There is little sign of a new social contract developing that would deliver a more equitable power structure and income/wealth distribution. On the contrary, power and wealth have become more concentrated. The elite seem to be tone deaf. There are too many parallels with the runup to the French Revolution of 1789.

There is even less sign of a contract between humanity and nature, of mankind respecting nature and acknowledging the role of ecosystems as a fundamental factor underpinning the survival of the species. Humans still think that artificially engineered instruments are better than nature.

Despite the twelve fundamental challenges, the world is still ruled very much by mindsets forged during the industrial age and designed to deliver economic growth.

The future, up to 2035, based on what we know now about demography, technology and human behaviour, looks like this.

The world will become divided into regions, the three most important of which are Asia, the Western hemisphere, and Europe and its adjacent areas. The leading regional nation or nations will build their own technology—internet, 5G and such—energy grids and currency area, forcing other countries in the region into this strong economic, technological, cultural and political framework. This game is already visible for the United States and China. It will be difficult and expensive to do business outside the region, which points to a more compact supply chain.

Some elements of globalization will be maintained, but global institutions (the IMF, World Bank and WTO) and the global rule of law (for example, the United Nations Convention on the Law of the Sea) will wither away. Such a global model means that the world will stay entrenched in the current political and economic thinking without starting to shift gear and tackle the deep underlying challenges. Shortterm economic profit will continue to control the actions of policymakers, as will the traditional power game.

The twelve fundamental challenges will be talked about but they will not be fundamentally addressed. Tepid national and international efforts will be insufficient to halt the threat they pose for civilization, or even less to set the course for a better world.

INTRODUCTION

This study was born of a decade's participant observation of rural women in the southwest of Peninsular Malaysia. It was apparent to me that they dealt with a particularly patriarchal society by establishing power in the privacy of the home by wielding religion as the tool of choice to exert control over their offspring and spouse. Subsequent research into the possibility of rural mothers and mother-figures perpetuating more conservative or exclusivist interpretations of Islam in the home took a different turn, however, when I realized that this state of affairs already exists in urban Kuala Lumpur and its outskirts.

After more than three years letting this stew on a back-burner and after several failed attempts to put forward the hypothesis that mothers could possibly be vectors of terror, it became clear that it is highly taboo in Southeast Asia to posit that a mother-figure could be anything but pure and perfect. However in 2017, the first woman with links to the Islamic State (IS) was arrested in Singapore; subsequent media coverage of similar arrests in Malaysia and Indonesia enabled the acceptance for publication of an article which had previously been deemed “rather difficult content”. In May 2018, the Surabaya family suicide bombings shocked the region and the rejection of this theory for being “offensive to mothers” dissipated.

The question at hand is whether mothers use religion in the private sphere of the home to expand personal power and social standing, and whether that could lead to increased normalization of “hateful extremism”.

Initially meant to focus on just rural women, interviews with informants broadened the quest to Kuala Lumpur and its wealthy suburbs. The perpetuation of exclusivist and intolerant views amongst mothers and encouragement to engage in the defence of the greater Islamic cause, or at least to carry out “financial jihad” (jihad bil mal), was already in motion. From the city's tertiary centres of learning, a new “empowering form of Islam” not unlike that described as “female jihadism” (EUROPOL 2019) is sent back to rural villages through students and fresh graduates with a mission to recruit disenfranchised “sisters” to the cause.

The global financial crisis of 2008–9 morphed into political, economic and social problems, mainly for the United States, demonstrating its fading power within the global picture. Domestic disruptions and dislocations of a magnitude few had foreseen followed. It disclosed how fragile the US political system had become, confronting it with events that required bipartisan measures to address in the interests of the nation and, even more so, in the interests of the world.

History may well record the crisis as an event that changed the attitudes of Americans. In 2011, 38 per cent of Americans were of the opinion that the United States stood above all other countries in the world. In 2017, the figure was 29 per cent. Even if the percentage of Americans saying that there are other countries that are better than the United States has not gone above 15 per cent, the smaller percentage that see their country as the best is significant, as it signifies a reduced willingness to finance and support a policy of “exporting” the model. The support for the kind of foreign and security policies that the United States had for decades sustained—policies anchored in values—is now much weaker.

