Title: Gordian Knots
1Gordian Knots Alexandrian SolutionsRegions -
CorporationsThe Future of Regionsin a
Perspective of Global ChangeSeminar organized
by Ministry of Regional Development
- Dr Krzysztof Rybinski
- Partner Emeritus, Ernst Young
- Warsaw, 10 June 2038
2Political cannibalism
- Easter Islands story
- We define political cannibalism as a situation,
when countries fail to reach broad consensus on
how to deal with important global problems and
they implement local tactics to maximize country
welfare in the short run - 2008 examples biofuels and agflation, responses
to agflation, global imbalances and credit crunch - Polish example of political cannibalism Polands
CAP support, energy sector restructuring
(blackouts)
3Last 30 years drama amid political cannibalism
- Countries failed to reach agreement of rising
food prices (recall failure of FAO conference in
Rome in June 2008), US, EU, Brasil continued to
expand biofuels, - EM demand for food and energy rose sharply
- Climate disasters
- All of that pushed food and energy prices, food
prices trippled by 2011, oil rose to 300 - Millions died in poor countries from famine,
millions were relocated, drive and kill the
poor attitude prevailed - In 2014 world slumped into 4-year long recession,
this period is called today the Dark Teens, also
because energy shortages caused massive
black-outs around the globe
4We did know it was coming, did we not
- Take a look at some forecasts made 30 years ago,
in 2008
5In a book published exactly 30 years ago authors
warned that
6Scarce energy and climate
- Production of traditional sources of energy will
peak before 2020 - With oil prices rising there is an increased
tendency to use coal, which clashed with Kyoto
goals to reduce CO2 emissions - Clean technologies (CCS) are not ready, it will
take time - EU should be prepared to face serious energy
crisis, energy wars should not be excluded - Vision, strategy, full commitment of all
stakeholders and innovation in a must (recall IEA
report published on 6 June 2008) - Without changing world governance progress on the
climate front will be too slow to matter
7Scarce energy and climate
GDP produced per unit of energy, world average
and regions
- Current pace of increasing energy efficiency is
not enough - According to IEA US will become more efficient
but the growth effect will make its CO2 emissions
stable - China, Asia and later Africa will increase
emissions - Europe should make its energy efficiency
technology available to emerging markets (who
will pay?)
8Climate
- Debate about CO2 mechanisms in Europe (world)
should be redirected from CO2 production to CO2
consumption, or more broadly to human ecological
footprint deficit - CO2 mechanism should not be used as a tax on
less developed countries, it should be fair and
designed to reach Kyoto objectives
9Climate disasters as daily life
- Countries and regions should be prepared to deal
with climate disasters (sudden shocks as well as
slowly moving deterministic trends) - Today floods and tornadoes in Europe are daily
life, water is rationed in many places
10Population 1950, 2005 and 2050
Source UN demographic forecasts
11Aging and migration
Number of children per woman Number of children per woman Number of children per woman Number of children per woman Number of children per woman
1950-1955 1975-1980 2000-2005 2020-2025 2045-2050
World 5.0 3.9 2.7 2.3 2.0
Africa 6.8 6.6 5.0 3.6 2.5
Middle East 6.5 5.0 3.2 2.3 2.0
India 5.9 4.9 3.1 2.0 1.9
China 6.2 3.3 1.7 1.9 1.9
L A C 5.9 4.5 2.5 2.0 1.9
Oceania 3.9 2.7 2.4 2.1 1.9
Eastern Europe 2.9 2.1 1.3 1.4 1.7
EU-15 2.5 1.9 1.6 1.7 1.8
United States 3.5 1.8 2.0 1.9 1.9
Japan 2.8 1.8 1.3 1.4 1.6
12Aging and migration
- Aging will have dramatic (but slow-moving)
implications on productivity, savings, public
finances. It will also shift voting power from
young to old generation, which will stop reforms - Smart migration may be a good policy-choice to
deal with aging and falling share of active labor
13People waiting to cross the street Anytown,
Europe 2038
Source Cover of the World Bank report on
migrations
14Chindia China and .
Lethal competitor or .
Paper dragon
15Chindia China and India.
