an
unstable and unpredictable process, involving both progressive evolution and sudden
instabilities. Major changes are likely to include melting ice-caps, progressive thermal
expansion of the oceans, and increasing acidity of seawater as carbon dioxide transfers
from the atmosphere. These changes will have consequences that vary over time and
geographical extent. For example, some regions will experience desertification, others
will experience permanent inundation, and tundra and permafrost are likely to melt,
releasing methane, possibly in large amounts.13 Land available for habitation is likely to
reduce, and patterns of agriculture are likely to change. Tropical diseases, such as
malaria, are likely to move north and into previously temperate zones. Extreme weather
events will change in frequency and intensity, threatening densely populated littoral, urban
and farming regions with changing growing seasons, flooding and storm damage, and
resulting in increased migration.

Global Inequality

Economic, social and political inequality of opportunity, occurring between both individuals
and groups will continue to fuel perceptions of injustice among those whose expectations
are not met. This will increase tension and instability, both within and between societies
and result in expressions of unrest such as disorder, violence, criminality, terrorism and
insurgency. While material conditions for most people are likely to improve over the next
30 years, the gap between rich and poor is likely to increase. Absolute poverty will remain
a global challenge. Significant per capita disparities will exist within most countries and
across some regions. In some areas of sub-Saharan Africa, previous falls in poverty may
be reversed. Differentials in material well-being will be more explicit, highlighted by
increased access to more readily and cheaply available telecommunications. Associated
grievances and resentments are likely to increase despite growing numbers of people
being materially more prosperous than their parents and grandparents. Inequality may
also lead to the resurgence of not only anti-capitalist ideologies, possibly linked to
religious, anarchist or nihilist movements, but also to populism and even Marxism.
Conversely, it may also lead to demand for greater access to the benefits of globalisation
and greater connectivity for the least developed states.

Key Theme – The Human Environment

People are, and will remain, the most important driver of change, underpinning societal,
geopolitical and security developments. This section seeks to investigate trends in society
by considering how challenges in the physical domain, combined with societal change and
technological advances, will shape the human environment. Robust demographic growth,
resource scarcity and the need to address climate change will require innovative
technological and organisational solutions that have a profound effect on society. These
demographic, physical and economic drivers will be interlinked and intense, shaping
behaviour, development and the need for adaptation out to 2040.

The Human Environment Key Theme considers:
• The Physical Environment.
• Changes in Society.
• The Technological Challenge.

The hot topics are Radicalisation and Global Health.

The Physical Environment

The global population is likely to grow from 6.9 billion in 2010 to 8.8 billion by 2040 with
many enjoying increasing prosperity accompanied by burgeoning material
expectations.14,15 Rapid population growth is a continuation of a trend stretching back to
the last century that is likely to continue, before possibly moderating late in the 21st
century as economic development leads to a progressive decline in global fertility rates.16
Population driven resource demand is therefore likely to increase in intensity out to 2040
before gradually subsiding in the late 21st century as technological and organisational
innovations take effect, and the rate of population growth declines. The most acute
stresses are likely to arise from competition for energy, food and freshwater, as well as
access to the ‘global commons’.17

Fig 2: Projection of Global Population from 1700 to 2048

Global energy, food and water supplies are likely to be sufficient for the increased global
population. However, geographic distribution, access, cost and transportation will be
critical issues. The inability of some regions and segments of society to meet the costs
involved in accessing resources makes local and regional scarcity likely, stunting
economic and societal development and leading to poverty, instability and conflict. For
example Mexico city has already experienced conflict over access to water supplies.18
Despite this, growing numbers of people are likely to enjoy increasing affluence as
consumption and global Gross Domestic Product (GDP) per capita rise. Such economic
growth is likely to lead to a continued reduction in absolute poverty; however, rapid
population growth may contribute to increased levels in the least developed regions.19
Economic development is likely to be directly linked to greater resource consumption.

However, an increased number of cars, the change to protein-rich diets, and increasing
personal water usage will be partially offset by the emergence of renewable and
unconventional energy sources, increasing crop yields and innovative solutions, such as
conservation measures.20 Producer and consumer economies will seek political and
economic partnerships to guarantee supply, some of which will require moral
compromises to be made. Scrambles for energy, minerals and fertile land are likely to
occur with increasing intensity. These scrambles may not always be motivated by
immediate shortage, as many states compete for access to long-term supplies and develop extensive strategic reserves. The combined effects of climate change and
increased demand for food production are likely to alter the productivity and distribution of
the world’s ‘bread-basket’ regions and accelerate soil degradation in previously fertile
areas. The inequality between areas that either possess an abundance of natural
resources, or can afford access to them, and those that cannot is likely to be a source of
grievance, providing an ethical challenge to the global market-based economic system.

By 2040 climate change, and associated measures designed to limit greenhouse gas
emissions, will have a significant effect on the development of societal norms, the cost
and usage of energy, land use, and economic development strategies. A new, higher
temperature global climate will be a reality and many measures to limit further long-term
temperature increases are likely to have been implemented. The measures are likely to
be agreed multilaterally after a period of discord regarding the associated economic and
financial burden of how individual states and regions bear the costs. These
disagreements, based on differing narratives for apportioning responsibility for climate
change, are likely to be particularly intense between developed and developing
economies.21 This is likely to place greater emphasis on sustaining rather than
maximising economic growth, particularly in the West. Options for enhancing
sustainability include technological solutions, such as carbon capture and storage22 that
are likely to allow widespread usage of fossil fuels to continue. Material expectations will
be tempered by greater environmental awareness. These developments will mitigate, and
may counteract, a number of the long-term de-stabilising impacts of climate change, but
considerable uncertainty surrounds the rapidity with which such solutions can emerge,
and adaptation is unlikely to be smooth or wholly successful.

Climate change, and the progressive impact of gradual temperature increases, will
exacerbate resource scarcity by altering regional precipitation patterns, affecting
agricultural production capacity, and worsening existing problems of resource distribution
and access. Climate change will also cause some previously infertile land regions to
become fertile. However, such regions are likely to lack the necessary farming
infrastructures and it will take considerable time and effort to establish them. These
changes in the pattern of agriculture are likely to impact on food security. Environmental
changes are also likely to lead to significant increases in environmentally-induced
migration. Such migrants are likely to move locally, and then regionally, with a relatively
small proportion of them moving internationally. However, much of the migration will be
uncontrolled and generate significant social and economic impacts wherever it occurs.
States and cities that are unable to cope are likely to seek international humanitarian
assistance of unprecedented scale and duration.

Changes in Society

Out to 2040, the demographic profiles of societies will change. The developing world will
account for the majority of population growth and represent 7.6 billion people, or around
85% of the global total.23 Many of these people will enjoy improved economic status and
heightened material expectations. This economic development, along with widespread
availability of birth-control measures, increasing life expectancy and continued
urbanisation, is likely to temper birth rates in some regions. However, limited economic
development and cultural norms will persist, sustaining high fertility rates in other regions
such as sub-Saharan Africa, parts of the Middle East and Asia, and specifically in
countries such as Afghanistan, Syria, Yemen and Pakistan.24 In contrast, Europe, Japan
and eventually China and Latin America are likely to face the problems of an ageing and
declining population. Russia, in particular, is likely to experience a population collapse
from over 140 million in 2009 down to 122 million by 2040, posing significant social,
security and economic problems, particularly as the decline is most acute amongst ethnic
Russians rather than minority groups.25 However, the long-term decline in fertility rates
experienced by the most developed states is eventually likely to be halted, or even
reversed, as societal norms change.26

Climate change will amplify existing social, political and resource stresses. It is likely to
be an indirect factor that sets the conditions for conflict, rather than directly causing it.
The effects of climate change are likely to dominate the global political agenda, especially
in the developed world where it will represent an increasingly important single issue. The
developed world is likely to experience a degree of transformation as it moves from a
consumerist society based on freedom of choice to a more constrained, sustainable
societal model that provides financial and social rewards to encourage greener practices
and discourage waste. This will represent a shift in international norms as the developed
world looks to achieve sustainability, while the developing world continues to concentrate
on building the infrastructure required to maximise economic growth. Despite this, the
developing world is likely to represent an important engine of innovation where new,
cheap, environmentally sustainable technologies are trialled without opposition from
industrial interests that defend inefficient, legacy systems. The developing world is
unlikely to be constrained by the stringent legal controls applied to the developed world.
In certain research areas, such as cloning and clinical trials, this may lead to technological
advances that may be deemed unethical in the West.

