GLOBAL TRENDS: “Paradox of Progress” Report


We are living a paradox: The achievements of the industrial and information ages are shaping a world to come that is both more dangerous and richer with opportunity than ever before. Whether promise or peril prevails will turn on the choices of humankind.
The progress of the past decades is historic—connecting people, empowering individuals, groups, and states, and lifting a billion people out of poverty in the process. But this same progress also spawned shocks like the Arab Spring, the 2008 Global Financial Crisis, and the global rise of populist, anti-establishment politics. These shocks reveal how fragile the achievements have been, underscoring deep shifts in the global landscape that portend a dark and difficult near future.
The next five years will see rising tensions within and between countries. Global growth will slow, just as increasingly complex global challenges impend. An ever-widening range of states, organizations, and empowered individuals will shape geopolitics. For better and worse, the emerging global landscape is drawing to a close an era of American dominance following the Cold War. So, too, perhaps is the rules-based international order that emerged after World War II. It will be much harder to cooperate internationally and govern in ways publics expect. Veto players will threaten to block collaboration at every turn, while information “echo chambers” will reinforce countless competing realities, undermining shared understandings of world events.
Underlying this crisis in cooperation will be local, national, and international differences about the proper role of government across an array of issues ranging from the economy to the environment, religion, security, and the rights of individuals. Debates over moral boundaries—to whom is owed what—will become more pronounced, while divergence in values and interests among states will threaten international security.
It will be tempting to impose order on this apparent chaos, but that ultimately would be too costly in the short run and would fail in the long. Dominating empowered, proliferating actors in multiple domains would require unacceptable resources in an era of slow growth, fiscal limits, and debt burdens. Doing so domestically would be the end of democracy, resulting in authoritarianism or instability or both. Although material strength will remain essential to geopolitical and state power, the most powerful actors of the future will draw on networks, relationships, and information to compete and cooperate. This is the lesson of great power politics in the 1900s, even if those powers had to learn and relearn it.
The US and Soviet proxy wars, especially in Vietnam and Afghanistan, were a harbinger of the post-Cold War conflicts and today’s fights in the Middle East, Africa, and South Asia in which less powerful adversaries deny victory through asymmetric strategies, ideology, and societal tensions. The threat from terrorism will expand in the coming decades as the growing prominence of small groups and individuals use new technologies, ideas, and relationships to their advantage.
Meanwhile, states remain highly relevant. China and Russia will be emboldened, while regional aggressors and nonstate actors will see openings to pursue their interests. Uncertainty about the United States, an inward-looking West, and erosion of norms for conflict prevention and human rights will encourage China and Russia to check US influence. In doing so, their “gray zone” aggression and diverse forms of disruption will stay below the threshold of hot war but bring profound risks of miscalculation. Overconfidence that material strength can manage escalation will increase the risks of interstate conflict to levels not seen since the Cold War. Even if hot war is avoided, the current pattern of “international cooperation where we can get it”—such as on climate change—masks significant differences in values and interests among states and does little to curb assertions of dominance within regions. These trends are leading to a spheres of influence world.
Nor is the picture much better on the home front for many countries. While decades of global integration and advancing technology enriched the richest and lifted that billion out of poverty, mostly in Asia, it also hollowed out Western middle classes and stoked pushback against globalization. Migrant flows are greater now than in the past 70 years, raising the specter of drained welfare coffers and increased competition for jobs, and reinforcing nativist, anti-elite impulses. Slow growth plus technology-induced disruptions in job markets will threaten poverty reduction and drive tensions within countries in the years to come, fueling the very nationalism that contributes to tensions between countries.
Yet this dreary near future is hardly cast in stone. Whether the next five or 20 years are brighter—or darker—will turn on three choices: How will individuals, groups, and governments renegotiate their expectations of one another to create political order in an era of empowered individuals and rapidly changing economies? To what extent will major state powers, as well as individuals and groups, craft new patterns or architectures of international cooperation and competition? To what extent will governments, groups, and individuals prepare now for multifaceted global issues like climate change and transformative technologies?
Three stories or scenarios—”Islands,” “Orbits,” and “Communities“—explore how trends and choices of note might intersect to create different pathways to the future. These scenarios emphasize alternative responses to near-term volatility—at the national (Islands), regional (Orbits), and sub-state and transnational (Communities) levels.
Islands investigates a restructuring of the global economy that leads to long periods of slow or no growth, challenging both traditional models of economic prosperity and the presumption that globalization will continue to expand. The scenario emphasizes the challenges to governments in meeting societies’ demands for both economic and physical security as popular pushback to globalization increases, emerging technologies transform work and trade, and political instability grows. It underscores the choices governments will face in conditions that might tempt some to turn inward, reduce support for multilateral cooperation, and adopt protectionist policies, while others find ways to leverage new sources of economic growth and productivity.
Orbits explores a future of tensions created by competing major powers seeking their own spheres of influence while attempting to maintain stability at home. It examines how the trends of rising nationalism, changing conflict patterns, emerging disruptive technologies, and decreasing global cooperation might combine to increase the risk of interstate conflict. This scenario emphasizes the policy choices ahead for governments that would reinforce stability and peace or further exacerbate tensions. It features a nuclear weapon used in anger, which turns out to concentrate global minds so that it does not happen again.
Communities shows how growing public expectations but diminishing capacity of national governments open space for local governments and private actors, challenging traditional assumptions about what governing means. Information technology remains the key enabler, and companies, advocacy groups, charities, and local governments prove nimbler than national governments in delivering services to sway populations in support of their agendas. Most national governments resist, but others cede some power to emerging networks. Everywhere, from the Middle East to Russia, control is harder.
As the paradox of progress implies, the same trends generating near-term risks also can create opportunities for better outcomes over the long term. If the world were fortunate enough to be able to take advantage of these opportunities, the future would be more benign than our three scenarios suggest. In the emerging global landscape, rife with surprise and discontinuity, the states and organizations most able to exploit such opportunities will be those that are resilient, enabling them to adapt to changing conditions, persevere in the face of unexpected adversity, and take actions to recover quickly. They will invest in infrastructure, knowledge, and relationships that allow them to manage shock—whether economic, environmental, societal, or cyber.
Similarly, the most resilient societies will likely be those that unleash and embrace the full potential of all individuals—whether women and minorities or those battered by recent economic and technological trends. They will be moving with, rather than against, historical currents, making use of the ever- expanding scope of human skill to shape the future. In all societies, even in the bleakest circumstances, there will be those who choose to improve the welfare, happiness, and security of others—employing transformative technologies to do so at scale. While the opposite will be true as well—destructive forces will be empowered as never before— the central puzzle before governments and societies is how to blend individual, collective, and national endowments in a way that yields sustainable security, prosperity, and hope…..The incoming Donald Trump administration faces a world of greater risk of conflict, slower growth and more anti-democratic pressures than ever since the Cold War, a new US intelligence report released early this week, said.

