Key Themes for the Year to Come: What to Look Out For in 2020

At the beginning of each year the Sign of the Times presents a list of key themes and events for the next 12 months that have the potential to be catalysts or triggers for changes to shape our markets, world and lives. In previous years these have included India’s growth trajectory, the global fight against terrorism, the growing clash of world views, important geopolitical events and key trends in science and technology. For each theme the Sign of the Times tried to paint divergent scenarios as to how these themes might play out; while in some cases events have played out as per our forecasts, in others, while the trend line was often sound, events have played out differently.

This year, as we enter into a new decade, the Sign focuses on what 2020 may bring, on key themes that not only are important for the year ahead but have the potential to shape the world for years to come and potentially a decade more. Normally one would see the presentation of extreme alternatives as a stylistic technique, however, recent years suggest that the extremes are the actual alternatives.

1. The US Presidential Election

   Background.President Trump will face off against one of several potential Democratic nominees in the US Presidential election, in a hyper-polarised political environment which will be further exacerbated by his recent impeachment by the House (and likely upcoming acquittal in the Senate ‘trial’) along partisan lines.

   Key Dates.The presumptive Democratic nominee will likely emerge by mid-March following the ‘Super Tuesday’ primaries (on 3rd March); with the focus shifting to the head-to-head contest over the summer with party conventions in July-August, leading up to the debates in September-October and the election on 3rd November.

   The Competing Outcomes

   An Apparent Validation of Trump and ‘Trumpism’.A victorious Trump re-election campaign, even by the narrowest of margins, would serve as a presumptive validation of national populism in America and across the world, as well as Trump’s anti-immigration, anti-trade track record and unorthodox style of governing, rather than a rejection of the alternative democrat nomination.

   A Return to the Liberal World Order or a Potentially Radical Change in the US and World’s Trajectory.A victory for the Democrats, on the other hand, would serve as a repudiation of Trumpian politics and likely result in a sharp shift in domestic and foreign policy, with the Democrats immediately seeking to reverse several of Trump’s signature policy decisions. The nature and extent of this will of course depend in large part on who the Democrats choose as their nominee. On the one hand if it is a mainstream Democrat, it may well look like a return to business as usual; on the other hand, the election of a Democrat with a more radical social agenda may signal an entirely new path for all.

   Key Drivers and Considerations

   • President Trump’s job approval rating has held around 41-44%, with 51-55% disapproval through 2019, and he is currently trailing all the leading Democratic candidates in head-to-head polling averages by anywhere from 4% (in case of Pete Buttigieg) to 10% (in case of Joe Biden) . Notwithstanding the unreliability of polls particularly at this early stage of the election, it is clear that the President will need a significant shift in public opinion to narrow this gap, winning both the swing states in the Rust Belt that secured his 2016 election as well as halting the electoral erosion in the Sunbelt from the 2018 mid-term elections.
   • The currently ongoing impeachment proceedings, and the manner in which they are perceived – whether as an unfair partisan attack on the President, or as a genuine ‘high crime and misdemeanour’ which warrants removal from office – could have a significant impact on undecided and/or independent voters, as well as voter turnout of the respective bases.
   • The current Democratic field varies widely from moderate centrists to left of centre and socialist candidates. Which candidate eventually prevails in the primaries will have a significant impact on the party’s platform (and therefore the potential to both attract or alienate voters) as well as how it governs should it win.
   • A Trump victory would likely lead him to double down on his foreign and domestic policies and political tactics to consolidate power in the executive branch.

   Just as the 2016 election was foreshadowed by the result of the Brexit referendum, the 2020 US election may be foreshadowed by the UK's recently concluded general election. The parliamentary election in the UK was widely presented as a battle between an untrustworthy liar and a radical socialist seeking to burn down the system, and the country resoundingly rejected far-left socialism, preferring the lesser evil it knew despite the challenges it brought.