Fig 3: Global Population Growth and Age Demograhic by Region 2010 – 2040

Broader and deeper social interaction, facilitated by globalisation, sustained international
migration, and ubiquitous global ICT connections may drive the development of a global
culture, although the characteristics this culture takes are difficult to anticipate. Social
trends are likely to reinforce this, with some religious movements, such as
Pentecostalism, becoming increasingly globalised in outlook and character. Furthermore,
individuals and small businesses are likely to become increasingly connected to worldwide
markets. The complex international relationships that result are likely to lead to an
increased familiarity with other cultures. Knowledge of overseas events is likely to
become constant and real-time, providing the opportunity for violent responses to be
orchestrated through communications networks that may be untraceable and poorly
understood by the traditional security apparatus. The social tensions caused by intrusive
global culture are likely to be most acute amongst those who seek to maintain their
indigenous and traditional customs and beliefs, and feel threatened by changes. This is
likely to lead to an increasing number of individuals and groups, many of whom form
around single issues that differentiate them from wider society, becoming marginalised
and possibly radicalised.

The presence of transnational diaspora, with close ties to their home countries, will often cause events in the migrants’ state of origin to become political issues in the host state. Protest action in response to global or transnational issues may be conducted on an expanding scale with, for example, local events in Bangladesh leading to protests by ethnic Bangladeshis in London. These protests may include demands for intervention to address problems in the state of origin or, alternatively, lead to transnational intercommunal violence conducted between different ethnic communities in the host country.  Often, the host state government may be perceived as a source of grievance due to ideological or cultural differences. When such conditions exist, particularly when exacerbated by high levels of marginalisation and social exclusion, sections of the populace will develop grievances that may lead to extremism. Examples include the 7/7 attacks in 2005 on the London transport network where terrorism was justified through reference to historical injustices, repression, and violence against Islam.27 Technology will facilitate the organisation of protests and high impact terrorist attacks that occur rapidly, and without fore-warning, and seek to achieve symbolic effects that create the greatest media impact. The 2004 Madrid train bombings in the run-up to the Spanish national elections demonstrate the ability of trans-national terrorism to achieve political effect.

Regions of alternatively governed space will continue to exist in both rural and urban
environments where instruments of legitimate national governance do not operate
effectively and power resides locally with tribal groups, warlords or criminal gangs.
Diaspora communities in developed states may form similar enclaves.28 Instability, crime
and terrorism are likely to radiate from such centres making their containment or
stabilisation an ongoing international problem. Regions that suffer the highest levels of
inequality and poverty are also likely to experience increased risk of humanitarian
catastrophes caused by an amalgam of climate change, resource pressures, the effect of
disease, and population growth. Clear moral cases that invite humanitarian intervention
will persist.

Within the global system an innate cultural divide is likely to remain between societies that
are principally individualistic in outlook and those that foster strong collective identities.
Both types of society will be challenged and undergo change. For example, collectivist
societies are likely to face calls for more democracy, freer markets, freedom of speech
and belief, and individual legal rights. However, individualistic societies are likely to
experience tensions as their constituents increasingly question the role and authority of
the state and wrestle with the balance between the needs of the many and the rights of
the individual. For example, China is likely to continue to foster a strong collective identity
based on nationalism. However, the manner in which the Chinese state resolves the
inevitable tensions associated with the rise of individualism, along with divided allegiances
as open religious affiliation becomes more widespread, may come to define its future

Religious affiliation will remain a collective identity that transcends national boundaries.
Many religions will have transnational presence and institutions such as the Roman
Catholic Church will remain influential and Islam as a faith will continue through the
‘umma’29 to unify individuals across borders. In a number of religious contexts, including
Judaism, Sikhism and Islam, religious identity is likely to remain more significant than
national identity. Because of increasing global connectivity diaspora communities are
more likely to react to events impacting on their religious or cultural identity. Single
issues, such as women’s rights, or the desire to practise different languages or cultures,
will form barriers to integration, generating further tensions and possibly conflict.
However, although these differences may result in tension between different societies, they are unlikely to result in a ‘Clash of Civilisations’.30 Moreover, external influences and
extended exposure to liberal cultures is likely to soften support for violent extremism and
gradually decrease the impact of ideologically-driven terrorism.

As the globalised economy becomes increasingly dependent on knowledge-based
industries, creativity and innovation, the importance of advanced education will increase.
However, global access to education will remain variable, although ICT based initiatives
are likely to improve basic skills in numeracy and literacy. Those who do become better
educated may suffer frustration if they continue to experience inequality of opportunity
based on their physical location, culture or language. The increasing role that ICT will
play in future society is likely to lead to the vast majority of individuals developing the skills
required to use and operate such technology. However the proportion of the population
with the harder skills required to understand the fundamental principles of how such
technology works is likely to decline.31

The state will remain the pre-eminent actor in international relations and many individual
states will be dominated by elite groups that emerge from distinct socio-economic,
educational, tribal and ethnic groups. However, the emergence of a global elite, a
powerful network of individuals and institutions that sits above the level of individual states
and influences the global agenda, is also possible. Elites provide an indication as to how
different regions may see the world and to what strategies they afford the greatest priority.
The Western world is likely to remain dominated by personality politics with charismatic
leaders engaging their publics on emotional and personal issues based on morality and
values. In East Asia, a more technologically focused leadership will seek stability,
economic growth and the collective good, affording less significance to social issues and
individual rights. In the developing world, traditional forms of organisation are likely to
remain significant even if states transform their governance structures according to
democratic principles. Transformation, especially if it is driven by globalisation, is likely to
generate tensions within traditional systems and may spill over into conflict between
groups, as was illustrated by violence following the 2007 Kenyan elections.32 Countries
that sustain both caste and class systems may also experience internal tensions or
instability as hierarchical systems become subject to stress.


Globalisation and Instability

Globalisation is likely to continue.47 It is both an idea and a process linked to transactions
of capital, goods, services, people, intellectual property, information and resources that
are conducted via physical and virtual networks. Its influence is likely to be pervasive,
with the economic success of states dependent on access to, and exploitation of,
opportunities within the globalised economy. However, many individuals and some
political elites will regard globalisation as threatening to their interests and to social
stability, resulting in periodic local arrangements that protect sensitive industries and
sectors of societies. While globalisation is inevitable over very long time periods, it can be
temporarily slowed, halted or even reversed as demonstrated by the events of the Great
Depression (see the Economic Dimension). Out to 2040, widespread economic
protectionist measures are possible in response to geopolitical insecurity or macroeconomic
instability. If implemented they would lead to a decrease in interdependence,
an increase in inter-state and inter-bloc rivalries, and the fostering of confrontational rather
than cooperative approaches, with significant defence and security implications.