US leadership is ebbing amid shifts in economic, political and technological power, deep changes in the global landscape “that portend a dark and difficult near future,” according to the National Intelligence Council’s “Global Trends: Paradox of Progress” report.

“The next five years will see rising tensions within and between countries,” said the report.

“For better or worse, the emerging global landscape is drawing to a close an era of American dominance following the Cold War.”

The National Intelligence Council, a research group under the Office of the Director of National Intelligence, issues its global assessment every four years, and the new one came 11 days before Trump is inaugurated as president.

It painted a gloomy picture of the challenges pulling at the post-World War II global order, including extreme income disparities, technological dislocation, demographic shifts, the impacts of global warming, and intensifying communal conflicts.

Moreover, Western democracies will find it harder and harder to stick to their principles and avoid being pulled apart from each other, according to the study.

“It will be much harder to cooperate internationally and govern in ways publics expect,” it said.

More countries will be able to “veto” cooperative efforts and the myriad channels of global communication will leave large numbers and groups of people misinformed and divided, the report said.

“Information ‘echo chambers’ will reinforce countless competing realities.”

The report, whose authors comprise analysts from the intelligence and academic communities, also says that the liberalism that defined the West and allies after World War II is under threat from populism on both the right and left, as governing countries and societies gets harder.

“Publics will demand governments deliver security and prosperity, but flat revenues, distrust, polarisation and a growing list of emerging issues will hamper government performance.”

Those trends underscore the need for Washington to shore up traditional Western alliances and friendships as Russia and China test their resolve to preserve their influence, it said.

Yet the report warned US leaders not to be tempted to try to resuscitate the kind of Pax Americana, the policy of US-imposed global peace, which steered the global order from the 1950s.

“It will be tempting to impose order on this apparent chaos, but that ultimately would be too costly in the short run and would fail in the long run,” eroding US political strength.

Ongoing wars in the Middle East, including the war in Syria, have caused the biggest humanitarian and refugee crises since World War II.

Meanwhile, the rise of populism is empowering right wing political parties across Europe and has led to Britain’s exit from the EU and Trump’s election in the United States.


