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Thomas P.M. Barnett Forecasts Global Integration and Growth of Global Middle Class during the Next 25 Years

Barnett also predicts the 21st century will be “the most religious in human history.”

Vancouver, BC, May 13, 2008 − In a presentation today at the CFA Institute 61st Annual Conference, Thomas P.M. Barnett, senior managing director of Enterra Solutions LLC and author of the forthcoming book Great Powers: America and the World After Bush (January 2009), discussed the dominant trends that will shape the world during the next 25 years.

In his presentation, Barnett divided the world into two groups: those regions that have fully integrated and those regions that have not. The former group, which has largely recognized the benefits of economic integration and globalization, includes North America, Europe, Russia, Australia, and parts of South America. The latter group − Africa, the Middle East, and southeastern Asia − has resisted the benefits of economic integration and globalization. Interestingly, Barnett noted that the overwhelming majority of U.S. military engagements since 1990 have occurred in the world’s unintegrated regions.

According to Barnett, globalization can act on a regional basis to reduce the number of countries that have not integrated. For example, China could help Vietnam emerge from the gap, whereas Brazil may eventually have a similar impact on countries like Venezuela. Barnett suggests the United States could serve as a model in this process because its states unified out of mutual self-interest to promote commerce and common security. Barnett believes that this integration, with its own regional variations, will be the dominant dynamic of the next 25 years.

This changing dynamic will take the global middle class from approximately a quarter of the world’s population today to approximately 50-60 percent within the next 30 years, Barnett said.

Additionally, the shift will serve as a catalyst for interesting, unexpected results. For example, Barnett believes that the 21st century could be the most religious in human history. He argues that as residents of newly integrating countries begin to lose a local culture − a culture that may have been substantially unchanged for hundreds of years − they will need to find a new basis for a code of behavior. According to Barnett, this search for spiritual guidance will result in greater religious pluralism in which far more choices will be available than in the past.

Barnett’s presentation concluded with observations about China and its future. He noted that the Chinese phenomenon is only 25 years old. In that quarter century, China has gained economic experience that took the United States 125 years to accumulate.

For a country that would otherwise be characterized as an emerging economy, China has rather unusual demographics, Barnett said. The country’s one-child policy has resulted in a population in which males significantly outnumber females.

Additionally, China’s population is rapidly aging. Barnett said that by the year 2036, 20 percent of the population of both China and the United States will be older than 65. Whereas it took 64 years for the U.S. population age 65 or older to go from 10 percent to 20 percent, the same change took China less than 20 years.

Barnett noted that, historically, aging societies are generally nonbelligerent and when combined with rising incomes, tend to move toward political pluralism.

The CFA Institute Annual Conference, which concludes tomorrow, brings together more than 1,800 investment professionals from 70 countries and offers an unparalleled look at the trends and investment issues critical to success in today’s global marketplace. 

CFA Institute
CFA Institute is the global association for investment professionals. It administers the CFA^® and CIPM curriculum and exam programs worldwide; publishes research; conducts professional-development programs; and sets voluntary, ethics-based professional and performance-reporting standards for the investment industry. CFA Institute has more than 95,000 members, who include the world’s 82,000 CFA charterholders, in 133 countries and territories, as well as 135 affiliated professional societies in 56 countries and territories. More information may be found at www.cfainstitute.org. (Bloomberg users can find CFA Institute at 497458Z).