A survey conducted in twenty-two countries in 2011 revealed that 66 per cent of people had a favourable view of the United States, compared to 25 per cent who saw it as a major threat. Only five years later, the figure for those with a favourable view of the United States was down to 51 per cent, with those seeing it as a threat having risen to 45 per cent. The biggest swing was seen in Germany (30 percentage points), France (29 percentage points) and Mexico (26 percentage points). The figure for the other neighbour of the United States, Canada, was at 23 per cent.

These two surveys convey the picture of a superpower that is losing both domestic and international support for its global role— especially from its allies and neighbouring countries. The figures for its two neighbours augur fundamental trouble, with 66 per cent of Mexicans and 46 per cent of Canadians saying that the United States is a major threat. With regard to US policy and its position in Asia, the percentage of people classifying the United States as a major threat among its two main allies, Japan and Korea, are 66 and 67 per cent, respectively.

Indicators of a New Power Structure

International trade used to be global, as the label “the global supply chain” indicates, but it is turning into a regional supply chain. No other place demonstrates this phenomenon as clearly as Asia. Asia's share of intraregional trade was 57.3 per cent in 2016, up from an average of 55.9 per cent between 2010 and 2015. It has been a general pattern, when analysing global trade, that trade among emerging markets and developing economies has been increasing, while that among industrialized countries has been in decline. What may be termed south–south trade had increased from 8 per cent of global trade in 1995 to 20 per cent in 2016. In contrast, north–north trade has fallen from 55 per cent in 1995 to 33 per cent today.

At first glance this may not seem much. But if the trend continues, and all signs indicate that it will, it is going to turn the tables of the global trade structure. It shows that whilst Asia in the past produced for consumption in the United States and Europe, it is now producing for consumption in Asia. From a logistics and transport point of view, the supply chain is becoming more compact, which will have repercussions on international transport, mainly sea transport, and in particular on container lines, which will need to adjust after decades of investment in global transport.

The global value chain is replacing the global supply chain as an indicator of the complexity of global trade. One example is that fifteen thousand components come together to make up a modern car. More than two-thirds of international trade—including the supply of smartphones, cars, TVs and computers—takes place within such global value chains. It allows each country to specialize in a particular role or phase of the chain. China, for example, exports many technological products, but it has in fact moved into the role of an assembler of components from many other countries, including the United States, sitting at the end of many global value chains.

The first phase of economic globalization in modern times lasted from the early 1950s to the first decade of the twenty-first century. It was shaped by national economies adapting to a global market and was dominated by the liberalization of trade and investments. The impulse for this came from the transformation of national economies that spread growth to other countries, drawing them into globalization. To make it work, rules-based international organizations were set up. Some nationstates went further and established a system of economic integration, such as the European Union (EU)—both an economic and a political enterprise—and the Association of Southeast Asian Nations (ASEAN).

The sinews of the global economy over the next fifteen years will be neither the national economies nor the conventional well-known forces such as trade and investment, but rather demographics, technology and energy, and how these will interact with each other. They will frame the conditions for the national economies to thrive; those that cannot do so will face a lacklustre economic situation. The impulse will be in the opposite direction to what it was in the first phase. This time it will be from internationalization to the national economies.

The political problem will be how to exploit the opportunities that this interaction will put on the table, and the question of where nationstates will be willing to take further steps to globalize their economies despite the short-term problems of restructuring.

Demographics

The size of the labour force (the share of the population aged 15–64 years of age) and the dependency ratio (the share of those aged over 65) are decisive parameters in attempts to forecast the future economic global competitiveness of a nation-state.

For many years the Chinese labour force knew only one direction—it was going up. When Deng Xiaoping initiated reforms in the late 1970s, he gambled on cheap labour costs combined with a reasonably skilled labour force, discipline and willingness, plus the ability to work hard. It turned out to be a colossal success. China became the centre for manufacturing, and it crowded out the industrialized countries as well as competitors among emerging markets and developing economies, coming close to monopolizing labour-intensive, low-cost manufacturing.

The economic, political, strategic and cultural dynamism in Southeast Asia has gained added relevance in recent years with the spectacular rise of giant economies in East and South Asia. This has drawn greater attention to the region and to the enhanced role it now plays in international relations and global economics.

The sustained effort made by Southeast Asian nations since 1967 towards a peaceful and gradual integration of their economies has had indubitable success, and perhaps as a consequence of this, most of these countries are undergoing deep political and social changes domestically and are constructing innovative solutions to meet new international challenges. Big Power tensions continue to be played out in the neighbourhood despite the tradition of neutrality exercised by the Association of Southeast Asian Nations (ASEAN).