These global trends, challenging governance and changing the nature of power, will drive major consequences over the next five years. They will raise tensions across all regions and types of governments, both within and between countries. These near-term conditions will contribute to the expanding threat from terrorism and leave the future of international order in the balance.
Within countries, tensions are rising because citizens are raising basic questions about what they can expect from their governments in a constantly changing world. Publics are pushing governments to provide peace and prosperity more broadly and reliably at home when what happens abroad is increasingly shaping those conditions.
In turn, these dynamics are increasing tensions between countries—heightening the risk of interstate conflict during the next five years. A hobbled Europe, uncertainty about America’s role in the world, and weakened norms for conflict-prevention and human rights create openings for China and Russia. The combination will also embolden regional and nonstate aggressors—breathing new life into regional rivalries, such as between Riyadh and Tehran, Islamabad and New Delhi, and on the Korean Peninsula. Governance shortfalls also will drive threat perceptions and insecurity in countries such as Pakistan and North Korea.
Economic interdependence among major powers remains a check on aggressive behavior but might be insufficient in itself to prevent a future conflict. Major and middle powers alike will search for ways to reduce the types of interdependence that leaves them vulnerable to economic coercion and financial sanctions, potentially providing them more freedom of action to aggressively pursue their interests.
Meanwhile, the threat from terrorism is likely to expand as the ability of states, groups, and individuals to impose harm diversifies. The net effect of rising tensions within and between countries—and the growing threat from terrorism—will be greater global disorder and considerable questions about the rules, institutions, and distribution of power in the international system.
Europe. Europe’s sharpening tensions and doubts about its future cohesion stem from institutions mismatched to its economic and security challenges. EU institutions set monetary policy for Eurozone states, but state capitals retain fiscal and security responsibilities—leaving poorer members saddled with debt and diminished growth prospects and each state determining its own approach to security. Public frustration with immigration, slow growth, and unemployment will fuel nativism and a preference for national solutions to continental problems.
Outlook: Europe is likely to face additional shocks—banks remain unevenly capitalized and regulated, migration within and into Europe will continue, and Brexit will encourage regional and separatist movements in other European countries. Europe’s aging population will undermine economic output, shift consumption toward services—like health care—and away from goods and investment. A shortage of younger workers will reduce tax revenues, fueling debates over immigration to bolster the workforce. The EU’s future will hinge on its ability to reform its institutions, create jobs and growth, restore trust in elites, and address public concerns that immigration will radically alter national cultures.
United States. The next five years will test US resilience. As in Europe, tough economic times have brought out societal and class divisions. Stagnant wages and rising income inequality are fueling doubts about global economic integration and the “American Dream” of upward mobility. The share of American men age 25- 54 not seeking work is at the highest level since the Great Depression. Median incomes rose by 5 percent in 2015, however, and there are signs of renewal in some communities where real estate is affordable, returns on foreign and domestic investment are high, leveraging of immigrant talent is the norm, and expectations of federal assistance are low, according to contemporary observers.
Outlook: Despite signs of economic improvement, challenges will be significant, with public trust in leaders and institutions sagging, politics highly polarized, and government revenue constrained by modest growth and rising entitlement outlays. Moreover, advances in robotics and artificial intelligence are likely to further disrupt labor markets. Meanwhile, uncertainty is high around the world regarding Washington’s global leadership role. The United States has rebounded from troubled times before, however, such as when the period of angst in the 1970s was followed by a stronger economic recovery and global role in the world. Innovation at the state and local level, flexible financial markets, tolerance for risk-taking, and a demographic profile more balanced than most large countries offer upside potential. Finally, America is distinct because it was founded on an inclusive ideal—the pursuit of life, liberty, and happiness for all, however imperfectly realized—rather than a race or ethnicity. This legacy remains a critical advantage for managing divisions.