Will challenge western world firms
or will remain in its historical puppet role
16Already 30 yeards ago Chindia we biggest
contributors to world growth
Source WEO, IMF, Oct 2007
17History
Source EC Globalisation Trends, Issues and
Macro Implications for the EU, Economic Papers,
July 2006
18But western politicians kept saying
19Chindia will make mistakes and will fail
20Very fast changes !!!
Source EC Globalisation Trends, Issues and
Macro Implications for the EU, Economic Papers,
July 2006
21Asia financial power
FX reserves and SWFs, Q4 2007
IPOs
China 1600
Japan 1000
UAE 900
Norway 400
Saudi Ar. 350
Singapore 330
Kuwait 250
PIMCO 693
CalPERS 247
22Politicians also failed to note China IC
development
Patent filings by office in 2005 in thousands
Data for EU-15 are the sum of patent filings
from national patent offices and the European
Patent Office. According to WIPO, EPO patent
filings in 2005 amounted to 60.8 thousands. The
total number of patent filings for EU-15 may be
overstated as the EPO grants patents on behalf of
the member states of the European Patent
Convention (EPC), the membership of which is
larger than that of the European Union because
some EPC member states are not members of the
European Union. Furthermore many European patent
applicants seek patent protection in multiple EPC
member States, therefore, non-resident patent
filings by Europeans in other EPC member State
offices and at the EPO have become common. For
the same reasons the total number of patent
filings for CEE-4 may be underrated. Data for
Italy are not available. Latin America-6
includes Brazil, Chile, Colombia, Cuba, Ecuador
and Peru. Source World Intellectual Property
Organization.
23China was banned from participation in global
governance
- IMF vote share, selected countries
- USA 16.77
- Germany - 5.88, France - 4.86, Italy 3.19
- Netherlands 2.34, Belgium 2.09
- China 3.66
- India 1.89
24Recall some facts
- In 2007 54 of places on top100 Shanghai list of
best universities were occupied by US schools,
they took 8 top places - In 2038 more than 50 of top100 places are
occupied by Asian universities, which offer
highest wages and best research environment - In 2010 PBoC funded an annual Thought Leadership
Prize worth 100m renminbi (more 20m at 2010
exchange rate), also called 21st century Nobel
Prize, for disruptive innovation - Since 2024 this prize has been awarded each year
to research teams based in Asia
25World in 2038
- In 1999 there were 7 Americans on Forbes 10
richest men list - Already in 2007 there were 4 from India, one from
Mexico and Russia, and only 2 Americans and 2
Europeans - In 2038 first 20 places on baidu.cn list (which
took over Forbes in mid 2020s) are occupied by
businessmen from China, India, Russia, Brasil,
Mexico and Arab countries - Fortune 500 list begins today with a very well
known names such as Hunlan, Dongfeng, Huawei,
Geely, Lenovo, Mahindra, Satyam, Tata, Wipro,
Baidu - It seems hard to believe today that 30 years ago
best known brands were Coca Cola, GE, Microsoft
or Google
26Europe in 2038
- EU has been renamed West-European Union after
only six contries reamained - WEU growth in the last 10 years was only 0.3,
quality of life has deteriarated in many reigions - Euro is still official WEU currency, but its
share in global reserves fell to 4 from 25 30
years ago
27Lazy, social, but innovative Europe was able to
face the charging dragon, but it failed to take
right steps 30 years ago
28It failed to create EU vision 2050
- EU - world brain
- Strategic priorities
- EU as the most intelligent part of the world
- EU as the headquarters of global corporations
- EU as a place where creative minds from South and
North meet to live, study, work and enjoy life
29It failed to invite BRICs to strategic
decision-making
- IMF lost global mandate
- Asian-African Monetary Fund was established,
Asia-Africa became the new axis of power
(populated by 7 out of 9 billion people on Earth) - TAFTA was created too late and had too little
impact - The proposal to form Global Strategic Council in
2010 was rejected by rich countries
30Europe 2038, a failed state
- Energy shortages
- Water problems
- Climate disasters
- Huge gettos of migrants, social unrest
- Huge old population, very poorly taken care of
amid funding shortages
31- Today we know the mistakes we made, some
predicted it might happen already 30 years ago - Politicians did not listen, they were stuck in
20th century thinking, unable to think beyond
4-year election cycles - Alexandrian solutions were rejected
- What a pity we cannot turn the clock back!