The Trends in Southeast Asia series acts as a platform for serious analyses by selected authors who are experts in their fields. It is aimed at encouraging policymakers and scholars to contemplate the diversity and dynamism of this exciting region.

THE EDITORS

Series Chairman:

Series Editor:

Editorial Committee:

COVID-19 has exacerbated and accelerated some trends:

• •In geopolitics—the decline of US leadership, rising US-China tensions and the “demise” of multilateralism and rules-based order.

• •On economic globalization—the trend towards regionalization2 and economic nationalism.

More specifically, it has, for both the short and long term, added implications for:

• •Economic recovery—whether it will be V-shaped, U-shaped or L-shaped.

• •Societal structure

• •Technology and data

The health aspects have attracted a lot of interest. The most important one may be: Are we prepared for another pandemic?

Geopolitics

American global leadership has been declining for some years. The US share of global GDP fell from 31.2 per cent in 2000 to 23.8 per cent in 2018. The same trend is visible for manufacturing, with the United States accounting for 16.6 per cent in 2018 compared to not many decades ago when it was the leading manufacturing country in the world. Debt is rising fast. It may still be the leading country for innovation and higher education, but the gap to challengers such as China is narrowing. There have been signs of an American strategic withdrawal for a decade or two in view of a mismatch between its capabilities and commitments. While the United States is unquestionably still the most powerful nation, its global outreach, capability and willingness to continue as global leader are not at the same level they were at the turn of the century. A cornerstone of President Trump's foreign and security policies has been to realign the costs and benefits of the US global role by cutting commitments. In some cases this has been manifested in the withdrawal of troops, as was the case in June 2020 with the announcement of a cut by a third of US troops in Germany Such reductions, often made without any warning to allies, raises doubts about US credibility, and they may give rise to suspicions that US guarantees may be subordinated to presidential whims.

For several years many observers have seen China as the next global leader. This conclusion may be too hasty. China's share of global GDP has risen from 7.2 per cent in 2000 to 15.8 per cent in 2018. This is remarkable, but it still leaves China far behind the United States.

Like democracy, the nation-state is under attack. This should not come as a surprise as democracy is in many respects the political system born to support the nation-state. Like democracy, the strength of the nation-state is, or rather was, coherence, solidarity and a feeling among citizens of being in the same boat. Under the impact of information and communication technology, citizens shift their allegiance to other institutions or groups, cutting the link of mutual dependence holding the nation-state together.

• • It is being replaced by people shifting their adherence and loyalty from a nation-state (nationality as identity) to common and shared values.

• • The role of migration questions the prerogative of the nationstate as the “best” political system. Migration is rarely motivated by a wish to take on another national identity.

• • It is being undermined by the big data companies delivering instruments for communication—social networks overruling the privilege of a nation-state of controlling communication with its people.

A genuine nation-state with a single ethnicity, a single religion and a common culture is difficult to find nowadays. Fifty years ago, such could perhaps be found among the Nordic countries in Europe (Sweden, Denmark, Norway, Finland and Iceland), but since migration began in the 1970s and 1980s the picture has changed.

And with regard to the idea of the nation-state, it should be borne in mind that even if the label is used freely for countries around the globe, there is in reality a big difference among nation-states depending on where they find themselves and their history.

Almost all the genuine nation-states are to be found in Europe. The idea of the nation-state goes back to the end of the Thirty Years War with the Westphalian Peace in 1648. Over recent decades, minorities have risen to question their adherence to the nation-state, as seen in Britain with Scotland and in Spain with Catalonia. It is sometimes forgotten that two instances of what look like solid European nation-states— Germany and Italy—were first created in 1871 and 1861, respectively. In the early 1990s, Yugoslavia, an artificial nation-state created after the end of World War I, collapsed.

Civilization is a complex, fragile and vulnerable structure that ultimately depends on people's willingness to act in conformity with certain unwritten rules. This does not always filter through to the governing elite, the businesses and the people, all of whom take the cohesiveness of societies and responses to challenges for granted. Analyses of past civilizations disclose that civilizations succumbed to complacency, external changes such as climate factors, and internal strife, mainly about who governed and distributed the wealth.