Central and South America. Although state weakness and drug trafficking have and will continue to beset Central America, South America has been more stable than most regions of the world and has had many democratic advances—including recovery from populist waves from the right and the left. However, government efforts to provide greater economic and social stability are running up against budget and debt constraints. Weakened international demand for commodities has slowed growth. The expectations associated with new entrants to the middle class will strain public coffers, fuel political discontent, and possibly jeopardize the region’s significant progress against poverty and inequality. Activist civil society organizations are likely to fuel social tensions by increasing awareness of elite corruption, inadequate infrastructure, and mismanagement. Some incumbents facing possible rejection by their publics are seeking to protect their power, which could lead to a period of intense political competition and democratic backsliding in some countries. Violence is particularly rampant in northern Central America, as gangs and organized criminal groups have undermined basic governance by regimes that lack capacity to provide many basic public goods and services.
Outlook: Central and South America are likely to see more frequent changes in governments that are mismanaging the economy and beleaguered by widespread corruption. Leftist administrations already have lost power in places like Argentina, Guatemala, and Peru and are on the defensive in Venezuela, although new leaders will not have much time to show they can improve conditions. The success or failure of Mexico’s high-profile reforms might affect the willingness of other countries in the region to take similar political risks. The OECD accession process may be an opportunity—and incentive— for some countries to improve economic policies in a region with fairly balanced age demographics, significant energy resources, and well-established economic links to Asia, Europe, and the United States.
An Inward West? Among the industrial democracies of North America, Europe, Japan, South Korea, and Australia, leaders will search for ways to restore a sense of middle class wellbeing while some attempt to temper populist and nativist impulses. The result could be a more inwardly focused West than we have experienced in decades, which will seek to avoid costly foreign adventures while experimenting with domestic schemes to address fiscal limits, demographic problems, and wealth concentrations. This inward view will be far more pronounced in the European Union, which is absorbed by questions of EU governance and domestic challenges, than elsewhere.
The European Union’s internal divisions, demographic woes, and moribund economic performance threaten its own status as a global player. For the coming five years at least, the need to restructure European relations in light of the UK’s decision to leave the EU will undermine the region’s international clout and could weaken transatlantic cooperation, while anti-immigration sentiments among the region’s populations will undermine domestic political support for Europe’s political leaders.
Questions about the United States’ role in the world center on what the country can afford and what its public will support in backing allies, managing conflict, and overcoming its own divisions. Foreign publics and governments will be watching Washington for signs of compromise and cooperation, focusing especially on global trade, tax reform, workforce preparedness for advanced technologies, race relations, and its openness to experimentation at the state and local levels. Lack of domestic progress would signal a shift toward retrenchment, a weaker middle class, and potentially further global drift into disorder and regional spheres of influence. Yet, America’s capital, both human and security, is immense. Much of the world’s best talent seeks to live and work in the United States, and domestic and global hope for a competent and constructive foreign policy remain high.
China. China faces a daunting test—with its political stability in the balance. After three decades of historic economic growth and social change, Beijing, amid slower growth and the aftereffects of a debt binge, is transitioning from an investment-driven, export-based economy to one fueled by domestic consumption. Satisfying the demands of its new middle classes for clean air, affordable houses, improved services, and continued opportunities will be essential for the government to maintain legitimacy and political order. President Xi’s consolidation of power could threaten an established system of stable succession, while Chinese nationalism—a force Beijing occasionally encourages for support when facing foreign friction—may prove hard to control.
Outlook: Beijing probably has ample resources to prop up growth while efforts to spur private consumption take hold. Nonetheless, the more it “doubles down” on state owned enterprises (SOEs) in the economy, the more it will be at greater risk of financial shocks that cast doubt on its ability to manage the economy. Automation and competition from lowcost producers elsewhere in Asia and even Africa will put pressure on wages for unskilled workers. The country’s rapidly shrinking working-age population will act as a strong headwind to growth.
Russia. Russia’s aspires to restore its great power status through nationalism, military modernization, nuclear saber rattling, and foreign engagements abroad. Yet, at home, it faces increasing constraints as its stagnant economy heads into a third consecutive year of recession. Moscow prizes stability and order, offering Russians security at the expense of personal freedoms and pluralism. Moscow’s ability to retain a role on the global stage—even through disruption—has also become a source of regime power and popularity at home. Russian nationalism features strongly in this story, with

