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MBENDI : A LOOK INTO THE FUTURE















The population of the world continues to grow, as does the average standard of living, increasing demand for food, water, energy and waste disposal and placing increasing pressure on the environment. Certainly the dramatic decline in global fertility has led to a decrease in the population growth rate from 1.52% per year in 1990 - 1995 to 1.15% in 2010 - 2015. Nonetheless, there is an 80% probability that the world population, now 7.2 billion, will increase to between 9.6 and 12.3 billion in 2100. The wealthy countries of Europe, Asia and the Americas face rapid population ageing, while Africa and some countries in Asia prepare for the largest cohort of young people the world has ever seen. The 49 poorest countries, particularly in sub-Saharan Africa, continue to face premature mortality and high fertility. The lot of women, in servitude to ignorant men in many parts of the world, continues to look bleak.





In most countries life expectancy is increasing, leading to larger populations of retirees who require pension and health benefits to last longer. In the last 20 years the population of persons aged 60 years or over has increased by 56% from 490 million in 1990 to 765 million in 2010. During this time, the increase in the population of older persons in developing countries was more than twice (72%) that of developed countries (33%). Projections are that more than 20% of the global population will be age 60 and above by 2050 and the number of older persons will surpass the number of children by 2047. Many developed countries are already facing extremely low old-age support ratios. The health care sector is also under pressure to provide more cost-effective solutions. With 80% of deaths from cancer, heart disease and other chronic diseases now taking place in low and middle income countries, demand for low cost medicines in developing countries is leading to conflicts with first worl d pharmaceutical companies determined to protect their intellectual property.




Relentless productivity improvements are causing rising unemployment. The challenge to provide decent work to young people is a concern for both industrialized and developing countries. Of the estimated 197 million unemployed people in 2012, nearly 40% were between 15 and 24 years of age. The global economy will need to create 600 million productive jobs over the next decade in order to absorb the current unemployment levels and to provide employment opportunities to the 40 million labour market entrants each year. Paradoxically while the world's workforce is growing apace, education systems are failing to provide enough skilled professionals, artisans and managers to meet demand, particularly for the mining, energy, construction and education sectors. This situation is likely to worsen as an ever-shrinking proportion of the world's population is able to provide the goods and services required by all.





All these issues are placing pressure on private and state social security systems. As a result, national budget deficits are likely to worsen and could lead to default as politicians fail to face up to proper funding of future liabilities for fear of electoral defeat or even social unrest, already on the rise in countries with high unemployment levels.





Wage growth has significantly lagged behind labour productivity growth in most countries; since 1999, average real wages have increased by just 5% while labour productivity has grown by 15%. The income gap between the wealthy, on the one hand, and, on the other, average workers and the unemployed poor, continues to grow, another potential source of social conflict. The number of people living in extreme poverty fell from 47% of the total population of developing countries in 1990 to 22% in 2010, a reduction of 0.7 billion people. However, that said, 8.4% of the adult population in the world commands 83.3% of global wealth, while almost 70% possess only 3%. From 1988 to 2008 more than half of the economic gains went to the richest 5%.






Though food supplies have more than kept pace with rising population levels in the past, a combination of biofuels, rising standards of living and climate change, including floods and drought, are stressing agricultural production and leading to significant increases in food prices. With food already representing 10-20% of developed consumer spending but 65% of developing nation consumer spending, this impacts most on the world's poor. Applying modern agrobusiness methods in Africa and Asia will drive subsistence farmers off the land. According to the UNDP, 40% of the world's population will suffer water shortages by 2050. Scientists forecast that there could be no commercial fishing by 2048 as present levels of fishing would cause stocks to decline to less than 10% of maximum catches recorded.






Fuelled by demand from China, the resource industry has grown worldwide. Supplies of oil, gas, coal and uranium are forecast to peak as reserves are depleted, though technology to access shale gas and oil has deferred that peak. At the same time, fear of climate change is putting pressure on the energy sector to move away from carbon burning to solar, wind and other environmentally friendly energy sources, difficult to envision in the current era of low oil prices. The future of nuclear energy is uncertain after the Japanese disaster and new project budget overruns. The combined pressures of environmental regulation and higher energy costs will lead to the relocation of energy-intensive, polluting industries, such as smelting and pulp and paper production, to developing nations with fewer safeguards.






Experts, in the face of aggressive disinformation campaigns by sceptics, warn that world temperatures could rise significantly during the 21st century, leading to climate changes everywhere, unless governments, companies and individuals take corrective action soon, something not likely after the dismal Doha meeting in November 2012 even though recent research shows global warming accelerating. Australia, for instance, is experiencing record high temperatures yet persists in exporting coal and natural gas, while depending largely on coal fired power stations. In 2013 the world emitted 35,094 million tonnes of carbon dioxide, up 2.1% on 2012. There is disagreement between developed nations, with a history of pollution, and developing nations, industrialising to improve standards of living, on the appropriate action to take. The transport industry is the one most likely to be impacted by the combination of rising standards of living in the developing world, specially China and India; variable prices of hydrocarbon fuels; and efforts to mitigate global warming. There will be a move to more hydrocarbon-efficient vehicles. Transport infrastructure will have difficulty coping with forecast increases in traffic.






