By Chan Kung*
Economists view the world economy and society, especially in the United States, differently from intelligence analysts, with varying degrees of skill and accuracy. In 2004, the year Facebook was founded, the U.S. was already wondering what the world would look like 16 years later in 2020. A 119-page report by the National Intelligence Council titled “Mapping the Global Future”, which was released in 2004, showed some of these forecasts.
First, the authors of the report sensed that the world in 2020 will be approaching an inflection point. Aware of America’s waning influence, they wrote: “At no time since the formation of the Western alliance system in 1949 have the shape and nature of international alignments been in such a state of flux.” 16 years ago, they believed that by 2020, the trend would be one that “dramatically altered (America’s) alliances and relationships with Europe and Asia,” as European allies prioritized the European Union over NATO and Asian allies adjusted to the rise of China and India.
Second, the rise of the “America first” movement. The report stated that “a lot of Americans are getting tired of playing the world’s policeman” and shouldering the burden of securing allies is a rotten deal. Even leaving the United Nations (UN) in the United States is a bad deal. This prediction, made 16 years ago, now seems completely correct, because there are “America Firster” groups calling for the UN to leave New York, and the current U.S. president himself is a strong supporter of the “America First” movement.
Third, the decline of international institutions. In this regard, this 16-year-old forecast report was right again. It foreshadowed the impotence of organizations such as the UN and the World Trade Organization (WTO) in the face of climate change, trade wars, and other challenges. 16 years ago, the intelligence officials predicted that “some of the institutions that are charged with managing global problems may be overwhelmed by them” and that “such post-World War II creations as the United Nations and the international financial institutions risk sliding into obsolescence unless they adapted to shifting global power dynamics.” In fact, this “adaptation” never really happened, so now, 16 years later, the authority of international institutions is in irreversible decline.
Fourth, escalating competition between the U.S. and China. It may be said that global economists are enthusiasts and eulogists of globalization, while information analysts are just the opposite. It is not just information analysts in China (such as ANBOUND) who predict this, but the same is true in the United States. 16 years ago, though American intelligence officials did not envision the trade war, the report’s authors predicted that “rising nationalism in China and fears in the US of China as an emerging strategic competitor could fuel an increasingly antagonistic relationship.” In addition, they also presciently pointed to the ripple effects, noting that the United States would have to design a vision of “security and order” in Asia to rival China, and that countries such as Japan would feel compelled to choose between “balancing” against or “bandwagoning” with China. In fact, since the formation of the “1+3 model” that advocated by ANBOUND, Tokyo has so far opted for “balancing”.
Fifth, the North Korean nuclear crisis. Writing before North Korea tested its first nuclear weapon, intelligence officials foresaw that “the crisis over North Korea” would “come to a head sometime over the next 15 years.” They are right that Pyongyang is now developing nuclear weapons and may have anti-ballistic missiles by 2020, which has prompted America’s allies in the region to consider developing their own nuclear weapons. These are the very factors that led Trump to first threaten war and then pivot to diplomacy with Kim Jong-un. The changes in today’s world were planned 16 years ago.
Sixth, the ascent of the populist states. The report’s authors thought that “charismatic, self-styled populist leaders” playing “on popular concerns over inequities between ‘haves’ and ‘have-nots'” would “emerge as a potent political and social force” in reaction to the dislocations of globalization. Their emergence has created a mismatch of “political and social forces”. On the one hand, they oppose globalization, and on the other hand, they still need global capital and technology. But the report’s authors thought these figures would primarily arise in developing countries in Latin America and Asia, not in advanced democracies such as the United States and the United Kingdom. In fact, 16 years later, populist forces are emerging across the globe.
Seventh, the ascent of China and India. 16 years ago, American intelligence officials described the rapid rise of China and India as twin phenomena, noting that these developments “would transform the geopolitical landscape” in a manner reminiscent of “the advent of a new kingdom”. The report’s authors accurately forecasted the economic and population growth of both emerging powers 16 years ago, but they missed the fact that it would be China’s rise far more than that of India, and that India’s value and influence beyond 2020 are not to be underestimated.
Of course, it’s impossible to parse all the report’s predictions in this article, and there is no need to do so for a forecast report published 16 years ago. Judging from the final results, this 16-year-old forecast report was both right and wrong on several key issues, which is in line with the law of research. The main forecast error in this report is that the report suggests a military confrontation between China and Taiwan over Taiwan’s declaration of independence, at least not yet. There is also a forecast error in Russia, where the 16-year old report argued that demographic and public health challenges would limit Russia’s ability to become a major global player. They did not expect Russia to meddle in the U.S. affairs and European elections, as well as Russia’s invasion to Ukraine. However, U.S. intelligence officials do acknowledge that Vladimir Putin is a master of stirring-up nationalism and that his successor would continue to yearn for Russia’s imperial past.
The report’s authors are more nuanced about globalization. Intelligence analysts believe that a catastrophic event such as a pandemic or a major terrorist attack could slow or halt globalization, but they also believe that the growth of interconnectedness is irreversible. They describe globalization as “a pervasive force that will largely shape all other major trends in the world in 2020.” That was a cautious attitude in the midst of the globalization boom. Of course, 16 years later, global connectivity is more reversible than what the American intelligence officials had imagined.
It is worth pointing out that various macro forecasts and assessment reports are the main application fields of intelligence and information analysis, including environmental assessment reports and various research reports at the industry level. Research reports of this nature are widely used in Western markets, especially in the financial sector, where these researches are usually conducted by the fund industry. In contrast to economic research and reports (which rarely go beyond the two-year cycle), this type of research focuses on framing and constructing scenarios that provide the basis and platform for strategic decision-making at both the national and corporate levels.
Final analysis conclusion:
Generally speaking, one of the biggest knowledge differences between developing and developed countries lies in the importance attached to such scenario studies. Due to the large capital scale, developed countries will naturally be cautious when they have more money, so they must pay attention to this kind of scenario study. As for developing countries and enterprises, they may not necessarily do so. In addition, analysis based on personal experience and over-generalization were the mistakes they (the so-called “intelligence analysts” in developing countries) often made, which is also an important reason why their wealth is always “easily transferrable”.
*Founder of Anbound Think Tank in 1993, Chan Kung is now ANBOUND Chief Researcher. Chan Kung is one of China’s renowned experts in information analysis. Most of Chan Kung‘s outstanding academic research activities are in economic information analysis, particularly in the area of public policy.