Geography and Demography are Destiny

Geographical view of the Américas

Geography is the backdrop of human history. The position of a country on a map is the first element that truely defines it, so much more than its government is able to. Geographical distortions can be as revealing of the long-range intentions of governments, for example, the melting of the Arctic, allows a glimpse of the possible future shipping routes between Asia and Europe and the geo-trade options that this could bring about.

Demography is destiny

The US is in the midst of a new demographic, cultural and political moment. Interestingly the extension of the US border southwards in the early 19th Century to incorporate newly won land from México into the US is now facing a seismic demographic change in the 21st century - in coming decades hispanos from the wider Américas will become more than a quarter of the US electorate. 

Hispanos currently represent 17pc of the US population, and hispanic population growth is set to turn the US into a country where fewer than half the population will be non-Hispanic whites within 20 years. This shift will create a new demographic reality in the US. This point was heavily illustrated in the messages of Obama's recent presidential inauguration speech. A Cuban-American became the first hispano to recite the official inaugural poem. Rev Luis León delivered an inaugural benediction with phrases spoken in Spanish. And Justice Sonia Sotomayor, the first hispanic on the Supreme Court, administered the oath of office to Vice President Joe Biden.

Geography and Economic Growth

The notion that Mexico offers only cheap labour no longer rings true in the 21st Century. México produces around 115,000 engineering students every year, almost three times as many as the US on an annual basis. Hence machine specialists are usually easier to find in Tijuana than in many big US cities. As are, accountants experienced in production economics and other highly skilled workers.

Today, in the 21st century, Tijuana is becoming to San Diego what Shenzhen is to Hong Kong. Travel between San Diego and Tijuana is around 20 minutes, with no passport required. Although a passport is needed to come back, but there are fast-track lanes for business people. Many employees commute across the border each day, good doctors are cheaper and easier to find in Tijuana, as are private schools. In some ways, the border feels more like the  borders between the members of the EU than a divide between two countries.

And it’s not just Tijuana. To the east, in Juárez, Dell computers are built by Foxconn, the company that manufactures more than 40pc of the world’s electronics (including Apple’s iPhone and iPad). To the south, in Querétaro, a factory builds the transmissions that General Motors installs in its Corvettes. The design of General Electric’s GEnx turbine jet engine and the production of interior elements of Boeing’s 787 Dreamliner also happen in México. In fact, manufactured goods are the country’s chief export, with private investment in this sector among the highest in the world.

Once again geography is destiny too, the shorter and more nimble a supply chain is, the better. Hence México is benefiting from its proximity to the US to feed the demand for just-in-time manufacturing. And the demographics of producing the right mix of highly-skilled workers have combined with it to create growth and prosperity in the 21st Century. 

Water in the 21st Century

Water is a common pool resource in the 21st Century

From the water wars and the pumping races in California in the 1950s to irrigation systems in Spain and mountain villages in Switzerland, all have demonstrated that people are able to draw up sensible rules for the use of common-pool resources like water. Water in the 21st century will increasingly need its own set of sensible rules to meet the new political, economic and environmental realities of the 21st century.

The Colorado River in the US

The Colorado River provides much of the water for many cities and farms in seven states in the US including Colorado, Wyoming, Utah, New Mexico, Nevada, Arizona and California before it reaches México. But flows of water on the Colorado River in the US have been forecast to decrease by up to 30pc by 2050. In the Northern States its water supports cattle empires. In the Southern States especially in California, the river irrigates deserts to produce much of the US' agricultural products, fruit and winter vegetables. And all along the way, aqueducts branch off to supply cities from Salt Lake City, Denver, Phoenix and Los Angeles. Interestingly, the Metropolis closest to Lake Mead, Las Vegas, gets 90pc of its water from this one source. 

Map of Colorado River in US West

Arguments over water tend to have four dimensions – physical, legal, political and cultural. For the physical the standard response is to summon the engineers. In the case of the Colorado River, engineers are already digging a new intake at 890 feet (lower than the current intakes as the water level in Lake Mead has decreased to ensure a guaranteed water supply to Las Vegas). Another response is to call in the lawyers. This was the preferred approach in the 20th century, in the era of the so called “water wars”. Starting with the the Colorado River Compact of 1922 and continuing with statutes, a treaty with México and case law until the 1960s, a truce was achieved. Called the Law of the River, the resulting regime determines who along the river has what right to how much water. 