Despite strong transnational trends, the state will remain the building block of the
international system, providing security and economic opportunity for citizens. However,
globalisation is likely to have a Darwinian ‘survival of the fittest’ effect on poor governance
by dissuading international investment and providing incentives for governments to
improve practice in order to meet accepted norms. Contemporary, rising, and emerging
powers are likely to use their influence to promote and protect the globalised system on
which their prosperity depends. In extremis, this may include using military force.

Security of global supply chains, and access to the ‘global commons’ and global markets
will be a priority for virtually all states. Effective governance, regulation, operation and
control of the networks that underpin economic activity will be an ever-present concern.
These networks, in the maritime, land, air, cyberspace or space domains, traverse
vulnerable chokepoints and are dependent on functioning nodes to link major centres of
trade, finance, intellectual endeavour, energy production, and industrial production and
consumption. The infrastructure underpinning these networks is likely to evolve as the
global economy develops and new technologies are introduced. Inherent network
resilience and redundancy is likely to be difficult to assess. However, they are likely to be
vulnerable to infrequent external shocks that cause systemic disruption, although the form
and severity this disruption takes is difficult to anticipate. Examples could include the
following vulnerabilities: the impact of geopolitical instability on maritime choke-points; the
disruption of energy production; distribution and refining capabilities due to regional
conflicts and natural hazards; and the intensifying dependence of developed economies
on cyberspace.

Regions that exhibit the most intense economic and financial global linkages, underpinned
by the necessary network infrastructure, represent a globalised core, the geographical
boundaries of which are illustrated in Figure 4. This graphic also illustrates important
suppliers of energy and strategic minerals, and states at risk of instability. Given that prosperity in the developed world is associated with globalisation, instability within the
globalised core is likely to directly affect the interests of the developed world. Moreover,
the Middle East and the Asian Meridian (see Hot Topic – The Asian Meridian) are regions
where the globalised core, resource exporters and states at risk of instability are
juxtaposed. Greater instability, with severe consequences to the international system is
likely, making these regions particularly relevant out to 2040. In addition, the borders of
the globalised core do not follow state borders. For example, the centres of industrial
production and commerce in China’s littoral regions are intimately linked into globalised
networks, but the relationship of China’s rural hinterland is different. Here, the
predominant connection is the flow of remittances from migrant workers attracted to the
rapidly-expanding conurbations by economic opportunity. Splits, such as these within a
state, have always been present, but are likely to be remain a source of domestic social
tension made more acute by the inequality generated between the economic ‘haves’ and
‘have-nots’. The effects of such inequalities are context specific, but they will often be a
cause of instability, threatening the cohesion of some states.

The number of internationally recognised states, as defined by membership of the UN,
has grown rapidly. In 1950, the UN had 60 members but this had risen to 192 by 2009, an
addition of around 2 states per year. Many new states were recognised following the
independence of former European colonies and the collapse of the Soviet Union.
However, others were created by violent, enduring separatist movements that fragmented
previously viable states, for example in Yugoslavia. Out to 2040, state fragmentation is
likely to continue, although the rate at which new states are recognised will slow. Some
cities may also seek to secede from states and look for greater recognition as
independent entities. Most new states are likely to be small both geographically and
demographically and will seek alliances and protection to safeguard their independence
and territorial integrity. For example, Slovenia gained independence in 1991, UN
membership in 1992 and EU and NATO membership in 2004. De facto states that lack
full international recognition, such as Kosovo, highlight some of the problems facing
would-be states.48 Not only does she have a history of conflict, but she is land-locked,
has a large ethnic minority with close ties to Serbia, problems with governance and
competing interests between the EU, the US and Russia who are all engaged in the

Fig 4: Global Infrastructure and Resources Map

Interdependence and Competition

A defining feature of the next 30 years will be the constant tension between greater
interdependence and intensifying competition between individuals, communities and
states. This feature will stimulate competing strategies based around the extent to which
these groupings will wish to exploit, or resist, change. Difficulty in meeting global
resource demand is likely to become an enduring feature, resulting in states gradually
drifting towards seeking individual rather than multilateral solutions. For example, despite
the benefits of globalisation, bilateral agreements between resource suppliers and major
consumers are likely to become increasingly common, threatening to fragment global
markets. Similarly, despite economic interdependence and global challenges, such as
climate change, that require cooperative solutions; the use of power is increasingly likely
to focus on self-interest rather than the common good.

Global consumer demand, especially in China and India, heightened by increasing
material expectations, will continue to feed through to economic activity and the demand
for resources. States, rather than Multinational Corporations (MNCs) and markets, are
likely to become a stronger force in shaping responses to resource scarcity and the
energy market is likely to be increasingly dominated by state-controlled corporations.
This increase in state influence may cause uncertainty as to intent and result in volatility,
especially in energy markets. Offshore production of food and other agricultural produce,
highlighted by state-sponsored land purchases in fertile agricultural regions, is likely to
continue. This utilisation of developing states by wealthier states for resource extraction
is likely to have a degree of mutual benefit. However, in regions that are prone to
instability, it is likely to become a source of grievance and possibly conflict, especially
where it is perceived to be detrimental to the indigenous population.49


Wider Middle East

Large segments of Muslim majority countries in the wider Middle East are likely to resist
social change and strive to retain their traditions and culture. This struggle, stoked by
historical grievances, is likely to cause social and political tensions out to 2040.
Concurrently, modernising factions will try to change Islamic society from within, seeking a
model that allows traditionalism and modernity to co-exist. This competition between
modernity and traditionalism is likely to cause widespread instability in the region. Radical
movements (see Hot Topic Radicalisation) will continue to emerge, and national and
transnational extremist groups are likely to continue using terrorism as a tactic to achieve
their objectives. However, a global caliphate is unlikely, although some extremist groups
are likely to harbour aspirations to establish their interpretation of Islamic rule in failed
states. Change, including greater empowerment of women and a transformation in the
system of education, is possible. These changes may ultimately lead to rapid
development of Islamic societies, including improved governance arrangements and a
more liberalised political and social model.

The Arabian Peninsula and the wider Gulf Region will remain at risk of instability and state
weakness. Saudi Arabia is likely to retain her strategic importance as the world’s largest oil producer, increasing her share of world production;84 and by 2040 she will experience a
population explosion of over 50%.85 Over the same period, Yemen is likely to see over
90% population growth.86 Consequently, a ‘youth bulge’ will be created in Yemeni society,
and this is likely to be mirrored throughout the Middle East. While these economies and
societies are adjusting to their youth bulges, there are likely to be high numbers of
unemployed youths who seek social and economic advancement through extra-legal
means. Such action may be a cause of instability within these countries, which leads to
conflict.87 For example, between 1970 and 1999, 80% of civil conflicts occurred in
countries where 60% or more of the population were under the age of 30 and Yemen is
likely to remain in this category.88 The collapse of such states is possible, especially if
economic and political reform does not match the expectations of the population. Such
instability may provide opportunities for ideological extremists, destabilising not only the
Arabian Peninsula, but also the Horn of Africa and the global supply routes through the
Red Sea and the Strait of Hormuz. Iraq’s fortunes may rebound restoring her position as
a regional force, although her neighbours are likely to seek to moderate any rise. The
smaller Gulf States may achieve successful niche positions in finance and trade and
solidify their place in the globalised core. However, they will remain extremely vulnerable
to regional instability with wider implications for the interests of other states. For example,
many of the Gulf States have large diaspora populations, especially from South Asia, who
provide remittance income back to their states of origin. In addition, if instability in the
Gulf states forced a requirement to evacuate foreign nationals, such an operation would
be on an unprecedented scale, with Dubai alone hosting one million foreign workers of
whom around 500,000 are of Indian descent, and around 30,000 originate from the
West.89 The Gulf States are likely to retain their relationships with the US and the West,
although they will seek to maximise their interests with other powers, especially as the
influence of China, India and Iran grows.


