Forecasting the Baltics’ future security environment

Every few years, the U.S. National Intelligence Council (NIC) publishes studies of how the world might evolve over the next two decades. Global Trends 2030: Alternative Worlds, released in December 2012, is the latest such iteration.

Its four scenarios include one in which the United States turns inward and economic globalisation stagnates (“Stalled Engines”); one in which non-state actors like activists and corporations assume the lead role in addressing international challenges (“Nonstate World”); a best-case world in which China and the United States catalyse global cooperation on a range of problems (“Fusion”); and a worst-case future of growing inequality and conflicts between and within countries (“Gini Out-of-the-Bottle”).

The NIC’s goal is not to predict in detail the world of any future year. The Global Trends series strives to provide a framework for stimulating strategic thinking about the most important critical trends and potential discontinuities that could shape alternate future worlds. The studies distinguish between mega-trends (those driving factors that will likely occur under any scenario) and game-changers (critical variables whose occurrence and impact are considerably less certain). The authors also recognise that national and human choices will affect the evolution of these trajectories—which is why they undertake this comprehensive quadrennial exercise.

Global Trends 2030 builds its scenarios on the basis of the following “ mega-trends”: individual empowerment, diffusion of power, demography, and the food-energy-water nexus. In earlier Global Trends studies, the other drivers have included elements of globalisation, the rise of new great powers, international institutions, climate change, and the geopolitics of energy. In addition to assessing how these mega-trends might affect global conditions in isolation, the NIC also speculates how the drivers might interact in complex and largely unpredictable ways.

In Global Trends 2030, the game changing drivers, whose advent is much less certain than the mega-trends, include a crisis-prone global economy, a governance gap, increased intrastate and interstate conflict, wider regional instability that extends beyond the Middle East and South Asia, the impact of new technologies that help solve global challenges, and the role of the United States in a future world.

The authors are also not reluctant to conjecture how surprising global developments (e.g., more or less climate change, and higher or lower world oil prices) might affect various countries. The Global Trends authors have increasingly sought to highlight such “Black Swans”—low probability but high-impact events that could move the world onto completely different trajectories. In Global Trends 2030, the potential Black Swans are a severe pandemic, much more rapid climate change, an euro/EU collapse, a democratic or collapsed China, a reformed Iran, a nuclear war or WMD/cyber-attack, solar geomagnetic storms, or a sudden and comprehensive U.S. disengagement from the world.

Although the NIC can only make indirect policy recommendations to the rest of the U.S. government by citing what other experts and governments say about the United States, other institutions can offer more direct comments. In parallel with the appearance of Global Tends 2030, the Washington-based Atlantic Council published a report, Envisioning 2030: US Strategy for a Post-Western World, which offers concrete policy recommendations on how the United States can work with other countries to avoid the worst of these scenarios and, ideally, move towards a better world. The report urges Washington to “actively, vigorously, and strategically” cooperate with other countries, either bilaterally, as with China, or in multilateral coalitions, as within NATO. With respect to the latter, the Atlantic Council report calls on the Obama administration to “reinforce its strategic base: the transatlantic relationship.” As an example of this reinforcement, the report advocates negotiating a U.S.-EU free-trade agreement to create an integrated transatlantic market.

In November last year, the Council on Foreign Relations in New York released a working paper on “Democratic Internationalism: An American Grand Strategy for a Post-exceptionalist Era,” by Daniel Deudney and John Ikenberry. The paper calls on the United States to work more closely with European countries and other democracies to strengthen the democratic community as well as to restructure and fortify international institutions that support its principles and values by making it easier for rising democracies to assume leadership within them.

As part of NIC effort, the team of analysts, led by Dr. Mathew Burrows, Counselor and Director of the Analysis and Production Staff at the NIC, solicits insights from various foreign and domestic experts, including by attending meetings in some 20 countries. Burrows confirmed to me before one Global Trends 2030 rollout that the NIC did not devote any particular attention to the Baltics in its recent work, but he agreed that the NIC’s analysis of Russia and Europe would be especially relevant in affecting the future of the Baltic region.

