Terror of uncertainty and the demographics of anxiety

People attack and try to stop a Turkish police armored vehicle, carrying Turkish soldiers that participated in the coup and surrendered, backdropped by Istanbul's iconic Bosporus Bridge | AP

Wandering between two worlds, one dead, the other powerless to be born.

-- Matthew Arnold, Stanzas from the Grande Chartreuse

The images—of the standoff between Turkish soldiers and Turks on the bridge across the Bosphorus —is riveting in its symbolism. The Bosphorus has been a witness to change and history, from the fall of Constantinople and consequently the Roman Empire to the Rise and fall of the Ottoman Empire. This week, it was witness to the emerging contest between order and anarchy. It would be erroneous to assume that the contest is limited to one or a few geographies. Across the time zones, the face-off is cloaked in varied causes. Frequently, consequence masquerades as the cause.

The discourse about the many isms—Islamism, socialism, communism, capitalism, feudalism and racism—is focused on pixels of a larger canvas that is unfolding. For sure each ism has contributed its mite in perpetuating disorder, but the blame game often evades the crux—for instance, the collaboration and cohabitation of extreme ideology and authoritarian regimes and the status of “allies” bestowed on them. Think Pakistan, think Saudi Arabia.

Individuals matter, but have they mattered? Every week of the past month has provided an episode to ask this question. The systemic funk in the terror attack in Nice, France, is reminiscent of that which inhabited India around 26/11—then the dark humour was about a minister who was a serial dresser; here it is about the $10,648 hair-do bill. Seriously, how could a state in emergency not recognise the threat represented by a large truck on a cordoned off promenade?  How does one explain the angst that drives “Black Lives Matter” in a presidency that was about inclusion, led by the first black president? And what explains the rise of Trump? In Britain, the optics-conscious Prime Minister David Cameron, elected with a majority, could not prevent naked bigotry and isolationism from winning.

The narrative is stranded between individual and institutional failing. Institutional failure has frustrated engagement and outcomes that could have helped evolve new structures for the new reality.  Look at the state of global institutions that could drive

interventions—the failing WTO and the flailing United Nations are stark examples. It is about abject apathy, the lack of commitment on issues that matter—do we know any more than earlier about the flights that went down, about millions being driven out of Syria, about children disappearing in Africa? The theory is that well-regulated markets reward productivity and innovation. But the global capture of policy, it would seem, has subverted the apportioning of gain and pain—that is, wealth has been cornered by the top segment.

Aggravating the issues of individual and institutional failure is a new emerging reality. The glacial process of changing demographics is at an inflection point. Changing demographics is at the heart of many political, social and economic issues faced by countries —the many fault lines that lay dormant for decades are now exposed like a raw wound and impact both geopolitics and the politics of economics.

The facts are telling. Between now and 2050, world population will rise from 7.3 billion to 9.7 billion, that is an addition of over 2.4 billion. The population in the developed world will barely rise —from 1.25 billion to 1.28 billion. The bulk of the increase of over two billion will be in the poor and less developed countries. Essentially the developed world is acquiring dependency while the less developed poor countries will be hard put to find jobs to the burgeoning workforce. Strangely, governments have refused to engage on this and chosen to live in denial about its implications. The terror of uncertainty is being propelled by the demographics of anxiety.

The impact of this is visible in the global economy and on the charts of global debt and deficit. Rising dependency has pushed up the debt of ageing nations, hurt consumption and investment, lowered growth rates and has set the stage for what Larry Summers has eloquently described as “secular stagnation”. It is no surprise that currently over $11 trillion of government bonds are yielding negative returns.

The anxiety in the developed economies is about the future.

The story in the advanced economies is best related by a recent study by McKinsey Global Institute. It reveals that “two-thirds of households in 25 advanced economies— affecting over 540 million persons—have incomes that are flat or lower than what it was in 2005 and that longer term demographic risks will weigh on “income advancement” in the future. Worse, the younger generation is at the risk of “being poorer than their parents”.

In the poorer countries with the workforce bulge, the anxiety of the youth is about the present, about survival. In an earlier era—when the advanced economies were blessed with growth thanks to consumption by baby boomers—the poorer ones could create low-skilled jobs for the youth bulge. There was the thesis that low-income economies could migrate to higher per capita income by investing in manufacturing and supporting export promotion. This hope, however, has been laid to rest by the reality of premature deindustrialisation. There simply isn’t enough demand for more factories and ergo not enough jobs. The context of global economics deters the replication of either China or the tiger economies. And the challenges are only expanding. There is the threat from the new economic models that threaten to disrupt and even dismantle existing ones. There is also the disruption that technology promises and which governments must contend with.

The series of shocks witnessed by the world in the past few years are about extreme ideology, about repressive authoritarian regimes, about the deployment of perverse state craft to evade reality. It is also about the inadequacy of global leadership—the absence of a Gandhi, a Mandela to reconcile differing views, the dearth of an FDR and even Reagan to evangelise public opinion to bury the evil and promote the idea of prosperity.

The eloquence of Matthew Arnold’s words, penned in 1855, reflects the real challenge that haunts the world in the 21st century. The ageing order isn’t dead, but it is undeniably struggling even as new order is yet to be born.

 shankkar.aiyar@gmail.com