Hot Topic – The Asian Meridian

The Asian Meridian is likely to be an economically successful region that sits at the
intersection of the Chinese and Indian spheres of influence and is likely to be a region of
geostrategic competition. It is the region from Hong Kong in the North, through South
East Asia into Australia. It has a diverse population with large Indian and Chinese
diasporas and historic links to the US and Europe, in addition to treaty arrangements such
as the Five Powers Defence Agreement.92 The region sits astride the global trade routes
of the Malacca and Lombok Straits through which 20% of global oil production is
transported, including 80% of China’s oil imports. Over 60% of global shipping travelling
through these choke-points is destined for Chinese ports. 93 Similarly, Japan imports over
80% of her energy needs along these routes. The importance of these choke-points is
likely to grow out to 2040 placing the region at the intersection of probable Indian, US and
Chinese spheres of influence. Moreover, Australia and Indonesia together account for
almost half the world’s coal exports and Australia in particular is a large mineral

Fig 6: Map showing the Asian Meridien which stretches from Hong Kong to Darwin

The region encompasses several states and other city states, such as Hong Kong and
Singapore that are major centres of economic and financial activity. In particular, Vietnam
has a large population and is likely to continue her economic development as an important
manufacturing base, becoming increasingly influential within the ASEAN region.95
Australia, a partner and ally to the US, is also an Asian power in her own right and a
centre of innovation, resource production and stability. She is likely to act as a bridge
between the contemporary and rising powers and become increasingly influential.

China sources 80% of her oil imports through the Malacca and Lombok Straits

Islamic influences will be strong in the Asian Meridian, especially in Indonesia, Malaysia
and Brunei, and amongst segments of the population in Thailand and the Philippines.
Indonesia, the world’s most populous Muslim majority country,96 may experience robust
economic development. However, internal problems between differing religious and
ethnic groups and the disproportionate effects of climate change in the region are likely to
inhibit economic and political development. Irregular activity and terrorism in support of
separatism are likely and state fragmentation is possible, affecting energy exports and
leading to insecurity and subsequent growth in maritime piracy, disrupting global trade.97
Any disruption is likely to elicit a multinational response with China playing a significant

Competition for regional influence is likely to be significant, exacerbating instability and
possible disputes over resources and sovereignty (see Hot Topic – Frontier Disputes).
ASEAN is likely to develop its economic interconnectivity between member states but it is
unlikely to emulate the EU as a supranational power in its own right. The growth in
defence spending along the Meridian will continue with investment in maritime and air
capabilities being substantially increased. While these forces are primarily for defensive
purposes, including countering piracy in the Indonesian and Philippine archipelagos, many
states in the region will be looking to use them to reinforce claims of sovereignty, both
along their borders, in the international straits and to further their claims in the contested
Exclusive Economic Zone (EEZ) areas, such as around the Spratly Islands in the South
China Sea.

Fig 8: Current and Future Regions of Multiple Stress

The top map plots current estimates of demographic growth, water and food shortage,
and crop decline. The shaded area represents regions where 2 or more stresses overlap.
A representation of current conflict is then overlaid and, although direct cause and effect is
not implied, there is a degree of correlation.99 The map below takes forecasts of the
same variables out to 2040 and shows that the multiple stress zones are likely to extend
into Central and East Asia. This will result in challenges for states in these regions and
may increase the likelihood of conflict. The area shaded in yellow represents the further
expansion of multiple stress zones to include densely populated regions at risk from
climate-induced coastal inundation.


Out to 2040, the incidence of armed conflict is unlikely to resume its downward trend and is likely to increase, driven by a number of factors. First, the uni-polar US-dominated world order has already started to develop a more multi-polar distribution of power, and this evolution will continue. Such a change can have positive effects, by forcing states to find multilateral solutions to common problems. However, it also leads to instability in the international system and is likely to offer the opportunity for suppressed state rivalries to re-emerge, increasing the potential for competition and confrontation between regional powers. Similarly, some of the conflicts frozen since the end of the Cold War may thaw quickly.110 Second, global inequality is likely to remain widespread and will be made more explicit as access to globalised media increases. This access will heighten inequality associated grievances, by making them more apparent to those who lack, or are denied, opportunity. Third, population increases, resource scarcity and the adverse effects of climate change, are likely to combine, increasing the likelihood of instability and of disagreement between states, and providing the triggers that can ignite conflict. Finally, since 1990, the absence of a clear ideological divide, such as existed between the West and the Soviet bloc, has contributed to the decline in conflict. Out to 2040, political and religious ideologies that espouse populist or belligerent narratives are likely to grow in importance (see Hot Topic – The Resurgence of Ideology). All of these factors will be exacerbated by periods of global economic recession. Other factors are likely to mitigate some of the risks. For example, inclusive and effective global governance institutions and economic interdependence are likely to have a stabilising effect. However, on balance, these factors are unlikely to further reduce the incidence of conflict.

Fig 9: Global Trends in Armed Conflict


Hot Topic – The Importance of Influence

Military operations will focus on influencing people. Despite the unifying effect of
globalisation, people from dissimilar cultures will continue to act and think differently,
depending on their personal and group context. Hence, knowledge and understanding
will be required of how people from different cultures think; what symbols, themes,
messages, etiquette and practices are important; how systems of reciprocity or kinship
function, and how these establish deep allegiances and social obligations. Relevant
groups will include domestic audiences, key regional leaders and populations, coalition
partners, diaspora communities and broader international opinion.

In conflict and confrontation, most actors will place considerable emphasis and
dependence on the psychological rather than just the physical. All military activity,
including force, will continue to be designed to influence, and is likely to be planned and
executed in support of a campaign narrative. Technology will enable the development of
extensive social networks that in turn will multiply opportunities for those seeking to
achieve influence through the distribution of recorded images. This imagery, combined
with simple, fluid narratives, can shape both local and global perceptions. Individuals,
groups and states will be subject to influence from sensational acts of terrorism, such as mass casualty events or executions, conducted to influence populations. Terror attacks
are likely to demoralise and encourage, intimidate and motivate with messages highly
tuned to specific target audiences in order to alter opinions.

Knowledge will empower and enable, even when the physical contest cannot be won.
Information and intelligence gathering systems will be required to provide knowledge
about people’s perceptions, beliefs and opinions, and how they can be influenced.
Influence will be attained when the behaviour of the target audience changes through the
coordination of all levers of power including military action, words and images. Influence
will not just be about messages or media, but how the combination of word and deed are
portrayed, interpreted and understood through the lens of culture, history, religion and
tradition. Speed of response is likely to be vital and first impressions will count. Notions
such as winning and victory are likely to be of little relevance if an adversary can remain
credible in the battle space of ideas.


Evolving Legal Norms and Legitimacy

Future conflict will continue to be characterised by disputed interpretations of legitimacy.
Western norms for conflict based around notions of jus ad bellum and jus in bello,123 and
the widely accepted Hague and Geneva Conventions, are likely to be challenged by
alternative paradigms for the conduct of conflict. Furthermore, the application of domestic
law and international human rights obligations may result in unanticipated restrictions. In
general, affluent and well-integrated states are likely to promote international legal norms, while poor and weakly-integrated states and non-state actors are likely to be guided by different norms that develop from their individual circumstances.

While the majority of states will continue to legitimise their actions under existing  international law, constraining international legal arrangements may become such an impediment to the achievement of strategic objectives that they are bypassed or ignored; competition for resources, for example, may exacerbate unconventional interpretations of international law.


Strategic Shocks

The strategic context in 2040 is not shaped just by trends and drivers. On occasion,
single events can provide discontinuities that cut across existing trends and re-shape the
strategic environment. Such an event is a strategic shock. Historic examples of these
high-impact low probability events include:

• The 2007-8 financial crisis.
• The 9/11 terrorist attacks.
• The collapse of the Berlin Wall.

