First with Financial Comment from Arabia

Looking back 30 years to see into the future

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At the Davos World Economic Forum participants are often encouraged to peer 30 years into the future. But what about looking back 30 years and recalling the dreams of that time for the future and using that as a guide as to what might or might not be achieved in the future.

This correspondent will return to Oxford University for a meeting of alumni in June after an absence of 30 years. What did the world look like then and what did we dream about?

Actually there were not so many dreamers among the spires then. Students were an apathetic lot and seldom went to meet our famous visitors. I liked to meet as many as possible and frequently ended up in one-to-one conversations.

Cold War days

At that time the world was split into the two camps of the Cold War, and Eastern Europe remained behind the Iron Curtain. Even the thought of this ever changing looked impossible.

The Middle East was a major source of tension, then as now. There was the Iranian Hostage Crisis after the revolution, the invasion of Afghanistan by Russia and the second oil price shock of 1980 – which very few analysts would have expected to be the start of 20 years of low oil prices.

In England the two party system seemed about to end with the rise of a new centre party. The leader of the conservative students in Oxford, a chap called William Hague remembers the leader of the liberal faction as a major rival. His political career blossomed, mine was already over.

But then as now the world faced a serious recession. The 1980-2 recession was probably the worst until the current day. Yet we survived, although it made getting jobs difficult for graduates at the time. Indeed, the Thatcher Revolution succeeded in reviving the British economy, albeit after a very painful start for many of us.

But over 30 years the extent of change depends very much on where you are sitting. In places like Oxford or my home town Salisbury time has stood still. Russia and Eastern Europe are transformed beyond belief, and this peaceful transition is the greatest achievement of the European Union perhaps.

Middle East progress

In the Middle East the tensions remain. But some cities have made amazing progress. Dubai was a small town in 1980, now it is a global hub city with the world’s tallest building. Other countries have gone backwards.

So where would that leave us 30 years in the future when I hope to be among the survivors going back to my old university again? The lesson seems to be that some things do change and others change very little.

Geopolitically you would have to think a split between the USA and China might be the new axis of political power. It would be wrong to write-off America. We used to do that in 1980. China I am less sure about.

One of my young colleagues from Oxford went to Japan in the 1980s and came back after the market crash of 1990. Japan became very important but never surpassed the USA. China could yet just be a significant power rather than a bipolar giant by 2040. Its crash is yet to come, and all that glitters is not necessarily gold.

European Union

Europe ought to be far more important by 2040. The expansion and consolidation of the European Union is an understated achievement of the past three decades. If it continues and embraces Russia, to a greater or lesser extent, then this is a formidable economic and cultural power bloc, substantially larger than the US and second only to China in population.

Just as we used to write off the USA in 1980, today people overlook Europe. It is a very large, rich and well-educated continent. China has a very long way to go to catch up.

The Middle East should also enjoy dynamic change, if only because a fast growing, young population will demand it, and the oil and gas wealth should pay for it. The hope must be for a more peaceful outlook with the oil and gas reserves developed to the point that an economic transformation of the region occurs.

Cities like Dubai, Abu Dhabi and Doha are already feeling this phenomenon. It ought to become more widespread. Will it actually happen? Given that the world needs the energy resources of the region this has to be inevitable, one way or another.


Written by Peter Cooper

February 4, 2010 at 9:03 am

One Response

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  1. Without the discovery of North Sea oil and gas, the UK would be a far poorer country than it is today. Watch what happens to the standard of living during the next decade as it begins to run out.
    As far as predicting what the world will be like in 30 years, it might be possible, if it weren’t for two short words-peak oil. The future IS different this time because, for the first time since the dawn of the Industrial Revolution, the future supply of energy will become constrained and much more expensive. This will change everything, because we use energy to do everything.
    At the same time, the global population is exploding. Wikipedia world population. The planet isn’t getting any larger, but as countries develop, their demand for energy increases radically. No, we can no longer predict the future only by looking at what has happened in the past.

    Bill Simpson in Slidell

    February 4, 2010 at 11:44 pm

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