Imagining a surprise news headline in 2021…
“Gig Workers” Riot in London and New York
September 17, 2021 – London
The Gig Workers Movement (GWM), representing the growing number of independent, temporary workers, organized violent protests and denial of service cyberattacks on major companies in London and New York to protest poor pay, job uncertainty, and a lack of benefits. Movement leaders warned they would stage more disruptive protests unless they received stronger social support for basic food and housing supplemental programs. The cyber-attacks leveraged millions of compromised Internet-connected devices and overwhelmed the targeted companies’ information systems.

President Putin praising Russian culture as the last bulwark of conservative Christian values against the decadence of Europe and the tide of multiculturalism. Putin is personally popular, but approval ratings of 35 percent for the ruling party reflect public impatience with deteriorating quality of life conditions and abuse of power.
Outlook: If the Kremlin’s tactics falter, Russia will become vulnerable to domestic instability driven by dissatisfied elites— even as a decline in status suggests more aggressive international action. Russia’s demographic picture has improved somewhat since the 1990s but remains bleak. Life expectancy among males is the lowest of the industrial world, and its population will continue to decline. The longer Moscow delays diversifying its economy, the more the government will stoke nationalism and sacrifice personal freedoms and pluralism to maintain control.
An Increasingly Assertive China and Russia. Beijing and Moscow will seek to lock in temporary competitive advantages and to right what they charge are historical wrongs before economic and demographic headwinds further slow their material progress and the West regains its footing. Both China and Russia maintain worldviews in which they are rightfully dominant in their regions and able to shape regional politics and economics to suit their security and material interests. Both have moved aggressively in recent years to exert greater influence in their regions, to contest the US geopolitically, and to force Washington to accept exclusionary regional spheres of influence—a situation that the United States has historically opposed. For example, China views the continuing presence of the US Navy in the Western Pacific, the centrality of US alliances in the region, and US protection of Taiwan as outdated and representative of the continuation of China’s “100 years of humiliation.”
Recent Sino-Russian cooperation has been tactical, however, and is likely to return to competition if Beijing jeopardizes Russian interests in Central Asia and as Beijing enjoys more options for cheap energy supply beyond Russia. Moreover, it is not clear whether there is a mutually acceptable border between what China and Russia consider their natural spheres of influence. Meanwhile, India’s growing economic power and profile in the region will further complicate these calculations, as New Delhi navigates relations with Beijing, Moscow, and Washington to protect its own expanding interests.

Imagining a surprise news headline in 2019…
China Buys Uninhabited Fijian Island To Build Military Base
February 3, 2019 – Beijing
A Chinese development firm—with links to the Chinese Government and People’s Liberation Army— today announced that it recently purchased the uninhabited Cobia Island from the Government of Fiji for $850 million. Western security analysts assess that China plans to use the island to build a permanent military base in the South Pacific, 3,150 miles southwest of Hawaii.

Russian assertiveness will harden anti-Russian views in the Baltics and other parts of Europe, escalating the risk of conflict. Russia will seek, and sometimes feign, international cooperation, while openly challenging norms and rules it perceives as counter to its interests and providing support for leaders of fellow “managed democracies” that encourage resistance to American policies and preferences. Moscow has little stake in the rules of the global economy and can be counted on to take actions that weaken US and European institutional advantages. Moscow will test NATO and European resolve, seeking to undermine Western credibility; it will try to exploit splits between Europe’s north and south and east and west, and to drive a wedge between the United States and the EU.
Similarly, Moscow will become more active in the Middle East and those parts of the world in which it believes it can check US influence. Finally, Russia will remain committed to nuclear weapons as a deterrent and as a counter to stronger conventional military forces, as well as its ticket to superpower status. Russian military doctrine purportedly includes the limited use of nuclear weapons in a situation where Russia’s vital interests are at stake to “deescalate” a conflict by demonstrating that continued conventional conflict risks escalating the crisis to a large scale nuclear exchange.
In Northeast Asia, growing tensions around the Korean Peninsula are likely, with the possibility of serious confrontation in the coming years. Kim Jong Un is consolidating his grip on power through a combination of patronage and terror and is doubling down on his nuclear and missile programs, developing long-range missiles that may soon threaten the continental United States. Beijing, Seoul, Tokyo, and Washington have a common incentive to manage security risks in Northeast Asia, but a history of warfare and occupation along with current mutual distrust makes cooperation difficult. Continued North Korean provocations, including additional nuclear and missile tests, might worsen stability in the region and prompt neighboring countries to take actions, sometimes unilaterally, to protect their security interests.
Competing Views on Instability
China and Russia portray global disorder as resulting from a Western plot to push what they see as self-serving American concepts and values of freedom to every corner of the planet. Western governments see instability as an underlying condition worsened by the end of the Cold War and incomplete political and economic development. Concerns over weak and fragile states rose more than a generation ago because of beliefs about the externalities they produce— whether disease, refugees, or terrorists in some instances. The growing interconnectedness of the planet, however, makes isolation from the global periphery an illusion, and the rise of human rights norms makes state violence against a governed population an unacceptable option. One consequence of post-Cold War disengagement by the United States and the then-USSR, was a loss of external support for strongmen politics, militaries, and security forces who are no longer able to bargain for patronage. Also working against coercive governments are increased demands for responsive and participatory governance by citizens no longer poor due to the unprecedented scale and speed of economic development in the nonindustrial world. Where political and economic development occurred roughly in tandem or quick succession, modernization and individual empowerment have reinforced political stability. Where economic development outpaced or occurred without political changes—such as in much of the Arab world and the rest of Africa and South Asia—instability ensued. China has been a notable exception. The provision of public goods there so far has bolstered political order but a campaign against corruption is now generating increasing uncertainty and popular protests have grown during the past 15 years. Russia is the other major exception—economic growth—largely the result of high energy and commodity prices—helped solve the disorder of the Yeltsin years.
US experience in Iraq and Afghanistan has shown that coercion and infusions of money cannot overcome state weakness. Rather, building a stable political order requires inclusiveness, cooperation among elites, and a state administration that can both control the military and provide public services. This has proved more difficult than expected to provide.