Strategic shocks have a cascade effect, leading to multiple, apparently unconnected and
unforeseen changes. They transform the strategic context, changing behaviour and
activity across the board. For example, the 2007 financial crisis began with US sub-prime
debt. Failures in this relatively obscure area were magnified by a number of factors
including high-levels of interconnectedness, a lack of confidence, and the complexity of
the global financial system. The cascade effect brought the entire global financial system
close to collapse. This in turn led to a transformed strategic context that had economic,
geopolitical and social effects as the shock waves travelled outwards. The medium to
long term effects of this crisis are uncertain, however, the implications of this strategic
shock may yet be significant, or even catastrophic.

Other complex, interconnected global systems may also be at risk of systemic failure.
This includes globalisation itself, which can be thought of as an amalgam of multiple
complex sub-systems spanning the social, economic, financial and geopolitical domains.
These systems are typically difficult to understand, and are subject to no overall control
and variable standards of regulation. Moreover, their resilience is difficult to assess and
measure, and confidence in the integrity of the system is often fundamental to its effective
functioning. Examples include: the global system for trade and the supply lines and
infrastructure that underpin it; energy and food supplies; and the global communications
system, with its dependence on space-based utilities. Out to 2040, global
interdependence and reliance on complex systems is likely to continue to increase. This
provides many benefits, but may make future strategic shocks and the systemic failures
more frequent and pervasive than in the past.


Social Dimension


Developments in the Social Dimension will be dominated by 3 processes: rapid
demographic change; sustained urbanisation; and the impact of globalisation on culture,
identity and belief. This section considers the changing nature of social relationships and
the place of the individual within society.

Changing Demographics. The global population is likely to grow from 6.9 billion in 2010 to
8.8 billion by 2040.140 The developing world will account for most of the growth, remaining
relatively youthful, in contrast to the developed world and China, which will experience
little population growth and undergo significant increases in median age (see Figure 3).
As well as differences in median age, some regions are likely to experience skewed sex
ratios. For example, in China, as a consequence of the one-child policy and a cultural
preference for boys, many regions have shown greater proportions of male births. The
nationwide sex ratio rose from 108 male births to 100 female, to 124 in the 2000-2004
period,141 and in China’s under-20 age group there are almost 33 million more males than
females. A similar trend is occurring in India, but is less marked.142 In the West, ageing is
likely to lead to policies to employ the ‘younger old’ who previously enjoyed longer
retirement periods. This cultural shift may yield a second demographic dividend leading to
a lower demand for migrant workers and decreasing the social welfare burden.


Risks and Benefits

Inability to Cope with Population Growth. Population growth will exacerbate existing
economic, environmental and governance challenges. The most rapid population growth
is likely to occur in regions that already face the greatest economic, social and political
risks. For example, the population of sub-Saharan Africa is likely to almost double by
2040.143 If the proportion suffering malnutrition stays constant, then almost 500 million
people are likely to require periodic humanitarian assistance.

Demographic Dividend. States, such as Turkey, that experience lower birth rates and
increased longevity are likely to benefit from a growing workforce and a falling
dependency ratio.144 The result is a ‘demographic dividend’, which occurs when a
generation has fewer dependents than its parents. Such a change is likely to increase
economic activity providing the initial impetus for greater industrial production; the
increased supply of new workers can, if handled properly, enable a country to become
more productive. There is evidence that demography accounted for about a third of East
Asia’s rapid growth over the past 30 years.145 Nevertheless, as they reach retirement age,
these demographic bulges can become economic burdens. Many African states have
high birth rates and may experience such a dividend should the economic and industrial
mechanisms required for its support be in place.

Generational Tension. Youthful, economically-exposed populations in the developing
world are likely to be highly volatile, resulting in periodic social upheaval, widespread
criminality and shifting allegiances. Such groups will remain amongst those most
vulnerable to job losses during periods of economic downturn and may make significant
contributions to political and social change during times of insufficiency. Inequality of
opportunity may result in a resurgence of political engagement by younger generations,
leading to an increase in activism and radical protest. However, in developed regions
where aged populations hold political power (the so-called ‘grey vote’), the younger
generation may feel disenfranchised and turn away from traditional politics.


Migration. The number of international migrants has increased from a total of 75 million a
year in 1965, to 191 million a year in 2005 of whom around 10 million are refugees, and
up to 40 million are illegal migrants.146 That number may grow to 230 million by 2050.147
Populations in many affluent societies are likely to decline, encouraging economic
migration from less wealthy regions. The net flow to more developed regions already
shows significant increases (see Figure 10). For example, in 1960, 57% of migrants lived
in less developed regions, but by 2005 just 37% did so. Europe had the largest number of
immigrants in 2005, followed by Asia and North America.148 Environmental pressures,
economic incentives and political instability will continue to drive population movement
from afflicted regions. Conflict and crises will also continue to result in the displacement of large numbers of people, mainly into proximate regions, which may find themselves at
risk of instability or exogenous shock. Such movement is likely to occur in regions of sub-
Saharan Africa and Asia. This is supported by data on asylum seekers that show almost
45% of asylum applications made to industrialised nations originated from Asia. Africa
was the second largest source continent with 30% of applications.149

Fig 10: Estimated Number of International Migrants by Region 1960 – 2005


Hot Topic – Urbanisation

The global urban population began to exceed the rural population in 2006. By 2040,
65% of people are likely to live in urban areas, with the majority of growth in the
developing world, especially in Africa and Asia.155 A considerable proportion of urban
growth is likely to occur in shanty towns, with the number of slum dwellers doubling to
around 2 billion by 2040. Rapid urbanisation is likely to lead to urban rather than rural
insurgency.156 Mega-cities157 are likely to remain significant, containing around 10% of
the global urban population. However, approximately 50% of urban dwellers are likely to
live within urban areas of less than 500,000 people. These regions are likely to absorb
nearly half the projected increase of the urban population and face the greatest shortfalls
in infrastructure and service provision increasing the risk of environmental disasters.158

Africa’s rate of urbanisation may be the fastest the world has ever seen. In 1950, only
Alexandria and Cairo exceeded 1 million people, but this may grow to 80 cities by 2040,
plus a cluster of mega-cities headed by Kinshasa, Lagos and Cairo. Such growth will
increase the resource burden and environmental impact of urban areas, especially as
their growth is likely to remain unplanned, and is possibly unsustainable. However,
although rapid urbanisation may result in a spate of failed cities requiring humanitarian
assistance, it is also an expected part of the economic development cycle, and has
numerous positive effects. These include, for example, better access to healthcare and
improved educational and employment prospects.

Urbanisation will be driven by a combination of forced migration and instability, the
pursuit of economic opportunity, and by the environmental consequences of climate
change. However, the most significant growth in urban populations is likely to occur due
to natural population growth, rather than from rural-urban migration. However, some
states, such as India and China, are likely to continue to experience significant levels of
rural-urban migration. Such movement is likely to produce tension in the recipient urban
areas. This tension is likely to be exacerbated by competition for land, accommodation,
access to resources and for employment opportunities. Cities are also likely to grow as
the regions that surround them increasingly taking on peri-urban characteristics.159
Regions undergoing transformation through peri-urbanisation are likely to experience
rapid societal change and mass adjustment to new employment and lifestyles.
Rapid and uncontrolled urbanisation without the required industrialisation to develop an
effective infrastructure and associated support structures, will challenge urban
governance and generate regions of instability, poverty and inequality. Most of the urban
poor will be employed in the informal sector and will be highly vulnerable to externally derived economic shocks and illicit exploitation.