2. The US-China Trade War, and Others

   Background.The trade wars initiated by the US and now on-going among the US, China, EU and other major markets will enter a decisive phase in 2020 as these participants look to salvage trade deals to avoid further escalation, or risk potential recessions, with global growth having slowed to 3% in 2019 (from 4% the previous year) and a co-ordinated slowdown across virtually every major market, driven in large part by stagnating global trade.

   Key Dates.An interim ‘Phase One’ trade deal between the US and China has recently been announced with the US announcing a pause on new tariffs and a limited rollback of earlier tariffs .

   Note: A more comprehensive trade agreement is likely to be elusive given the current stage of the US elections. During this period, increased political uncertainty could potentially result in very extreme outcomes; both sudden escalation or abandoning the fight with a symbolic victory are possible. The result of the election in November will likely play a pivotal role in shaping the deal and the longer-term relationship between the two powers.

   The Competing Outcomes

   Tariff War Escalates and Spreads to Other Countries. The US continues to see China as its biggest strategic rival to global power and continues to raise the stakes, while China continues to retaliate; leading to a series of escalating shocks to the world economy which affect key partners around the world, with any pauses only during elections.

   A Comprehensive Trade Deal Leads to a Recovery in World Trade.A trade pact between the US and China followed by a lowering of tariffs, either before or after the US election, becomes a precursor to a return to a rules-based trade order and a recovery in global trade which is in everyone’s interests.

   Note: An important parallel track is the US’s trade disputes with allies and others. In one scenario, it continues running several trade wars concurrently, including with the EU, individual member states like France and Germany, and with others such as Argentina. In another, it follows conventional wisdom and works with its allies in particular to focus its efforts on subduing China. And in the case of trade peace, it returns to something closer to the previous rules-based order, perhaps with some focus on the WTO and its functioning.

   Key Drivers and Considerations

   • As the recently announced ‘Phase One’ trade deal indicates, both the US and China appear keen to avoid further escalation, however both sides need to be able to ‘show they got something’ as neither can afford to appear to have backed down. For President Trump, a face-saving deal is a political necessity as further economic shocks could undermine his chances of re-election. However, a more comprehensive accord to lower tariffs back to earlier levels seems unlikely.
   • The US has imposed various tariffs and trade restrictions on products like steel and aluminium which have impacted major markets including France, Germany, Argentina, South Korea, India and Mexico (among others) over the last year, signalling that President Trump intends to broaden the reach of his aim to re-negotiate the terms of trade beyond just China.
   • Assuming that Britain exits the European Union in early 2020 as currently expected based on the result of the election, that could further exacerbate trade tensions as President Trump, having supported the idea of breaking up the EU, can now choose how to treat the Us treatment of the UK as part of the plan to incentivise other EU members to leave the Union.

   Global agencies have sounded alarm around slowing global trade and growth, with global GDP growth estimates cut from 3.5% to 3.0% for 2020, largely due to slowing global trade . Several major markets, particularly those with ageing populations, are potentially facing a recession. 2020 therefore is likely to be a pivotal year in terms of defining the new trade paradigm and whether global trade and growth recovers, or resets to lower levels.

3. The Tokyo Summer Olympics

   Background.Japan will host the Summer Olympics in late-July and early-August for the second time in the games’ history. The last time it hosted the Olympics was in 1964 when Japan was a rapidly rising economic power. Today it is looking to redefine its role in the world as it copes with an ageing population

   Key Dates. The Olympic Games will be held from 24th July to 9th August.

   The Competing Outcomes

   An Opportunity for Japan to Host an Occasion for Unity. The Olympics have historically been a unique forum where nations compete, but also rise above politics and their political disputes. The symbolism of athletes whose countries may be at odds competing in sports rather than on a battlefield can be a powerful positive force showing unity, at a time when nations are increasingly divided politically, both within and among each other.