  • Kim is determined to secure international recognition of the North as a nucleararmed state, for the purposes of security, prestige, and political legitimacy. Unlike his father and grandfather, he has signaled little interest in participating in talks on denuclearization. He codified the North’s nuclear status in the party constitution in 2012 and reaffirmed it during the Party Congress in 2016.
  • Beijing faces a continuing strategic conundrum about the North. Pyongyang’s behavior both undermines China’s claim that the US military presence in the region is anachronistic and demonstrates Beijing’s lack of influence—or perhaps lack of political will to exert influence—over its neighbor and client. North Korean behavior leads to tightening US alliances, more assertive behavior by US allies, and, on occasion, greater cooperation between those allies themselves—and may lead to a shift in Beijing’s approach to North Korea over time.
  • The decisions before Seoul and Tokyo are significant as well, with both focused intently on maintaining the US security umbrella while improving their own security capabilities.


Political upheaval will characterize the next five years in the Middle East and North Africa, as populations demand more from entrenched elites and civil and proxy wars are likely to continue in a number of failed states. Contests among religious and political forces are likely as low energy prices weaken institutions. Such contests are likely to include security competition among Iran, Saudi Arabia, Turkey, Israel, and perhaps Egypt, and could involve China, Russia, and the United States. The endemic leadership and elite disconnect from the masses will almost certainly persist for many countries in the region through the period. Socioeconomic and popular challenges will worsen and tension rooted in the region’s legacies of authoritarian rule, repression, and dependency could stoke calls by subnational groups, particularly the Kurds, for greater representation.

  • The central challenge for the region is to boost growth and create political conditions and economic opportunities to engage its young working-age residents. If this is not done in ways that recognize the potential of people and are consistent with traditional beliefs, however, the absence of justice and respect will continue to foster despair and maltreatment of others. In extreme cases, the absence of dignity can contribute to religious radicalization, often in tandem with the rise of secularism, which the Arab world experiences through globalization, Western foreign policies, and social media that conservative religious believers find offensive.

The turmoil of recent years has interrupted what had been a period of significant progress in poverty reduction and individual empowerment. Extreme poverty in the region has declined gradually since 1987, with the greatest progress in Algeria, Jordan, Morocco, and Egypt. The share of the population living below the poverty line in Egypt, for example, declined from 12 percent in 1981 to only 2 percent in 2005, although upheaval undoubtedly has halted—or even reversed—this progress in the most affected countries. Similarly, Iran since 1979 has reduced poverty and expanded its middle class and literacy rates. Absent outside assistance, countries that have been less volatile but have large refugee populations, particularly Lebanon and Jordan, probably also will see this improving trend begin to reverse as refugees strain already limited economic resources and continue to overwhelm health care systems. Meanwhile, low oil prices are squeezing the budgets and economies of the Gulf countries, limiting their ability to bail out strategically critical countries like Egypt or to offer aid to others.

  • The region has not been conducive to much self-generated growth, with revolutionary and counterrevolutionary dynamics in Egypt; civil wars in Iraq, Libya, Syria, and Yemen; and the persistent Israeli-Palestinian conflict—all of which have undercut any efforts to provide meaningful political and economic opportunity.
  • The usual tool in the region for managing public discontent—subsidies and other cash payouts, funded by hydrocarbons and foreign assistance—is faltering with oil prices well below pre-2014 levels and unlikely to recover. After nearly a decade of capital surpluses—at least some of which found its way to non-oil states through aid—and strong investment and remittance flows, the region will see a distinct capital shortfall. The richer oil states of the Gulf Cooperation Council (GCC) will draw on their reserves to sustain domestic spending but will have less to share. Middle-level producers like Algeria and Iraq will struggle to continue buying social peace, increasing the risk they will resort to crackdowns on dissent. Egypt, Jordan, Lebanon, and Tunisia will see less Gulf largesse, worsening the economic conditions and increasing the risk of instability in these countries. The non-Arab, non-oil states of Israel and Turkey could escape these pressures, but neither has a large enough economy nor sufficient regional ties to be a major source of regional growth.