As urbanisation continues, the growth of interdependencies and complex connections
between cities will increase. This has been exhibited in Asia, where a common economic
strategy has been the development of a heavy concentration of investment and urban
development in and around coastal regions.160 The result of this growth is a mega-urban
corridor stretching from Tokyo to Sydney through Seoul, Taipei, Shanghai, Hong Kong,
Kuala Lumpur, Singapore and Jakarta. As systems become intertwined with other urban
regions the increased complexity of networks are likely to increase the risk, and the
impact of catastrophic systems failure. Due to greater reliance on the Internet and
complex logistical supply and travel chains, coupled with global energy requirements and
the movement of power through global grids, it is likely that such complex, interlinked
networks could become increasingly fragile and susceptible to disruption.

Increased urbanisation and continued globalisation may, conversely, lead to a resurgence
of interest in local issues. Higher population densities will foster the requirement to
manage shared issues such as pollution, traffic access and neighbourhood crime.161 An
increasingly connected global community may, conversely, lead to the local environment
becoming increasingly significant both socially and politically as individual cities and
regions become their own distinct nodes on the global network, possibly reducing the
overall importance and relevance of the state.


Resource and Environment Dimension


For most of its history, humankind has striven to secure resources in order to improve
living standards and prosperity. During the last century, unprecedented numbers of
people lived in conditions of increasing affluence and most of those who did not, aspired
to do so. However, the trend in resource consumption is unsustainable; socially,
environmentally and economically. The Resource and Environment Dimension considers
how the aspiration to achieve ever higher standards of living, or to sustain existing levels,
will be constrained by the nexus between resource availability and environmental
limitations. In doing so, it considers the physical and environmental challenges that will
condition political and social choices, the interplay of demand with supply, the
environmental effects, and the consequences that may arise. These challenges include
climate change and the production, distribution and consumption of resources including
energy, food, water, strategic minerals and information.

The Hot Topics are Climate Change and Weak States, Food and Water and Minerals.

Trends and Drivers

Climate Change. Climate change is a Ring Road Issue. Overwhelming evidence
indicates that the atmosphere will continue to warm at an unprecedented rate throughout
the 21st century. This warming will affect production, availability, storage and use of
energy, food and freshwater. Concerted attempts to reduce emissions of greenhouse
gases, including carbon dioxide, methane, nitrous oxide and others, in addition to potential
limits on availability of readily accessible hydrocarbon resources, will stimulate intensive
investment in research to develop low-carbon energy production, as well as a focus on

Fig 12: Predicted Climate Change Temperature Increase 1960-2100


Hot Topic – Climate Change and Weak States

Weak states have limited capacity for governance, and many are unlikely to adapt to the
environmental challenges of climate change.168 Weak states are likely to have youthful
populations, large families and be dependant on rural production for their income.
Extreme weather events and increasing temperature will exacerbate instability due to
immediate shortages of food and water. Longer-term effects may include a degradation of
agricultural land that increases internal and regional migration. Weak states will be
insufficiently prosperous to procure alternative supplies through external markets. In
addition, they often have poor human rights records and suffer endemic corruption which
weakens governance and service provision, increasing the likelihood of recurring
instability. As the severity and incidence of internal instability increases, exacerbated by
climate change, long-term societal changes can occur, such as the creation of large
numbers of orphaned children or the displacement of large ethnic or tribal groups.

Conflict in Darfur provides an example of how climate change may affect weak states.
Prior to conflict, tensions were driven by drought. Although conflict began as a regional
rebellion, the underlying cause was probably desertification, with a drop in rainfall of
between 16% and 30% shifting the desert boundary 60 miles over 40 years.169 This
desertification probably limited the ability of local eco-systems to support agriculture,
resulting in tension and ultimately conflict between rival groups. The Sudanese
government lacked the necessary infrastructure and resources to respond to the crisis.
The initial regional uprising was suppressed through the recruitment of Arab militias, the
Janjaweed, which waged a campaign of ethnic cleansing against Africans, resulting in
around 500,000 deaths and 2 million environmental refugees.

By 2040, global temperature rises are likely to increase desertification in regions bordering
the Sahara, possibly leading to similar examples of climate-induced instability and conflict.
Countries such as Chad, Niger, Mali and Eritrea are susceptible to the same impacts that
may result in conflict between tribal or ethnic groups. Elsewhere, changing patterns of
rainfall distribution within the Monsoon belt in the Arabian Sea and South Asia may result
in similar instability. Even stable governments will face increasing challenges as
demonstrated by the flooding of New Orleans and the Mississippi Delta in 2005.

Energy Demand. Global Energy use has approximately doubled over the last 30 years170
and, by 2040, demand is likely to grow by more than half again. Despite concerns over
climate change, demand is likely to remain positively correlated to economic growth171
with fossil fuels, meeting more than 80% of this increase.172 Urban areas will be
responsible for over 75% of total demand. Industrialising states are likely to continue their
energy-intensive economic growth: infrastructure and increasing transportation are likely to account for over 85% of increases in global demand, with China and India accounting
for 45% of this increase.173 Most states will have to import energy, raising fears of
dependence on unstable producer states, and stimulating conservation measures,
diversification and the development of alternative supplies. A switch away from fossil
fuels to using electricity as the predominant transmission medium is possible. However,
the infrastructure costs and technological challenges, especially in aviation, would limit
any transition to wealthier regions of the world and certain sectors, such as domestic
usage and some forms of transportation. Fossil fuels will continue to be used in
developing regions that cannot afford to change.

Risks and Benefits

Disruption of Supplies. The periodic disruption of energy supplies from major exporting
states will cause global price spikes, which, in the most severe cases, may trigger wider
political instability, especially in economically vulnerable regions. Such disruption,
possibly caused by instability within producer states, resource nationalism, organised
crime, terrorist attack, disruption of transportation, or infrastructure bottlenecks is likely to
result in multilateral action to restore supply chains. Prolonged constraints on the free
market in energy may arrest or limit the globalisation process. Similarly, rapid fluctuations
in the supply of strategic resources, such as food or minerals, are likely to cause
significant and unpredictable economic, social and political dislocations, possibly on a
global scale.

Energy Security. The issue of energy security is one in which governments, and defence
organisations, will increasingly have to be engaged if states are to maintain their
standards of living, and to ensure adequate supplies of natural resources, at reasonable
prices. States who perceive that energy security is impacting on national survival are
likely to challenge conventional interpretations on the legality of the use of force.
However, the cornerstone of the UN Charter, which prohibits the threat, or use, of force in
international relations, will remain firmly in place.


Volatile Energy Markets. Energy supply will struggle to meet growing demand leading to
upward pressure on prices. When supply and demand for energy are closely matched,
rapid increases in demand to which supply can not react quickly can lead to large
variations in price; therefore markets are likely to be volatile. For example, from 2007 to
2008 the price of oil spiked from below $60 per barrel to almost $150 before falling back to
$40,179 affecting economic performance and investment decisions. Such destabilising
movements of energy markets are likely to be detrimental to those countries unable to
compete on price, resulting in more states following the example of China in establishing
bilateral arrangements that seek to circumvent global markets. This bilateralism, fuelling
tension amongst those who are excluded, may lead to political and even military
interventions in order to protect access and safeguard supply.


Hot Topic – Food and Water

By 2040, the global population is likely to increase to 8.8 billion requiring concomitant
increases in the supply of food and water. Given that agriculture accounts for over 70% of
global freshwater usage, the availability of food and water will be intimately related.181
Over 900 million people were undernourished in 2007. This represents a declining
proportion of the global population, but in absolute terms is 80 million more than in 1990–
92, with the largest increases in Asia and in sub-Saharan Africa.182 Similarly, it is
estimated that around 2.5 billion people live in regions suffering from water scarcity,
predominantly in Africa, the Middle East, as well as Central and East Asia. Of these
almost 900 million lack access to safe drinking water causing more than 5 million deaths
per year. Fertiliser production is an energy intensive process, and the challenge, with a
heavy reliance on science and technology, will be to produce more food on less land with
less water, fertiliser and pesticides, while using less energy.