   Politics Overtakes the Games. At their worst though, the Olympics can also be exploited by leaders to try and drive their agendas and narratives. Historical disputes amongst the large east Asian countries (Japan, China, South Korea) have the potential to resurface, and already have in some of the planning for the games , as do disputes between the western powers and Russia (as the latter now faces a ban from the World Anti-Doping Agency).

   Key Drivers and Considerations

   • This will be the second of three consecutive Olympics to be held in Asia, starting with the 2018 Winter Olympics in PyeongChang, South Korea, and to be followed by the 2022 Winter Olympics in Beijing, China. The Olympics venues are now increasingly reflecting the broader global economic and geopolitical shift to Asia.
   • China’s success at the Beijing Olympics showcased the rise of a great power and the competition between its athletes reminiscent of the America-Soviet Union battles during the Cold War. China understands the importance of soft power and so these games are no doubt have soft power significance.
   • Russia was recently banned from the World Anti-Doping Agency from participating in any global sports competitions for the next four years including the Tokyo Olympics. Based on the sanctions, Russian athletes will still be able to compete in the games however will not be able to wear Russian uniforms or raise the Russian flag should they win, effectively competing under neutral uniforms.
   • Japan will host certain events in Fukushima, the site of the nuclear reactor meltdown in 2011 to showcase its recovery following the disaster and drive the local economy.

   China’s success at the Beijing Olympics showcased the rise of a great power and the competition between its athletes reminiscent of the America-Soviet Union battles during the Cold War. China understands the potential of soft power and so these games will no doubt have significance from the perspective of power rivalry.

4. The Mainstreaming of ‘Conscious Capitalism’

   Background.There is a growing global focus – by governments, businesses, investors, consumers – for businesses to operate more responsibly and sustainably, taking a wider view of their stakeholder ecosystem beyond shareholders to include their employees, suppliers, customers and the environment. This is likely to gather critical mass in 2020. This approach of ‘Conscious Capitalism’ has proven to deliver improved results and is gaining wider acceptance as businesses themselves cope with the impact of rising global inequality and environmental challenges.

   Key Dates. The UN has become the host for multiple initiatives to galvanise the shift to responsible or ‘conscious’ capitalism many of which are scheduled throughout the year.

   Note:The adoption of Conscious Capitalism has the makings of a long-term megatrend and so there is no single event which will necessarily trigger its widespread adoption; instead, these principles are being diffused gradually yet consistently through various global and micro forums including global conferences where practitioners share best practices and corporate boardroom discussions to shift strategy.

   The Competing Outcomes

   Capitalism Reformed for the 21st Century.

   There is growing acceptance across the world that capitalism’s role in income inequities is being challenged almost across the board, encompassing moderates as well as the far left and far right. The principles of Conscious Capitalism are being slowly but increasingly recognised as critical to long-term success in the modern knowledge economy, and leaders from business, civil society and politics are working together across multiple forums to evolve a new model which takes a broader view of a business’s stakeholders and invests in employees and communities in order to address the social and environmental challenges facing the world, while achieving better long-term success.

   A Passing Trend and a Return to Business-as-Usual. While there is a global trend of investors and business adopting principles of social responsibility and sustainability through various models (including implementing ‘ESG’ risk management systems, social impact investing, and others), there is a smaller possibility that this trend could be overtaken by more extreme issues that create incentives to retain the status quo; another global financial recession, the US-China trade war dislocating economic growth and particularly prices and employment or a large scale Middle East conflict. The other possibility is that for the mass of businesses, it becomes an audit requirement and is set at the lower common denominator and as such fails to make a significant impact on the underlying issues of capitalism or the global financial system.