Unfortunately, our civilization shows signs of all three of these elements. Complacency is widespread. The political leadership target short-term results, neglecting the long-term negative repercussions. This is combined with a worrying tendency among populations to take what has been achieved for granted. The unattractive fact that the outgoing generation has had to strive to get where they are has been put aside and replaced by a feeling that this is our right. External changes such as climate change and resource scarcities are well-known. But, despite a number of declarations and lip service, they fail to be transformed into policies. Internally, a growing gap between those who are rich and powerful and those who are not threatens to break up societies, mainly because the rich and powerful refuse to share what they have, alienating the majority of people who feel they have no chance of upward social mobility.

The past three to four generations plus the one currently in charge crafted a social contract—how to shape and maintain social cohesiveness among people living in the same society. This entailed a reasonable degree of caring for others combined with empathy and understanding of inclusive growth. That kept us going for quite a long time.

The impact of human beings on nature, however, was neglected, with pollution and the loss of diversity being the consequences. It is possible that the twentieth century—should we manage to avoid wiping out our civilization—will be classified as the greatest robbery, in the sense that we plundered nature, disregarding other species and future generations. Perhaps a kinder label might be the century of egoism/selfishness.

Spinoza's Prediction

The Jewish-Dutch philosopher Spinoza (1632–77) predicted that democracy would be guided by and taken over by demagogues jettisoning reason and logic. Freedom for individuals in whatever way it was seen when Spinoza lived would be there, but the mediocrity of rulers would lead to chaos. The elite would rebel against such a system. The people would be confronted with the choice between freedom and chaos versus order and tyranny. Spinoza predicted that people would choose order and tyranny. Men are by nature unequal, and equality among unequals is an absurdity. Therefore, a system which Spinoza labels aristocracy or monarchy, with the ablest individuals in charge, would inevitably prevail.

It is thought provoking that the BBC in February 2017 published a localized breakdown of voting patterns determining the outcome of the British referendum to leave the European Union of 23 June 2016 (the Brexit referendum). The report says that “a statistical analysis of the data obtained for over a thousand individual local government wards confirms how the strength of the local Leave vote was strongly associated with lower educational qualifications. Wards where the population had fewer qualifications tended to have a higher Leave vote.… If the proportion of the local electorate with a degree or similar qualification was one percentage point lower, then on average the leave vote was higher by nearly one percentage point.” History will tell whether the decision to leave was good or bad for Britain, but, as the data reveals, it was decided by the less educated, while the higher educated would have liked Britain to stay. Moreover, those earning most of the money to keep Britain going, including welfare payments, are found among the higher educated.

Six Major Problems

How Representative is Democracy?

Liberal, representative democracy is supposed to produce a parliament and government congruent with the electorate. It does not always turn out this way. Members of parliaments must toe the line to solidify the party's role in blocking legislation across party lines. Sometimes this makes it impossible for the government to find a majority, it overrides the national interest, or prevents members from voting according to their conscience. In the US Congress, members may be regarded as outcasts if they break party discipline.

The economic, political, strategic and cultural dynamism in Southeast Asia has gained added relevance in recent years with the spectacular rise of giant economies in East and South Asia. This has drawn greater attention to the region and to the enhanced role it now plays in international relations and global economics.

The sustained effort made by Southeast Asian nations since 1967 towards a peaceful and gradual integration of their economies has had indubitable success, and perhaps as a consequence of this, most of these countries are undergoing deep political and social changes domestically and are constructing innovative solutions to meet new international challenges. Big Power tensions continue to be played out in the neighbourhood despite the tradition of neutrality exercised by the Association of Southeast Asian Nations (ASEAN).

The Trends in Southeast Asia series acts as a platform for serious analyses by selected authors who are experts in their fields. It is aimed at encouraging policymakers and scholars to contemplate the diversity and dynamism of this exciting region.

THE EDITORS

Series Chairman:

Series Editor:

Editorial Committee:

EXECUTIVE SUMMARY

• • China's Belt and Road Initiative (BRI) is expected to be the largest infrastructure development scheme of the twenty-first century.

• • There is escalating concern over BRI's potential environmental impacts in Southeast Asia, a global biodiversity hotspot and a focus area of BRI development.

• • Case studies of Indonesia, Myanmar, Lao PDR and Malaysia show that the success of BRI in bringing about sustainable growth and opportunities depends on the Chinese government and financiers, as well as the agencies and governments involved when BRI investments take place.

• • The adoption of best environmental practices is critical in ensuring that growth is sustainable and that bad environmental practices are not locked in for decades to come.