Table 1: Regional Distribution of Available Arable Land

A disparity already exists between population size and availability of land for food
production in different regions. Global population growth will be unevenly distributed with
much of the growth likely to occur in regions, such as sub-Saharan Africa and the Middle
East, that already suffer from stresses to food and water supplies. Much of the growth will
be highly concentrated in sprawling urban centres that are likely to outgrow the ability of
their hinterland to provide for them. Asian countries with large populations and limited
agricultural land are likely to continue to invest in agricultural production abroad.
Moreover, climate change will affect food production, cultivation and animal husbandry
patterns, with some regions unable to grow current food staples, such as rice and
vegetables. Some previously fertile, densely populated regions will suffer declines in
agricultural production. Similarly, changing precipitation patterns will increase pressure on
water supplies and their associated industries and are likely to cause the number of water stressed regions to rise. When shortages are threatened, the adoption of export
restrictions for food, and disputes over water flows, are likely to increase, affecting global
supply, aggravating shortages and eroding trust. For example, extreme weather events in
2005–07, including drought and floods, affected major cereal-producing countries, and
world cereal production fell by 3.6% in 2005 and 6.9% in 2006 before recovering. In 2008,
the ratio of world cereal stocks to utilisation was under 20%, the lowest in 3 decades, with
major cereal producers including China, the European Union, India and the US holding
significantly low levels of cereal stocks compared with earlier years.183 Two successive
years of lower crop yields in a context of already low stock levels resulted in high global
food prices, export restrictions and subsequent political, economic and social difficulties,
such as food riots in West Africa, Haiti and Egypt.184

Competition for land usage will increase. For example, bio-fuel production utilised around
100 million tonnes of cereals (4.7% of global cereal production) in 2008. Concerns over
energy security are likely to lead to continued production of subsidised maize-based biofuels
out to 2020. This is likely to place stress on food production and to be a significant
source of demand for some agricultural commodities, such as sugar, maize, cassava,
oilseeds and palm oil. Food prices will remain highly correlated with volatile petroleum
prices which impact on fertiliser and transport costs. Sustained economic growth in
developing countries, especially China and India, has already increased their purchasing
power and the overall demand for food. This will continue with shifts in diet associated
with increasing prosperity, such as increased meat consumption, having knock-on effects
to the production of other food-stuffs and to associated demand for water. For example, it
is estimated to take 10kg of grain to produce 1kg of beef.185 Genetic and scientific
modification of crops to improve yields is likely to be necessary, to provide both for human
and animal consumption, especially the introduction of pest-resistant, drought resistant
and saline-tolerant crops capable of producing high-yields in challenging conditions.
However, biotechnology research is likely to remain dogged by commercial, political and
ethical issues that may slow the introduction of such crops, particularly in Europe.

World marine fishery resources have remained relatively stable since 1990, despite the
deterioration of some fish stocks in specific regions. However, the contribution of
aquaculture to global supplies of fish, crustaceans, molluscs and other aquatic animals
increased from around 4% of total production in 1970 to over 32% in 2004, growing more
rapidly (8.8 percent per year since 1970) than all other animal food-producing
sectors.186,187 Production from aquaculture has outpaced population growth, with per capita supply increasing from 0.7 kg in 1970 to 7.1 kg in 2004, representing an average
annual growth rate of 7.1%. East and south eastern Asia are likely to remain the regions
most dependent on marine produce in diets. Out to 2040, the marine environment will
continue to see significant increase in demand. Fishery resources are likely to
stagnate,188 with stocks remaining under constant heavy pressure and requiring careful
husbanding to prevent major species becoming further depleted or extinct. Technological
advances in aquaculture, combined with sheer necessity, will lead to further increases in
farming activities, especially in the littoral regions, but possibly in oceanic regions.
Aquaculture output is likely to increase by more than 50% placing stress on fragile
ecosystems and adversely affecting biodiversity.

By 2040, one-third of the world’s population will live in areas of water stress. Any increase
in global temperatures will raise the moisture carrying capacity of the atmosphere and
may lead to an overall increase in precipitation, especially in the Tropics and at high
latitudes. However, mid-latitudes and semi-arid low latitudes may see less precipitation
and increasing evaporation leading to decreased water availability. Asia, especially India,
is particularly dependent on meltwater from Himalayan glaciers and may see an initial
surge followed by a long-term decline as glaciers retreat. Per capita water consumption
will continue to rise depleting existing water supplies, especially aquifer-borne fossilised
water that is extensively exploited in desert and urban areas.

Access to freshwater is an essential component of economic development, stability and
health. Over 260 river basins are shared by 2 or more countries and 13 are shared by 5
or more countries. Many of those shared water resources are situated in regions, namely
the Middle East and Africa, also facing the challenges of high population growth, stagnant
economic growth, and political instability. Any increase in pollution, particularly from
agricultural fertilisers and the poorly managed by-products of industrialisation and rapid
urbanisation, will further threaten water availability and lead to a decrease in biodiversity.190 In China only 50% of cities treat waste water and 5 of the 7 major river
systems are classed as severely polluted.191 Furthermore, water extraction from the
Colorado River, the Rio Grande and the Yellow River already results in them failing to
reach the sea for at least part of each year.192 Water scarcity will be offset in the
developed world through conservation and probable increases in the use of desalination.
However, the desalination process is energy intensive and is likely to require increased
investment in nuclear fission plants to generate the large amounts of energy required. In
the developing world, increases in efficient use of water through improved irrigation, such
as drip-fed systems, are likely to be employed.

Risks and Benefits

Food Price Spikes. Increasing demand, and climate change, may affect the supply of key
staples by, for example, drastically depleting fish stocks, or significantly reducing capacity
to grow rice in South East Asia or wheat on the US plains. A succession of poor harvests
may cause a major price spike, resulting in considerable economic and political
turbulence, as well as humanitarian crises of significant proportions and frequency.
Genetic and scientific modification of food is likely to be necessary, both for human and
animal consumption and for biofuel production.

Conflict over Water. Inter-state conflicts caused by disputes over water distribution are
possible, but historical experience indicates that countries generally seek equitable solutions to water disputes, and this is likely to remain the case. International agreements
concerning access to water, such as those between India and Pakistan and between East
African states, are likely to provide a basis for compromise. International trade, and the
off-shoring of agricultural production to fertile regions will serve to mitigate the most acute
water stress. However, increasing water stress will contribute significantly to tensions in
already volatile regions, possibly triggering conflict. More importantly, localised water
scarcity is likely to inhibit economic development and generate internal conflict within
states as groups compete for access.193 Water management problems, such as pollution
or localised flooding due to increased precipitation, run-off from urban sprawl and rapid
glacial melt, are likely to challenge the ability of already weak states to provide for their
populations. The most adverse consequences of water management problems are
unlikely to be confined to remote rural regions. They are likely to be centred on rapidly
expanding urban areas. Those regions most at risk include north Africa, sub-Saharan
Africa, the Middle East and southern and Central Asia, including China.194

Mass Population Displacement. Combinations of food and water insecurity, climate
change and the pursuit of economic advantage may stimulate rapid and large population
movements destabilising neighbouring regions. In particular, sub-Saharan populations
will be drawn towards the Mediterranean, Europe and the Middle East. In Southern Asia,
coastal inundation, environmental pressure on land and acute economic competition may
affect large populations in Bangladesh and on the east coast of India. Similar effects may
be felt in the East Asian archipelagos, while low-lying islands may become uninhabitable.
The developed world will face significant illegal migration pressure, and ethical dilemmas
in determining how to deal with humanitarian effects.