   Key Drivers and Considerations

   • Earlier this year, the Business Roundtable, an influential association of CEOs of leading American companies, released a statement on the ‘Purpose of a Corporation’ indicating a shift from its historical focus on shareholder primacy towards a commitment to all stakeholders including customers, employees, suppliers and communities. The declaration was signed by 181 CEOs who committed to leading their firms towards the benefit of all stakeholders.
   • The asset management industry has seen the emergence of ESG-focused investment funds including mutual funds that invest only in responsible businesses, and market indices that track these firms. This signals a broader trend of large pools of capital shifting towards businesses which operate under these principles.
   • Funds managing near US$6tn of assets have stated their intention of reducing their exposure to fossil fuel investments by US$900bn over the next decade. Among these, the top three fund managers alone hold nearly US$300bn in fossil fuel investments, providing them with disproportionate industry influence

   The need for a reform of capitalism for the knowledge economy has gotten widespread acceptance over the last several years, with the diffusion of Conscious Capitalism practices getting more dispersed and institutionalised each year through a variety of mechanisms. With the US business community, which drives a large portion of the world economy, having recognised the importance of responsible and sustainable business in addressing the world’s biggest existential challenges, this trend appears to be accelerating.

5. Hong Kong Protests, Chinese Intervention

   Background.In response to the floating of a bill that would allow Hong Kong nationals to be extradited to mainland China, vociferous and often violent protests have rocked the city of Hong Kong since mid-2019. While the proposed bill has since been rolled back, protests in Hong Kong have continued and are expected to intensify over the course of the next year.

   Key Dates.Hong Kong’s protests and the government’s reactions thereto are not moving to a fixed timetable, with both sides apparently at a stalemate.

   Note:The protesters assume that if they back down now they will have lost the opportunity of all the trouble they have gone to, while the Beijing government, the ultimate arbiter in Hong Kong, assumes that any concessions will set a dangerous precedent with unforeseen consequences, both in Hong Kong and other parts of China. This stalemate is paralysing Hong Kong, which is struggling to fight economic headwinds that have seen GDP contract to 3.2% in the past quarter, further destabilising the status quo and raising the stakes for both parties to find a resolution.

   The Competing Outcomes

   China Intervenes to Quell Protests and Triggers ’Guerrilla War’. To date, the task of containing the protests in Hong Kong has been left to the city’s government and law and order establishment. The Chinese government has so far chosen not to directly intervene in the matter, but has indicated that this remains an option, particularly if the protests in Hong Kong continue to escalate. Given China’s somewhat heavy-handed track record of quelling domestic unrest, it is doubtful that any intervention will go smoothly, and given the increasing desperation of the protestors, could well result in further chaos and damage.

    

   China’s Government Finds a Win-Win with the Protestors. The list of demands by Hong Kong’s protestors has expanded to increase universal suffrage, immunity from arrest and an investigation into alleged police brutality. The Chinese government, perhaps wary of intervening with the use of physical force (after the events of Tiananmen Square) has already reversed its position on the extradition bill and could further accede to the Hong Kong protestors’ latest demands, finding a win-win based on extending the ‘One country, Two systems’ approach. However, this would be 180 degree turn in Beijing’s management of political unrest and may embolden protesters within the PRC itself unless a win-win is found.

6. The Global Fight Against Climate Change

   Background.It is widely accepted that climate change is indeed real and in 2019 it manifested itself in heat waves, flooding, unseasonal rains and bush fires. 2019 marks the end of the hottest decade in human history. Seven of the 10 hottest years on record took place between 2010 and 2019. 2020 represents a critical year, with scientists warning that greenhouse gas emissions must peak during the year (and not later) in order to avoid long-term damage.

   Key Dates. UN Climate Change Conference in November 2020

   The Competing Outcomes

   Major Global Economies Step Up to Reverse Recent Trends. Against the backdrop of increasingly irrefutable evidence and rising popular demands, major economies that have remained ambivalent towards the Paris Climate Change Agreement (like the US, Russia and Brazil) implement meaningful emissions targets and work to develop a tangible common action plan to tackle climate change.

   Global Apathy Towards Climate Change Continues. Against a backdrop of declining global multilateralism, global economies fail to do anything of consequence to combat climate change, either failing to set meaningful targets or failing to meet them. As such the 2020 UN Climate Change Conference at the end of the year could be a “damp squib” with no material actions undertaken or targeted by the global community, as more countries follow the lead of the US in withdrawing from the Paris Agreement, thereby hollowing out the efforts of those countries that remain in it.

