The world is changing. There are contradictory schools of thought as to the manner in which it will change and what global issues will impact American economy in the next decade. Following are a few ideas on what we should focus on to usher in a future that works for us.
In “The World is Flat”, Friedman has called the current global landscape; the “genesis moment of the flat world” (Friedman, 2005). He has envisioned a continued increase in global collaboration; where country borders become more irrelevant. With more uploading, outsourcing and offshoring happening globally, “people can work with other people on more stuff than ever before” said Fieldman, creating an increase in economic interdependence; leading to a growing reluctance of countries to go to war against each other (Fieldman, 2012).
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This is positive and logical. However, it is important to be prepared for threats on national and global stability. For example, despite recent political isolation and the threat of financial and energy sanctions against Russian aggression in the Ukraine; Russia has yet to back down. When economic interdependence increases to the point when going to war with another country is completely against public opinion in representative democracies; then the potential for future global stability is great. However, we’re not going to get there within the next decade. The view that the world is “semiglobalized” and companies must still reckon with cross border differences (Ghemawat, 2007), is more realistic when considering what we should do now; to ensure that the next decade brings about a future we’re prepared for.
The Middle East is the most unstable region in the world. It is defined by undemocratic governments and media censorship. There is a gradual decrease in per person income in Iran and Iraq (Gapminder, 2014). Undemocratic governance combined with growing levels of poverty is not a recipe for a stable energy provider. Currently, America is definitely reducing its fuel dependency to the Middle East. Fuel dependency is currently at only 33% of total fuel consumption, no matter how you look at it (US Energy, www.eia.gov). This is good news. However, it should be considered in the context of foreseeable depletion of fossil fuels as a natural resource. Once the American fuel reserves are over, what options would America have? Fossil fuel, typically takes millions of years to replenish. Using them also increases the level of pollution in the environment, making fuels costly to the environment. Therefore, investing in making America energy efficient is of paramount importance for long term political and economic stability.
Clean, renewable energy is sustainable and it’s not going to run out. Sun, wind and water are self-sustaining energy sources. They are non-polluting, renewable and efficient. Across the globe, countries are investing in wind, water and solar energy. If we can implement the use of renewable energy as our primary energy source; we will not face the risk of being dependent to the Middle East for fuel at any point in the future. November 2014 was when the historic US-China agreement to cut global warming pollution took place. This is a giant boost for the clean energy markets and indicates that business interests are trending towards efficient energy. The World Bank’s recent decision to invest heavily in clean energy and limit funding for coal projects is another example of the trend to support renewable energy.
President Jim Yong Kim talking prior to the UN climate summit in Peru, has stated his alarm at the findings of the Potsdam Institute for Climate Impact Research in Germany that the World Bank has commissioned. The research indicates that past greenhouse gas emissions have led to the world facing unprecedented weather events. He stated that the findings are “alarming” with “once-in-a-century” events” becoming “the new climate normal”. The World Bank has traditionally been one of the largest funders of fossil fuel projects and has been criticized as contributing to the problem of non-renewable energy. Kim has stated that their current policy is to: “focus is on being able to ramp up our lending and the leveraging of our lending into all forms of renewable energy”.
It is also important to look at what can be done to restore global decline in the form of desertification, which is land that is turning into desert. Desertification affects two thirds of the world’s grasslands. Biologist Allen Savory has documented success with restoring land to pre-desertification levels. In the last 100 years, modern rain science has accelerated desertification. This was discovered by Savory first in Africa and later in America. His cure for desertification uses livestock grazing to mimic nature (Savory, 2013). Investigating and implementing his fantastic success would be a game changer globally. If desertification can be permanently reversed; it will radically increase productive, healthy land that can sustain communities and livestock in the future, leading to economic growth. Scientific American has stated that Savory has discovered that the “annual rite of movement through a region by large herds actually protects the environment.
A wildebeest migration in central Africa, for instance, eats up grasses as it moves along and leaves behind a protective layer of trampled dung, dust and soil”. The layer of trampled earth has the density to trap carbon, break down methane and increases in health, thereby producing more growth to feed returning grazers. This increases the quality and quantity of the livestock as well as that of the soil (Sullivan, 2013).
Population growth that cannot be sustained by the planet’s resources is another national and global issue of the future. Hans Rosling, co-founder of Gapminder has made an excellent case of understanding the facts that drive unstable population growth as well as what needs to be done to stabilize it. In “Population growth explained in IKEA boxes” by Hans Rosling’s, Rosling has stated that if we can avoid climate change and invest in clean energy; upward mobility of emerging economies of the globe is possible. He has called child survival “the new green”, by linking high child survival rates to stable population growth. He has found data that shows a correlation between advancement in education, economy, relative aspirational levels; and population growth. In the next decade, the poorest 2 billion in the world; who have no family planning or education, will double.
Rosling has urged that: “we cannot have people on this level, looking for food and shoes, because then we have population growth” Even with relatively their lower child survival rate (70% – 80%), the unplanned families that comprise the poorest 2 billion average 4 surviving children each. The only way to get world population to stabilize, according to Rosling and Gapminder data; is by increasing child survival and investing in education. The investments by Gates Foundation, UNICEF etc. are commended by Rosling, and he has advocated that their cause be taken up by the rest of the world. (Rosling, 2010). Rosling believes in the possibility of capping unstable population growth if we help educate and invest in the poorest 2 billion. Unstable pockets of growing poverty also tend to increase national and global political threats as well as causing unsustainable resource depletion.
It is fortunate that ideas and information that can create positive changes in the world are already available. Having an understanding of the global issues that are relevant today and how they are likely to develop in the future, we have the opportunity to invest in areas that can positively impact the future. By increasing global collaboration; creating an efficient energy system; restoring land to pre-desertification standards; and investing in the poorest 2 billion; we have an opportunity to change the future for the better.