In the next five years, states’ failures to meet popular demands for security, education, and employment will continue to provide fertile ground for violent radicalization. Support for illiberal religious and sectarian elements could expand in popularity, reducing historic tolerance of minority groups and preparing the ground for a violent push to create a more homogenous region. Alternatively, the actions of extremists still could discredit radicalism and encourage more citizens to rally around state institutions.

  • Civil conflict and lower oil revenue are stressing governance structures in the region, resulting in a decline in overall governance and service provision. Prolonged periods of conflict are also taking a toll on institutions: from 2004 to 2014—with civil war and regime change in Iraq, Syria, Yemen, and Libya—regional states’ scores on the World Bank’s Governance Indicators declined in the key areas of voice and accountability, political stability and absence of violence, government effectiveness, the rule of law, and control of corruption.
  • In light of these shortcomings of central governance, individuals and tribes are likely to play a larger role in political debate, organizing and mobilizing at a subnational level. The creation of local and municipal councils in the war-torn states of Syria and Libya may exemplify this trend.

Geopolitical Relevance of Region in Next Five Years: Contagion and Competition. Progress toward a regional security framework is likely to be limited at best, with large-scale violence, civil wars, authority vacuums, and humanitarian crises persisting for many years. Similarly, the region will be shaped by state and non-state actors who seek political and strategic advantage for their own versions of religion but also work to manipulate the views and behavior of wider circles of believers.

  • The intensity of violence in the Levant and the Arabian Peninsula threatens to further fragment the region—creating distinct political and economic conditions in the Gulf, Levant, and Maghreb regions—and to spread contagion well into Sub-Saharan Africa, Europe, and Central, East, and South Asia via transnational radical Islamist ideas and movements.
  • The area is especially vulnerable to water stresses and local, national, and transnational tension over access to water resources. Even the wealthiest countries in the region, which use desalinization plants for water supplies, face existential vulnerabilities if those plants are compromised.

The region’s ills are unlikely to be contained, ensuring that growing humanitarian crises and civilian victimization will continue to undermine international conflict and human rights norms. Heavy touting of these norms by the West without sufficient backing or material support further weakens the West in the eyes of Arab publics. Perceptions in the region’s capitals that the United States is not a reliable partner—whether due to the US pivot to Asia or Washington’s decision not to support Mubarak and other Arab incumbents in 2011—has opened the door to geopolitical competition with Russia and possibly China and to hedging by Arab states regarding commitments to Washington. Amid persistent conflict, refugee flows will persist—although some may be forced to seek destinations other than increasingly inhospitable Europe.

Iran, Israel, Saudi Arabia, and possibly Turkey may remain powerful and influential relative to states in the region that are grappling with instability but they will be at odds with each other on a variety of issues, and several face looming domestic challenges that are likely to affect their regional aspirations. Iran’s growing power, nuclear capabilities, and aggressive behavior will remain a concern for Israel, Saudi Arabia, and some other GCC states. These concerns are exacerbated by the sectarian nature of Iranian and Saudi regional competition, with dehumanizing rhetoric and allegations of heresy fanning the conflict throughout the region.

  • Risks of instability in Arab states such as Egypt, Algeria, and Saudi Arabia will almost certainly grow in the long term, especially if the price of oil remains low. Riyadh is embarking on some economic reforms and much smaller social and political reforms. These efforts are significant and could increase job creation for Saudi youth but could also come too late to satisfy popular expectations. Moreover, the reforms are aimed at developing a Saudi Arabia that can compete with emerging Asian and African exporters as a low-cost option, or with developed countries in services, and will prove exceedingly difficult to meet. Lack of clarity about a Saudi transition after King Salman will also contribute to uncertainty about the prospects for the reform effort.
  • Global demand for the region’s energy resources—especially from Asian states—will continue to ensure international interest and engagement in the region, but external powers will lack the will or capability to “fix” the region’s numerous problems, and some will be drawn into its fights, probably protracting current and future conflicts.
  • Israel, Saudi Arabia, and some other GCC states are concerned that Iran will use funds from the Joint Comprehensive Plan of Action (JCPOA) to increase regional activities that will further erode regional stability. In the long term, these states also will be sensitive to Iran’s behavior as restrictions on Iranian nuclear activity are lifted under the JCPOA process. Tension between Iran and regional states will increase if Tehran uses its greater financial and military resources to aggressively assert its interests in the region or if Iran’s neighbors fear Tehran seeks to resume nuclear weapons work.
  • The return of great-power politics to the region, with renewed Russian engagement, will be another powerful force affecting future dynamics. Since coming to power in 2000, Russian President Putin has sought to project power into the region; Moscow’s military and intelligence support for Damascus may suggest overtures to other former Soviet allies, such as Iraq and Egypt, could be on the horizon.

