Future surprises that could shock the world.

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First it was the 2008 global financial crisis. Then the Arab Spring. Then Brexit. International conventional wisdom always seems unaware of the big changes about to unfold. There are in the present few facts about the future. Ten years ago, for example, who would have predicted surprise developments such as negative interest rates, the potential breakup of the European Union, the Donald Trump/Bernie Sanders effect, drones, the use of driverless cars, the rise of ISIS, the myriad uses of artificial intelligence and big data, U.S. energy independence, the emergence of the Zika virus, or the rate at which robots are taking away jobs. TIE asked more than fifty top thinkers to look ahead ten years at what outside-the-box developments could shock the world.

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GARY CLYDE HUFBAUER

Reginald Jones Senior Fellow, Peterson Institute for International Economics

Not for me to speculate about drones or clones. Both will deliver surprises in the decade ahead, along with artificial intelligence, robots, magic materials, and cures for cancer.

Closer to my realm is the impending clash between economics and politics. It is questionable whether democracy as we know it can survive--if the next decade delivers the economic forecasts of Robert Gordon (meager productivity growth) and Larry Summers (secular stagnation).

"Democracy as we know it" means that dozens of voices must say "yes" before reforms that raise living standards can be implemented. It takes very few "no's" to stop the wheels of progress. This asymmetry is true for every form of public infrastructure--metro systems, airports, highways, bridges, transmission lines, and pipe lines. It is true for international trade. It is true for business taxes. It is true for educational reforms at all levels. And it is certainly true for entitlement reform.

Activists cherish our democratic systems that enable them to press the "no" button. At the national level, however, the resulting failure of economic progress creates a platform for voices offering drastic and misguided solutions. Stop the immigrants! Block the imports! Break up the banks! Medicare for all! Guaranteed individual incomes! Brexit!

One likely surprise from the clash is further breakup of the European Union. Also possible is greater concentration of power in the offices of presidents and prime ministers, enabling them to slash through obstacles that limit economic progress. If China powers ahead to 2026 while Europe, Japan, and North America stagnate, the "end of history" could be a Chinese model of authoritarian government.

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W. BOWMAN CUTTER

Senior Fellow and Director, Economic Policy Initiative, Roosevelt Institute

"Things fell apart. The centre did not hold. Mere anarchy was loosed upon the world ..." --William Butler Yeats (with apologies)

As we look back on the chaos of the last quarter-century, the year 2016 comes into focus both as the canary in the mine and as an early prime mover.

The two seminal events of that year--the candidacy and then election of Donald Trump and Brexit--both signaled and began a process of decline that unwound all of the progress of the post-World War II creation, to use former Secretary of State Dean Acheson's term. Trump was not quite the "extinction event" he was feared to be, but it was a "damn close thing" and he was an utter disaster as president. He set the United States and to some degree the world on a course from which we may never recover. Of significance way beyond his catastrophic policies, his trashing of every value for which, at its best, America stood initiated a long ugly era in which our public life became not much more than feudalistic thuggery. Brexit, for its part, kicked off in Europe and then around the world a process of disintegration in which the center not only did not hold, it disappeared.

Three themes defined this era: disintegration; aggressive, nativistic populism; and a contempt for the "common good." And the three complemented each other.

Disintegration and nativistic populism drove each other as international organizations collapsed and region after region demanded separate status.

Then, as these same forces precluded almost any intergroup compromise and governments, capacity to perform declined, politics became entertainment, and the very idea of a common good became impossible to sustain.

What surprised us all was the end of a belief in progress. We see ourselves today in a zero-sum world in which every gain is perceived as someone else's loss. We'll get out of this cycle, but it will take another generation.

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DAN MAHAFFEE

Vice President and Director of Policy, Center for the Study of the Presidency & Congress

So often in public policy and politics, changes that seem sudden often were the result of slow-moving trends that were too gradual to provoke an immediate response. Like the proverbial frog in the pot, the gradual increase in temperature isn't noticed.