At least, it does in theory. The problem is that the law took shape after two decades of record water flows, which became the basis for allocation. As a result it apportions more water than there is in the river. For decades that did not matter, since there was so few people. Then the cattle, fruit and people multiplied. The law's seniority rules theoretically mean that, for example, the taps to Las Vegas would be shut completely before agriculture in California were to loose a drop of water. This gives rise to the political dimension.

In the 21st century, cooperation has mostly replaced the old rivalries among agricultural and urban users among the seven river states. Nevada and Arizona have a water banking partnership and Arizona stores excess water in its aquifers to share with Nevada if needed. In California, the water utility of Los Angeles has bought water rights from some farmers. But inevitably arguments still persist. 

This leads into the final dimension which is the cultural dimension. The argument here is directly related to the culture of the US West. For example, does every middle-class household really need a lawn in a desert? In some cases, counties have begun paying their citizens to rip out their turf and opt for a desert landscape garden instead that can be just as chic. 

Egypt and Ethiopia are fighting for the Nile's water too

Most of the water that flows down the lower reaches of the Nile, the world's longest river, comes from the Ethiopian highlands. Up until recently the Ethiopian Government had been content to abide by a Nile River Water Treaty negotiated in 1959. The trouble is the current treaty has strongly favoured the biggest and most influential consumer of Nile water, Egypt. Ethiopia, which has recently overtaken Egypt as Africa's second-most populous nation has joined together with the other upstream Nile nations including Burundi, Congo, Kenya, Rwanda, Tanzania and Uganda to re-write the 1959 Nile River Water treaty taking advantage of the power vaccuum in Egypt's leadership after the Arab Spring. 

The combined population of the upstream countries along the Nile is 240m against Egypt (85m) and Sudan (30m) and South Sudan (14m). There are also plans afoot for Ethiopia to dam its bit of the Blue Nile and to build a large hydro-power capacity that would be the centrepiece of a plan to increase the country's electricity supply five fold over the next five years. These plans will undoubtedly have a big impact on other Nile countries downstream and have the potential to provoke cross-border water conflicts.

 And what about fracking and high water use it requires

In order to extract gas held in the hard shale rock, it is necessary to break up small sections by firing large quantities of water mixed with fine sand and fracking chemicals at a very high pressure to make the shale rock give up its gas. Water has been identified as a serious problem for mining shale gas mainly because of the quantities of it that are needed to successfully frack wells. But worse of all there have already been cases where local ground water aquifiers have been polluted by the harsh chemicals used in the fracking process. It is estimated that the average shale well uses around of 22m litres of water to extract the gas. If as predicted by many energy experts, shale gas extraction goes ahead at full speed, worldwide gas could make up around 25pc of primary energy by 2035 adding further pressure to the common pool resource of water.

So what does the future hold

The Geo-Trade Blog believes there is an increasing awareness of the need to act on the world’s impending water challenge in the 21st Century. Nevertheless growing global resource use highlights the complex interdependencies between water and energy, agriculture, industry, urban growth and ecosystems.

Governments and business need to prepare for long term water scarcity and to consider a framework to share the world's water - a common pool resource. Of particular importance are the challenges to addressing water issues at policy level nationally and internationally, to avoid cross-border water conflict. The Geo-Trade Blog believes that people do have the capacity to  draw up sensible rules for water use in the 21st Century but consideration needs to start now.

中国 China in 年 2012 – Challenges ahead in the Year of the Dragon 龙年

Special Postage Stamp issued for Chinese New Year - Year of the Dragon 2012

A new political theory: universalists v exceptionalists

In recent years the battle lines in Chinese politics have become clearer. They appear to be drawn between universalists, who believe China must eventually converge on a new value based political theory, and exceptionalists, who believe that China must preserve and perfect the current "Chinese Model". The context for this debate takes place within the political uncertainty in the build-up to the leadership transition combined with a phobia amongst the Chinese elites of political reform.

