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FORBES April 2013

Download FORBES Indonesia April 2013

by Jennie S. Bev

This column is the first of two parts, the second will appear in
the May issue.

Living in a
modern society involves risks and some are bigger than others. In 2020, the
world shall encounter an important milestone: make it or break it. According to
economist Thierry Malleret, by that year the six global megatrends will be engendering
worldwide instability: unfavorable demographics, resource scarcity, climate
change, geopolitical rebalancing, indebtedness and fiscal issues, and rising
inequalities.

The world
population is aging. In developed and certain Asian countries, the birth rate
is falling. Of course, Indonesia isn’t included, which is both a pro and a con.
Approximately 4 million are born in Indonesia annually, which is almost the
size of Singapore. Singapore itself is losing population rapidly, which it
attempts to offset with encouraging immigration policies and supportive “pro
baby” taxation provisions.

Japan’s
labor force started to shrink in the 1980s, while South Korea and Taiwan will be losing
population within 15 years. If Indonesia can manage its population well with meaningful
social and vocational developments, it has an unprecedented opportunity to
penetrate various job markets in Asia and, even, worldwide. The trend of elite
“national plus” bilingual and trilingual K-12 schools is a good start in cultivating
young leaders with an international attitude. The Philippines and India have
been capitalizing on this trend. The former is now multinational corporations’
favorite destination for offshore call centers, while the latter is for
offshore IT desks.

Resource scarcity
is another serious issue to tackle. As more stresses are placed on the globe’s
megacities, resource scarcity will be more prevalent. Increased demand for
food, water, energy, land and natural resources has been
exponentially amplified in an unprecedented manner. Since 2002,
technological advancement and human inventiveness is fighting a losing battle
with the law of diminishing returns.

According to
forecasts by the IMF and the World Bank, Asia’s economic output will be
sixfold of today’s, from $30 trillion to $230 trillion by 2050. Such an
increase in GDP per capita would impose more stress on global resources
due to intense consumer consumption. The U.S. Food and Agriculture Organization
also predicts a 40% deficit between water supply and demand by 2030.

The third
trend is the extreme climate change that results in a negative impact on many
planetary conditions, including ocean chemistry, air quality and climate. The
oceans are being acidified with the nitrogen and phosphorus elements in food
fertilizers leaking into bodies of water. Increased number of automobiles results
in increased air pollutants. By 2050, there will be 3 billion cars worldwide.

Recent
worldwide severe winter storms, for instance, might be caused by Arctic warming
that has shifted wind patterns. Extreme climate changes would cause increased food
prices and conflicts as communities and countries battle for access to shifting
areas of arable land.

Many
economists believe that world economy isn’t a zero-sum game because the total
sum is much greater than its parts. However, it is more realistic to calculate
not merely the present measurable production, but also the social debts
incurring in the future.[]

Forbes Indonesia, April 2013

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