Environmental Impact. Water and air pollution, and soil degradation through acidification,
contamination, desertification, erosion, or salination will remain problems, especially in
densely populated, rapidly industrialising states. Environmental degradation, the
intensification of agriculture, and pace of urbanisation may reduce the fertility of, and
access to, arable land. Technological and organisational solutions will emerge, such as
improvements in the use of fertilisers, as will behavioural solutions, as waste becomes
increasingly socially unacceptable and processes and accepted norms adapt.
Environmentalism will remain a powerful movement, enjoying a broader base of support
that encompasses elements of the developing world.

Biodiversity. Biodiversity is likely to become prized as research into the extent and
variability of different forms of life yield significant technological and health advances. On
land, diversity will be reduced as a side-effect of mass agricultural production techniques,
industrialisation, urbanisation and through continued erosion of natural habitats, especially
tropical rainforests. In the maritime environment, pollution and climate induced changes
will degrade biodiversity, especially in Australasia where coral habitats are likely to be
particularly affected. Bio-diverse regions are likely to be valued more highly by the global
community than local communities, often resulting in tension between conservation and
economic use.

Geophysical Risks. Between 1980 and 2000, 75% of the world’s population lived in areas
affected by a natural disaster and, since 1998, around 500,000 people have been killed by
earthquake activity alone,195 with the 2004 Indian Ocean tsunami accounting for over 40%
of this total. Population growth, urbanisation in geophysically unstable regions, variable
construction standards, and limitations of predictive and warning mechanisms suggest
that casualty figures of this magnitude will be typical out to 2040. Demands on land usage
will lead to increasing habitation in areas of significant risk, such as those susceptible to
volcanic and seismic activity or low-lying coastal areas subject to inundation by tsunami.
The net result is likely to be an increase in the scale of humanitarian crises and
associated migration pressures.

Resource Nationalism. Resource nationalism is state control or dominance of particular
resources, especially energy, and the use of this power to achieve national political
objectives. In 1978, international companies controlled production from 70% of oil and
gas reserves; at present they control only 20% with national or state-dominated oil
companies controlling access to 75% of proven conventional reserves.196 National Oil
Companies (NOCs) already account for 14 of the top 20 oil and gas production
companies.197 This control is unlikely to change significantly although most NOCs will
continue to recognise the interdependence that exists between producers and consumers.
However, resource-rich states, especially those with ideological, geopolitical and populist
agendas, such as Iran, Russia and Venezuela, or groupings such as Organisation of the
Petroleum Exporting Countries (OPEC), will use, or threaten, all available levers of power
to advance economic and foreign policy goals.

Risks and Benefits

Resource Wars. Supply disruptions caused by scarcity, hoarding or withholding of vital
resources may cause conflict both between states and within states as groups vie for
access. States that are unable to access the necessary materials to allow their
population to survive and prosper, either through international markets or bilateral
arrangements, may resort to the use of force. The range of outcomes associated with
climate change heightens this risk.


Hot Topic – Minerals

During the Cold War a number of strategic non-energy minerals, essential for national
economies and security, were regarded as vulnerable to supply disruption. These
minerals, including chrome, nickel, cobalt, manganese and platinum (chiefly produced by
South Africa and the then Union of Soviet Socialist Republics) were not available
domestically and could not be guaranteed in time of crisis.

Out to 2040, a range of new factors influencing availability and supplies of certain critical
minerals will remain vulnerable to disruption. Demand for minerals is likely to continue to
increase in response to population growth, continuing industrialisation and higher material
prosperity. New discoveries allied to technological advances will provide sufficient
reserves, such that accessibility, rather than availability, is the primary concern.

Fig 14: Distribution of Strategic Minerals (British Geological Survey)

Increasing demand for natural resources from developing economies, especially China, is
likely to continue. Differing standards of financial and environmental regulation and
transparency are likely to lead to growing influence in producing regions, such as Africa.
Production of certain minerals, such as the Rare Earth Elements (REE), antimony and
arsenic, is currently dominated by China. However, if supplies were disrupted alternative
deposits are likely to be available for exploitation. In contrast, the location of fewer
tungsten deposits are known and the impact on global markets of disruption to Chinese
supplies is likely to be significant.

Table 2: Global Mineral and Metal Resources

Certain minerals, such as iron ore, nickel, aluminium and coal, are not particularly
vulnerable to disruption as supplies are widely distributed throughout the world. Other
minerals, such as silver and gold, are also low risk as they are not critical to industrial
processes and can be substituted. Various minor metals produced in very small quantities,
such as gallium and germanium, are generally by-products of other more widely used
metals, such as aluminium, copper, lead or zinc, and are recovered only from a few
deposits. Their production is therefore inextricably linked to that of the major metal and
cannot be easily raised to meet increasing demand.


Risks and Benefits

Rapid Climate Change. Unexpectedly rapid climate change is likely to significantly shrink
the global economy. Feedback mechanisms may cause the rate and magnitude of
climate change to be greater than consensus forecasts, making mitigation and adaptation
difficult and expensive. For example, the costs of stabilising atmospheric carbon dioxide
levels may reach 2% of annual global output by 2050, although this estimate masks large
variations across countries and regions.202 US could suffer only a 1% cost, but India and
Africa may suffer costs of up to 5% of output.203 Failure to develop technologies in time to
alleviate the worst effects of climate change is likely to result in severe economic
dislocation, causing a reduction in consumption per head of up to 20%,204 with associated
political, social and security implications, especially in states that are subject to the most
extreme effects.


Risks and Benefits

Economic Migrants. Large differentials in per capita income are one driver for migration,
inducing, for example, large-scale rural-urban migration in China, and international
migration from Latin America into the US and from Africa into Europe. Cross-border
income discrepancies can be extremely high. For example, Spain has an average income
of $31 000, but Morocco’s is only $4 000. The tension between the desire of migrants to
pursue economic and other opportunities in developed countries, and the willingness of
host populations to accept continued migration will determine the future level of controlled
migration. The developed world, particularly Europe, is likely to require immigration in
order to maintain its workforce and skills base, and to compensate for its declining
indigenous workforce. However, in phases of below trend economic growth, political
pressure is likely to limit immigration in order to protect indigenous employment, leading to
a surge in illegal migration, which will remain a security challenge.


The Role of Multinational Corporations. Over the last 30 years, industrial production has
been de-centralised and geographically distributed in an unprecedented manner.
Countries, regions, and firms have specialised in particular stages of a product’s
manufacture in response to competition, internationalising the markets for goods, services
and labour. Such specialisation requires large-scale transportation of components, and
this has been facilitated by technological advances in transport and communications, and
trade liberalisation.227 MNCs and out-sourcing have emerged as integrating factors in the
globalised economy, producing networks of interdependence between states that are
unprecedented in scale and pervasiveness. This integrating effort is likely to persist out to
2040. The rise of state-owned enterprises (5 of the 10 largest MNCs are currently stateowned
by the Chinese, Brazilian and Russian governments) is likely to continue, as is the
proportion of MNCs based in emerging rather than developed economies.

Risks and Benefits

Defence Industrial Base. Ownership and production within defence firms has become
increasingly internationalised as MNCs seek competitive advantage. For example, in
1988 of the 15 leading European defence suppliers, 8 were state-controlled and 2 more
had been in the recent past. By 2006, only one of the top 15 had a majority state
holding.228 The geographical distribution of critical technologies, Research and
Development (R&D) activity, and production has shifted from a national to an international
base with the possibility of disruption to procurement chains especially in times of tension
and conflict.