The global economy continues to grow, though very slowly, with a low energy cost USA and Asian countries leading the way with export led manufacturing and services industries. However, this growth is dependent on buoyant consumer markets in Europe and North America. While many countries of the world continue to report regular GDP growth, the growth itself is uneven within countries with the rich growing richer and the poor poorer. As the average standard of living in booming economies rises, so too does the number of poor people around the world, many of them moving from the countryside to unemployment in the city slums as part of a search for a better lifestyle. More than half the human population became urban by 2008. Cities and towns are now growing at an estimated 1.3 million persons per week. International migration has become a key feature of globalisation in the 21st century and 230 million people, 3% of the world’s population, currently live outside their country of o rigin.






Globalisation now comprehends the movement not just of physical goods, but also services, finance, people, information and ideas. As a result the world is becoming ever more interlinked putting pressure on global, national and local governance systems designed in a previous era by those with power and influence at the time and, as fiscal, trade and environmental agreements are negotiated, even now. At one and the same time, we are seeing the move to larger, and even global, groups covered by the same regulations as well as to the creation of smaller entities with niche interests. Corruption and crime, particularly drug and human trafficking, have become huge international money spinners.






Economic power is shifting from the governments and companies of the USA and EU to those of the energy rich countries of the Middle East and Russia, low cost Asian manufacturers and service providers and South American agribusiness. Asia now has nearly 60% of the world's population, accounts for more than 35% of world output and 26% of world trade and has contributed more than 50% of post 2000 world economic growth. Asian average per capita incomes are now 25% of those of the USA and rising though 20% still live in poverty. Wage growth has significantly lagged behind labour productivity growth in most countries; since 1999, average real wages have increased by just 5% while labour productivity has grown by 15%. Although reports give the impression of a large scale move in manufacturing capacity from the G7 countries to Eastern Europe and the Far East, where wages are lower, the reality is that the move has been much more gradual and less spectacular. Companies domiciled in developi ng nations are increasingly buying companies in the developed world.





Military power could well follow the shifts in economic power. Although killing is decried by all the major beliefs, it's patently clear that this is not a commandment that is practised, specially amongst the most fervent believers. Tensions could be exacerbated as groups with different beliefs and ideologies battle to control scarce resources. Traditional warfare between national armies is increasingly being replaced by terrorist groups representing dissident groups and prepared to conduct suicide missions against civilian targets; drones and other weaponry that is more powerful and can be more closely targeted; and cyber-sabotage. The spread of nuclear weaponry continues to be a major risk. Most of the national boundaries we know today were created at the end of major wars, often by politicians with their own agendas and complete ignorance of what is happening on the ground. The world would be a more efficient place if it was organised into a hierarchy of logical units where the citizens use the power of communications technology to share ideas and agree on regulations and budgets.



Technology provides the best hope for solutions to challenges ranging from cheap medicines to food production and from greater global democracy to converting the heat of the sun to other forms of energy. Technology continues to play an important role in communication, entertainment and improving productivity. The rise of the Internet has made people data rich and information poor while convergence is leading to the merging of computers, cell-phones, hi-fi, TV and other electronic devices, as well as the blending of cable, wireless and satellite communication. Smart-phones have become the cake and circuses to distract the modern unemployed. The rise of outsourcing services in countries such as India and the Philippines is underpinned by improvements in the global telecommunications infrastructure. In the financial sector, technology is also allowing stock exchanges of the developed and developing worlds to merge and provide sophisticated trading products. A shift is taking place fro m traditional money managers to sovereign wealth funds managing the proceeds from huge trade surpluses, hedge funds and private equity groups, all of which are less transparent and relatively unregulated. In time, technology improvements will also lead to knowledge management jobs being replaced by artificial intelligence. The gainers will be the deployers of capital provided consumer markets don't shrink.





And Africa? Sub-Saharan Africa is set to be by far the fastest growing region, with population increasing from 1 billion today to between 3.5 and 5 billion in 2100. In the short to medium term, the continent will be prized as a source of minerals, energy (oil, gas, uranium, coal, solar) and arable land rather than for its people. The challenge for its leaders will be to avoid corruption while making best use of the rent to educate a fast growing population and provide an infrastructure so they can produce competitive goods and services, if only for local consumption. As with cell-phones, there will be opportunities to use new technologies to leap-frog countries with a vested interest in obsolete technology, though in the medium term technology could lead to the rape of African resources with minimal local manpower involved. Three external factors would make a significant impact on the African energy sector, the continent's largest by far: Shale oil and, particularly, shale gas is changing the economics of hydrocarbon supply and demand; climate change is getting a higher profile and this could put pressure on consumers of coal, particularly, and oil while emphasising the benefits of gas; and, finally, changes in renewable technology and the advent of electrically powered vehicles could reduce the demand for coal-fired generation and petroleum products. Each African country will be impacted differently by these trends. For Africa's people, the biggest drawback will be rulers who come to power through the gun in order to feather their own nests and those of their cronies.





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