   Key Drivers and Considerations

   • Climate change is arguably the most pressing challenge of our times. Natural disasters linked to this phenomenon have claimed thousands of lives in the past decade and will continue to do so if the issue remains unchecked.
   • Recent initiatives by large global corporations, the impassioned rhetoric of Greta Thunberg, a 16-year old Swedish climate change activist, and a growing chorus of pleas from global celebrities, has helped intensify the spotlight on the issue. However, the resulting actions to date are nowhere near sufficient to materially impact current climate change trends.
   • In addition to placing tremendous strain on the world’s resources, climate change could have an increasingly important impact on global conflict. In a recently conducted study published by Nature Magazine, it was determined that the risk of climate-induced violence around the world under a business-as-usual (no material reduction in emissions) scenario is fivefold higher as compared to the last century.
   • Major global economies – developed and emerging – will need to work together, accept greater accountability and set themselves more ambitious emissions reductions goals.

   The prize for successfully working to address the issue of climate change will not only help secure the futures of coming generations, but also help create a blueprint for future global collaboration on global issues; on the other hand, a failure to act now would represent one of the greatest global collective failures of our times and possibly push the world beyond the point of no return.

7. British Elections, Brexit Implications

   Background.The recently concluded General Election in the UK saw the Conservative Party, led by Prime Minister Boris Johnson, secure a significant majority. Buoyed by this result, Mr. Johnson has vowed to push through with Brexit by no later than January 31, 2020.

   Key Dates.Prime Minister Johnson has promised to have the UK leave the European Union by January 31, 2020.

   The Competing Outcomes

   UK Leaves the European Union but Co-operates. Given the undeniable evidence of potential economic loss to the country in the event of a ‘hard’ Brexit, Prime Minister Johnson may conclude that it is beneficial to leave the European Union (“EU”), but still maintain close ties with the latter. This could manifest itself in a ‘Norway’ or ETFA (membership in the European Free Trade Association, European Economic Areas and customs union) model, a Switzerland model (member of just the ETFA) or a Canada-style proposal (free trade deal with the EU). However, any such agreement would need to be a bespoke one for the UK only, since some members of the existing agreements have said they do not trust the British to play well once inside and to not renege at a later time.

   The UK Chooses to “Go It Alone”.Another alternative is that the UK deprioritises or fully eschews close collaboration with the EU, and instead chooses to purse independent global partnerships and agreements. This will likely result in the UK prioritising treaties with other countries that are heavyweights in political and economic clout such as the US and China, hoping to get a better deal from there.

   Key Drivers and Considerations

   • Over the last four year, the UK has lost enormous credibility with the world in how it has handled Brexit to date and how its leaders misled its people. While the nation continues to attract significant economic and human capital, the manner in which it now formally exits the EU will be critical in determining the UK’s place post Brexit.
   • A ‘soft’ Brexit that results in the UK making an effort to maintain close ties with the EU will not only limit the expected economic fallout but also allow the country to exercise regional and global influence. While this option will require lengthy negotiation and agreement with the EU, this appears to be an effort worth making (particularly since it could provide the UK with access to the 22 trade agreements that the EU is tied to). The certainty of the Brexit supporting Conservatives will provide some certainty for investment to return, at least to London. It remains to be seen how this will be built on.
   • In contrast, a ‘hard’ Brexit will almost certainly result in the UK’s global influence diminishing. The country will be forced to become a rule taker, rather than a rule maker and will likely only be able to advance its interests when dealing with geo-politically and geo-economically irrelevant counterparties.
   • An important additional consideration is that the current agreement with the EU on Brexit is not so much a Brexit as an agreement to remain but without any voting power and any of the benefits of the EU such as its leveraging its negotiating might with other trading powers. As such, it now remains for Britain to use its diminished clout to carve out a role not just as a rule taker, but also as a laissez-faire free market where all come to play and something interesting emerges not just for London, where they most likely continue to come, but for the heartland of keen Brexit voters in the rest of England and Wales.
   • A critical challenge for the United Kingdom is whether it will remain United. The twist in the Johnson Brexit deal was to trade Northern Ireland for Brexit. In the process, the separatist Scottish National Party has swept the Conservatives and Labour out of Scotland and have the perfect case for independence.
   • Even without losing Northern Ireland and Scotland, the question of Brexit becomes now one for the Security Council, in the medium term if not the short term: what is the rationale for a small island that is not part of the EU power bloc being part of the council? The likely decision in a world of rising powers elsewhere will be to Brexit Britain from the council.

