Global trends in the first quarter of the 21st century

Gonzalo de Cadenas Santiago, Deputy General Manager of MAPFRE Economics

At the dawn of the 21st century, we can see a global scenario marked by profound transformations that define the course of our society. Current trends paint a complex picture, where reality is intertwined with the predictions of essayists who write on the topics of social unrest and geopolitics, such as Pankaj Misra and Zbigniew Brzezinski.

Global growth, the fundamental driver of our progress, is experiencing unexpected challenges. The phenomenon of population aging, declining labor force participation and declining productivity loom over economic expansion. Wealth is concentrated in an aging elite, while the less privileged strata are getting younger.

We are on the threshold of a demographic reality where, in 25 years, 6 out of 10 children under the age of 15 will reside on the shores of the Indian Ocean, while 8 out of 10 over the age of 65 will reside on the shores of the Atlantic and the North Pacific. This will have inescapable consequences for wealth distribution, dependency and future political and social development.

The upper middle classes in rich countries have been gradually disappearing for the past two decades, and the middle class in lower-middle income countries faces the risk of losing the gains achieved in the same period. The gap between labor income and capital income is widening, generating a deepening social divide. Technology, especially artificial intelligence, acts as an accelerator of these changes, with diverse consequences on productivity and wealth distribution.

In this context, identitarianism emerges as a response to social tensions, exacerbated by polarization and partisan animosity fostered by social technology. Exclusionary policies are gaining ground, fueled by social discontent and the struggle for scarce resources. We face an angry world, where the ideas are the palpable manifestation of that anger (Pankaj Misra, 2017).

At both the national and global level, the exercise of global governance is becoming increasingly complicated due to the rise of populist solutions to generational malaise. The post-war consensus has eroded, and international relations are overshadowed by commercial expectations rather than collaboration between nations.

The United States has lost its dominant position and post-World War II institutions operate with decreasing effectiveness due to the growing non-alignment of countries claiming autonomy and exercising veto power (Brzezinski, 2012).

Meanwhile, the biosphere is undergoing accelerated transformations. The perception that these processes are taking place over the long term is a cognitive bias that persists, as evidenced by the recent agreement at COP 28, where a global warming target above 1.5% was admitted.

Mapfre Economics’ view is that these trends, together with emerging vulnerabilities and catalysts resulting from the current socioeconomic and political situation, generate a myriad of known and unknown risks that require comprehensive, shared and agreed management by all global players. This conclusion is the same one that the World Economic Forum has been promoting for more than a decade