Tomorrow's surprise in politics will be a shift in political alignment that upends the political spectrum in western democracies. Ten years from now and beyond, political parties will not exist in terms of the right-versus-left debate over the size and role of government as we understood it for much of the twentieth and early twenty-first centuries. Instead, the debate will be between those who advocate a far more global vision, and those that push for a more nationalist vision for the nation. In many countries, this will result in a greater divide between "globalist" cities and "nationist" rural and industrial areas.

The "globalists" will view free trade, international markets, and free flows of information and individuals as vital aspects of an increasingly cosmopolitan, globalized world. The "nationists" will seek to protect markets, avoid the instability seen with the wider world, and distrust the leaders in business and politics with global experience and vision. The early stages of this are seen via Trump, Brexit, and other far-right and far-left parties in Europe. Their rallying cry may be best exemplified by Michael Gove's statement during the Brexit campaign, "People in this country have had enough of experts."

This will challenge the political structures of many nations and will likely result in the fragmentation or realignment of many political parties. As a result, politics that is less about national vision and increasingly about group interest will likely be more combative, even by today's standards.

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ANDREW DEWIT

Professor, School of Economic Policy Studies, Rikkyo University

A decade ago, Japan was the developed world's basket case. And so it remains, desperate exuberance for "Abenomics" having given way to dismay at seemingly tepid structural reforms. Yet structural reform is in fact accelerating, especially in disaster resilience. A decade from now, Japan could be the global leader in disaster-resilient critical infrastructure, which includes transport, energy, water, waste, and telecoms.

Critical infrastructure is the core of the built environment and will be the focus of massive investment over the coming decades. Research by the Cities Climate Finance Leadership Alliance suggests that $93 trillion worth of low-carbon, climate-resilient infrastructure needs to be built by 2030. The required volume of resilient infrastructure greatly exceeds the present $50 trillion value of all global infrastructure.

There are two major reasons Japan is positioned to lead in this business. First, its "National Resilience" program is bigger and better organized than counterpart initiatives in North America, the European Union, China, and elsewhere. Japan's March 11,2011, disasters were not only history's costliest; they also taught Japan's public and private sectors an unforgettable lesson about the vulnerability of centralized power systems and other critical infrastructures. Japan has therefore become a world leader in collaborative planning and building resilience. Including both public and private sector spending, Japan's resilience program totaled over [yen] 24 trillion (US$220 billion) in 2013 and is projected to grow dramatically by 2020.

A second reason is that Japan has taken a strong role in opening up international lending. In November 2015, Japanese Prime Minister Shinzo Abe announced new measures to allow the Japan International Cooperation Agency to undertake sub-sovereign loans. These measures will help cities and other sub-sovereign actors in the developing world access direct financing for resilient infrastructure. A lot of it will be built by the Japanese.

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TAKESHI FUJIMAKI

Member, House of Councillors of Japan, and former Tokyo Branch Manager of Morgan Guaranty Trust Company of New York

The Bank of Japan goes bankrupt and a new Bank of Japan which is truly independent from the government will be established in ten years.

The Japanese government will issue [yen] 152 trillion of JGBs this fiscal year. Of this, the Bank of Japan will buy [yen] 120 trillion. Though the government denies it, this is clearly monetization of debt.

It is said that the Bank of Japan will stop its bond buying operation when the CPI reaches 2 percent. However, the government will insist that it continue to buy JGBs and print money. Otherwise, Japan will become like Greece, whose central bank could not help the government. The euro is allowed to be printed only by the European Central Bank and not by the central bank of Greece.

I expect a battle between the government and the Bank of Japan to break out.

The Japanese government will strongly pressure the Bank of Japan to continue to buy JGBs. If an institution that buys 80 percent of the supply stops buying, then any market, including JGBs, will definitely collapse. It would mean that the government will not be able to conduct the auction at a reasonable level, and thus will not be able to execute its budget.

This will lead the...

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