   Stepping back from all the rhetoric of Brexiteers, the UK is inescapably part of Europe, economically, historically, culturally, and geographically. It is also the successor state of a former hyperpower with global reach, with all the advantages and disadvantages that this position brings, and the birthplace of parliamentary democracy. However, in light of the last four years, the country will desperately need to recover its standing and leverage all of its assets and resources in order to remain a globally relevant and influential world power.

8. India’s Economy Rebounds Back to a US$5 trillion Trajectory in 5 years

   Background.India’s economy is expected to accelerate to 6-7% by the end of 2020 after slowing to under 5% in the latest quarter due to a combination of global and domestic factors, getting back on course to achieve the Modi government’s objective of a US$5 trillion economy in the next few years, catalysed by another wave of structural reforms and counter-cyclical policies.

   Key Dates. The government will present its budget for the coming fiscal year in early-February and is also expected to launch privatisation and labour reforms.

   Note: The budget presentation will provide an important signal on the government’s strategy for India to arrest and recover from the current slowdown and particularly how it intends to utilise fiscal policy to balance short-term spending requirements to revive the economy with medium-term fiscal constraints.

   The Competing Outcomes

   Growth Rapidly Recovers to Above 7%. The government rapidly revives credit growth, consumption and investment with a combination of counter-cyclical policy measures and well-executed structural reforms, resulting in India’s growth recovering to above 7% over the course of the coming year with the potential to go higher.

   Growth Remains at 5-6% in the Near-to-Medium Term. On the other hand, inadequate policy support, global and/or domestic factors could result in a prolonged slowdown with growth struggling to recover above 6%, and potentially going lower in case the global economy fares worse than currently expected.

   Key Drivers and Considerations

   • The Reserve Bank of India surprised markets and demonstrated its independence in its latest monetary policy review by holding interest rates, rather than cutting them further, despite India’s growth slipping to its lowest level in over six years during the last quarter, signalling its concerns about rising inflation and limited further headroom in monetary policy to revive growth.
   • Similarly, there appears to be limited room for expansionary fiscal policy given that the deficit is above target levels and including off balance sheet items (such as state government and public sector enterprise liabilities) could be 9-10% of GDP . Ratings agencies have sounded the alarm with warnings of a sovereign downgrade. The government will therefore need to navigate fiscal policy carefully and find other sources of revenue (including through privatisation) in order to fund any incremental spending or tax relief.
   • A revival of credit growth, which has declined sharply in the wake of several high-profile defaults by large corporates and non-bank lenders in 2019, will be critical to arrest the slowdown in consumption and investment; a rapid resolution of non-performing loans is therefore critical to a resumption in lending.
   • The BJP will face two important state elections next year, in the populous yet poor state of Bihar (where it rules in an alliance with a regional ally) and in Delhi (where it lost in a landslide election to a new anti-corruption party) which will provide an indication of whether it can reverse the pattern of losses at the state level (while making significant gains at the national level in 2019 on the back of Mr. Modi’s strong personal popularity).