Other Considerations. Demographic and economic pressure, as manifested in the ”Arab Spring” uprisings, probably will remain unresolved and could worsen if protracted turmoil fuels a major brain drain. Youth unemployment—certain to remain a challenge for years as a result of the region’s demographic profile—and the absence of economic diversification will further hinder economic growth, improved living standards, and integration into the global economy for most countries in the region. Land and water resources, already critically tight, are likely to get worse with urbanization, population growth, and climate change. Better management and sanctions relief have spurred Iranian economic growth, but whether economic improvement will help bring about political reform is less clear.

  • An emerging lost generation of conflict-scarred children without access to education or adequate healthcare probably will create new populations vulnerable to radicalization. Continued instability is likely to make conditions for women throughout the region even worse, judging by the increased harassment and victimization experienced in recent years. Specifically, weak economic growth and concern about employment can fuel the growth of identity-based extremism. Arab youth questioned in the eighth annual Burson-Marsteller survey in 2016 overwhelmingly rejected the rise of the so-called Islamic State but simultaneously noted that a lack of jobs and opportunities was the top recruitment driver for the group.
  • In light of these dynamics, reinvigorated interest in the fate of the West Bank and Gaza could emerge as a galvanizing force among Arab populations. Recent events—including the civil war in Syria and the rise of the Islamic State—that have dominated the media are also prompting additional Palestinian refugee movement and concern about shortfalls in financial support for the Palestinian people. Palestinian studies suggest Gaza residents still need $3.9 billion for reconstruction and recovery support as a result of the Hamas-Israel conflict in 2014. Their needs are of interest to the rest of the region’s Arab populations: In a poll conducted in 2011 by the Arab Centre for Research and Policy Studies, over 80 percent of more than 16,000 respondents across the Arab world noted that the Palestinian question was the cause of all Arabs, not of the Palestinians only.

Risks for environmental crises, such as drought, extreme temperatures, and pollution will also remain high. Land and water resources are already critically tight and are likely to get worse with urbanization and the effects of climate change.

  • In Yemen, conflict zones, high water prices, and damaged infrastructure have aggravated already grim water problems, leaving 80 percent of the population without access to reliable fresh-water sources. Without adequate infrastructure, water stored for domestic use can become contaminated and expand the breeding habitats for mosquitos, malaria, dengue fever, and cholera.
  • In Jordan, the influx of refugees from Syria has forced the government to pump more extensively from declining aquifers. Egypt will face emergent water challenges from upstream development on the Nile, particularly as Ethiopia begins filling the reservoir of the Grand Ethiopian Renaissance Dam.
  • Urban air pollution in the region remains among the worst in the world, particularly in Iran and Saudi Arabia.

Public health issues in the region will also be critical. Egypt is one of the countries in which the highly pathogenic avian influenza virus is now endemic in poultry and presents a risk to humans. Since 2012, Saudi Arabia has been handling an outbreak of the Middle East respiratory syndrome (MERS-coronavirus) and there is ongoing concern that the virus could mutate and become increasingly contagious. A more widespread outbreak could contribute to instability if handled poorly.

Nevertheless, despite these pressures, a low-probability, more beneficial scenario for the region might emerge if oil markets tighten and prices begin to rise. Leaders in Iran and Saudi Arabia would feel less pressure to focus on a zero-sum competition for oil market share, which could result in a lowering of their sectarian rhetoric. Better bilateral relations could defuse their proxy wars and help stabilize the region, potentially helping create the conditions for grassroots movements to offer a compelling and constructive alternative to authoritarianism or ISIL and Islamic extremism. A genuine public dialogue and economic development that is consistent with religious and other cultural norms could channel the frustrations that underlay the Arab uprisings of 2011.


aEstimates for religious affiliation are based on data from the World Religion Database and are rounded to the nearest one-tenth of a percent.

bTotal Fertility Rate is the projected average number of children born to a woman if she lives to the end of her childbearing years.

Note: Demographic data is presented for countries estimated to have the largest population in each region in 2035.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s