Nevertheless the philosophical political debate is more real than ever. On the one hand, the term “universal values” 普世价值 is a new one in Chinese Political debate. Many Chinese scholars believe the debate really took off in 2008 after the earthquake in the Sichuan province 四川省 that killed around 80,000 people. A liberal newspaper in the southern province of Guang dong 广东省published an editorial that praised the government's swift response. It said it had “honoured its commitments to its own people and to the whole world with respect to universal values”. The debate continued in December 2008 when a manifesto was issued in support of universal values known as Charter 08. It said, China faced a choice of maintaining its authoritarian system or recognising 普世价值 "universal values". However there is no real agreement on what the universal values are. Some Chinese scholars prefer to contrast what they see as a Confucian stress on social harmony and moral rectitude with the West's emphasis on individual rights.

Furthermore many Chinese scholars are surprised by the notion that multi-party democracy is the form of government towards which all other systems naturally evolve. Chinese academics do not subscribe to the concept of the nation-state, the basis of modern diplomacy developed in Europe. Rather they have developed a different Chinese theory of International Relations. Much of the Chinese theory is based on the notion of 天下, or in English, “all under heaven”. This dates back to the golden age of classical Chinese philosophy, of Confucius, Mencius, Laozi and the rest in the “warring states” period before China's unification in 221BC under the first Qin emperor. 天下 is widely understood as a unified world dominated by one country to which neighbours and those beyond look for guidance and pay tribute.

The concept of 天下, as advocated by the Beijing philosopher, 赵汀阳 Zhao Tingyang, is a utopian concept of universal harmony, unattainable, he concedes, for 200-300 years, where everyone opts into a system of global government. There is no compulsion to opt in and the system is one of equality. However he stresses 天下 is a voluntary choice. There are echoes of 天下 in the 2008 Beijing Olympics slogan “One World, One Dream”. There are also echos of it in the blockbuster film Hero released in 2002 set in the time period of the Qin unification.

Moreover Chinese scholars criticise the notion of "supposed" equality between nation-states, they note some countries are more equal than others. For example, China is a big country and other countries are smaller countries and that is just a fact. They also perceive that national governments often ignore the interests of those without a vote, such as unborn generations (not a usual consideration of Western Politicians) and foreigners.

On the other side of the debate is the exceptionalist camp. It's main ideas have been recently summed up in a book by 张维为Zhang Wei Wei called “The Rise of a civilisational state".中国震撼:一个"文明型国家"的崛起 In this book, Mr Zhang argues that China is unique as the world's only amalgam of an ancient civilisation and a huge modern state and is increasingly returning to its own norms and standards. Liberal Chinese are worried that the exceptionalist school of thought is also attracting the most ardent nationalist supporters, who often claim that the West is trying to undermine China's achievements and keep the country from its rightful place as a great power. 张维为Zhang Wei Wei, recently wrote that China's evolution was “as if the roman empire had never collapsed and had survived to this day, turning itself into a modern state with a central government and modern economy, combining all sorts of traditional cultures into one body with everyone speaking Latin.”

Consequently the new communist party leaders when they come to power during 2012 and into 2013 face a daunting task, to navigate their way through these two competing political philosophies both vying to win the battle of ideas for the future of Chinese political thought.

Demographic challenges on the horizon too

A further serious challenge is related to China's demography. Over the last three decades, China has had its fertility artificially suppressed by the one-child policy and as a result it is ageing at an unprecedented rate according to statistics from the UN's Population Division. In 1980 China's median age (the point where half the population is older and half younger) was 22 years, a common developing country figure. But UN statistics show a worrying trend, China will be older than the US as early as 2020 and older than Europe by 2030. This will likely bring an end to its cheap-labour manufacturing and its dependency ratio with rise from 38 to 64 by 2050, one of sharpest rises the world has ever seen.

Furthermore China will have the added challenge of sexual imbalances, after a decade of sex-selective abortions, China will have 96.5m men in their 20s in 2025 but only 80.3m young women. Given these alarming figures, demography is set to become another serious looming challenge for the new leaders of the Communist Party in 2012. The diagram below shows the UN statistics of the Chinese population on the left in 2000 and a projection on the right for 2050:

Chinese Population Pyramid Source: UN Population Division