   If India can quickly recover on the back of focused and deep structural reforms to 6-7% in the near term and then accelerate to 8% in US dollar terms, then Mr. Modi aspiration to deliver a US$5tn economy by 2024 will remain on track. Even if growth does not accelerate as fast, this milestone will be pushed out by one to two years, as India’s growth is being propelled forward by fundamental drivers which are in many ways independent of policy and driving India in its third phase of growth which will see it ‘Rise to Global Significance’.

9. Rising National Populism

   Background.National populism, which seeks to prioritise the culture and interests of an individual nation (often at the cost of global co-operation) is on the rise, particularly in the West; in 2020, the clash between national populism and liberal democracy is expected to continue with national elections schedule to take place in the United States, Poland, Greece and Serbia.

   Key Dates.US Presidential Election in November 2020; Greek Presidential Election in February 2020; Polish Presidential Election in May 2020.

   The Competing Outcomes

   National Populist Parties Continue to Rise in Prominence. Across countries including the United States, UK, Italy, Sweden and Austria, national populist parties have enjoyed record election results. With public distrust in current political systems and establishments on the rise and growing de-alignment between political parties and voters, 2020 could see more of the same in large Western democracies in North America and Europe.

   Liberal Democracy Makes a Comeback.Alternatively, 2020 could represent an important turning point in the fortunes of liberalist political parties globally. After a string of chastening defeats that has prompted much soul-searching, liberalist parties might seek to re-invent themselves and their ideologies in a manner that effectively addresses the current concerns of voters, and in the process, regain the political ground that they have ceded over the last few years.

   Key Drivers and Considerations

   • While liberal democracy is arguably the most successful political ideology in history and has led to unprecedented global development, peace and prosperity, its natural dissolution or transformation appears likely in the face of the current rising wave of national populism.
   • Over the past three years, national populism has grown from a fringe movement, supported by money, media and personalities into a powerful ideology, driven by its ability to appeal to the poor, uneducated, disadvantage, fearful, angry and hatred.
   • The rise of national populism is also a reflection of the failure of liberal democracy, which has effectively muzzled the voices of the ignorant, prejudiced and isolationists, while focusing on sweeping ideals like globalisation, open markets and the rights and value of individuals. However, for liberalism to make a comeback, this will require the creation of a new ideology that is universal, adaptive and inclusive and addresses the concerns and fears of marginalised groups.
   • Thus far, populism has favoured the far-right. The far-left has yet to succeed in sweeping to power. If the UK is anything to go by, the left’s message, at least in capitalist democracies, is not likely to be welcome. Mature countries with memories of the backward economic and social state of the peoples of the USSR appear to reject a roll back to even some of the trappings of the socialist state. Yet the young do not have that memory and so may well be open to the ideas of wealth taxes, publicly run enterprise, heavy regulations and business licencing and big government.

   National populism is the natural ideological enemy of the West., Indeed National Populism, in seeking to preserve old-fashioned ideals, is best positioned to destroy these values and way of life. Therefore, the greatest clash ahead is not between ideologies or between liberals and conservatives, or between cultures, it is between future world orders and the civilisations they will give rise to. The West for now seems stuck in divisive politics, creating post-truth societies. Having defined courage over generations as speaking truth to power, politicians in the West will now need to fundamentally change direction if their civilisation is to survive, for defeating populism will require speaking truth to the people.

10. Advances in Space Exploration

    Background.2020 represents a potentially landmark year in space exploration with the United States expected to launch its Mars rover mission, India expected to launch its second attempt at landing a rover on the south polar region of the moon and Japan initiating plans to create an automated moon base.

    Key Dates. US Mars rover mission expected to launch in July 2020; India to attempt to land on the south polar region of the Moon by November 2020.

    The Competing Outcomes

    Major Global Economies Continue to Work Together to Explore Space. Building on a long and successful trend of international collaboration on space missions (including the creation and maintenance of the International Space Station), it is likely that the next wave of advancements in space exploration and travel (in 2020 and beyond) will be powered by the joint efforts and expertise of multiple space agencies and the private sector.

    Politicisation and Isolationism Impedes Future Collaboration.The successes of international space collaboration since the Cold War have taken place in an environment where space exploration is relatively ‘un-politicized‘. However, as nationalist sentiments continue to rise across major Western and Asian economies and political leaders increasingly espouse isolationism, there is a risk that countries will seek to showcase their space capabilities as examples of both soft and hard power, and in the process, cease to collaborate with each other.

    Key Drivers and Considerations

    • From the set up and maintenance of the International Space Station (operated by the agencies of the US, Russia, Japan, Canada and the EU) to India and the United States’ most recent collaboration to locate the former’s moon rover, the history of human advancements in space travel is hung on a timeline of international collaboration.
    • Space agencies in both developed (United States, Japan) and emerging (India, China Russia) recognise this fact and have already either started working together on future space projects or have indicated a willingness to do so. As such, the next wave of progress in space, which could include landings on the dark side of the moon, manned and robotic missions to other planets is expected to be underpinned by multi-country efforts.
    • This collaboration notwithstanding, the individual prowess of a country’s space agencies has long been a proxy for its global soft power. In recent times, however, space has also been used to demonstrate hard power, most notably by Indian prime minister Narendra Modi, who, earlier this year, announced the successful test of the country’s first space weapon. With every such show of ’power‘ there is a growing risk that countries (particularly those governed by nationalist politicians in the West) may choose to adopt an insular approach towards space research going forward.
    • In addition to inter-agency cooperation, efforts to explore space are also being catalysed in parallel by bold private sector efforts including Elon Musk’s SpaceX and Virgin Galactic which have spurred competition and driven rapid advances in making commercial space flight and the commercial exploitation of space a reality.

    The continued collaboration between countries - developed and emerging – in the areas of space exploration and travel is imperative, not only because the sharing of technologies and best practices is crucial to making progress in space, but also because it reinforces the benefits of globalisation. At a time when almost every other facet of multilateralism is being revisited (including free trade, climate change and human rights), space exploration remains a rare field where global, collaborative leadership is still alive.

Conclusion

Ten years ago, at the turn of the previous decade, the world was just emerging from the Global Financial Crisis and facing an uncertain decade ahead as global fissures started to emerge between major powers, with the nexus of global growth shifting decisively towards Asia and China. The last decade has seen many megatrends play out including the rise of China and the possibility of a bi-polar world order, increasing national populism leading to rising illiberalism in western democracies, the rise of India as a scaled lower middle-income country and the next potential global power, accentuated threats from climate change and a renewed focus on the shortcomings of capitalism in the West while the East continued to embrace capitalism.

The end of the second decade presents events that are the signs not only of our times but are likely the defining themes not only in 2020, but over the coming decade, and point to much bigger shifts underway.

The global power dynamic will continue to change and shift to Asia with China surpassing the US economically and India’s economy scaling exponentially to US$7-10tn by 2030. As a result, the changing relationship between the US and China, currently heading towards a ‘Cold War’ type engagement, is likely to be an ongoing theme through the next decade and beyond, as are the relationships these two build as part of their broader geostrategic positioning, particularly with a rising India.

Beyond geopolitics, the world will continue to face a series of other global macro-level challenges that will take a decade or longer to resolve, including climate change, its consequences and the international responses thereto, the structural imbalances created by liberal capitalism and globalisation, technological advances in automation, digitisation and social media and their impact on economies and societies, as well as the large scale global migration patterns that are driving the poor and threatened to seek opportunity and safety.

The last decade has been littered with the seeds of discord, division and distrust within nations and between them; and progress seemed to derail world leaders from striving for unity and providing hope. The gap between man’s potential and its current position seems to have widened as a result. At the turn of the coming decade, it is worth stepping back to consider how humankind will address its challenges and opportunities in a way that will result in increased peace, prosperity and freedom for the peoples of the world and a more sustainable planet for all. Best wishes!

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