Baltic-based scenarios

Some other future works have focused more directly on the Baltics. According to Christian Ketels, author of a 2008 presentation on “The Role of Regional Collaboration in the Baltic Sea Region of the Future,” the most likely scenario during the next few decades will see the Baltic Sea Region (BSR) continue to outperform the rest of the EU, but will lose relative global economic weight. Furthermore, the convergence of the Baltic countries, Poland, and (with some uncertainty) Russia to the Nordic levels of prosperity is likely to continue. Over the next 15 years, moreover, demographic trends will first increase the active population and per capita GDP levels in the eastern part of the BSR, but then the trend lines shift due to aging affecting more of the BSR’s population.

Ketels concluded that the best-case scenario for the BSR would be if Russia, the EU, and the Nordic countries all had strong and open market economies; and if the BSR simultaneously increased collaboration and integration internally and with neighboring regions. In such a scenario, the Baltic region would catch up with West European economic conditions and hold its own relative to the rest of the world.

Conversely, the worst-case scenario would see Russians opt for economic nationalism, the EU fail to regain dynamism, and the Nordic countries attempt to defend rather than modernise their traditional socioeconomic institutions and policies. Under this scenario, the Baltic region barely holds its position within Europe and falls behind global averages. Top global performers and companies would shun or leave the BSR, which would constantly fear Russian predations and abandonment by the rest of Europe and the United States.

It is noteworthy that, even in such Baltic-focused futures studies, the prosperity and security of the Baltic states depend heavily on the future trajectories of Russia and Europe. Another recent Baltics-based futures exercise, the August 2010 report on “TransBaltic Scenarios and Foresight 2030,” concluded that, “in the case of the Baltic region, the political evolution of Russia and former USSR republics, and the enlargement processes of Europe are also of extreme importance.”


Russia has become a key swing state in shaping the world’s future. A Russia that truly embraced the principles of liberal democracy and the free market could, by rebuilding its science and technology sector, become a pillar of a prosperous future world. Conversely, an authoritarian Russia based on a system of corrupt capitalism will remain alienated from the more dynamic centers of the world economy and instead concentrate on building a Eurasian empire among the former Soviet states. In this latter scenario, while losing relative economic and military power over time, Russia would remain a potential spoiler to international security and prosperity.

Global Trends 2030 lays out three possible ways Russia might relate to China and the West in coming years:

1. Russia partners with others, though most likely in a marriage of convenience, not of values.

2. Russia continues its ambivalent relationship with the other powers, but international cooperation is harmed by Russia’s rebuilding its military strength and contending with growing Chinese power.

3. Russia becomes a very troublesome country, using its military to intimidate and dominate neighbors, as a Russian leader tries to displace discontent over sagging living standards and economic prospects by rallying nationalist sentiments through assertive foreign policies.

Russia will probably continue to experience severe demographic problems in coming years. According to Global Trends 2030, Russia is likely to experience a loss of 10 million people during the next two decades. The Russian population is expected to fall from approximately 143 million people in 2010 to less than 130 million by 2030—a greater net decrease than in any other country. Russia’s workforce has been declining in size since 2007; this trend will probably continue for the next two decades.

A loss of this magnitude will make it even more difficult for the Russian military to sustain its million man army, with a majority of the recruits already coming from compulsory military service. Russian leaders have evinced a strong reluctance to allow for more non-Russian immigration, to allocate the resources needed to develop a fully professional army, to accept a substantial reduction in the size of the Russian armed forces, or to take additional necessary measures to manage this demographic problem.

In addition, the share of ethnic Muslims in the Russian population is projected to grow over time. At present, Russia’s 20 million Muslims compromise some 14 percent of the country’s population. By 2030, this share is projected to increase to around 19 percent. The military skills and willingness of Russian Muslims to participate in future counterinsurgency campaigns in the Muslim-majority regions of the North Caucasus or Central Asia will prove questionable.

Russia’s one demographic advantage is morbid. Massive consumption of alcohol and tobacco, frequent deadly accidents, and other bad behavior means that many Russian men die before they become old. Russian life expectancy is some 15 years lower than for Europeans. The effect is to slow the advance of the median age and the number of retired workers in Russia as compared with other countries.

Nevertheless, Russia’s per capita GDP will likely average half that found in the more developed EU countries. In fact, Global Trends 2030 describes the Russian economy as that country’s “Achilles’ heel.” Russian exports are heavily concentrated in the volatile energy sector. Years of attempts to modernise the economy, reduce corruption, boost productivity, attract more foreign investment, and so on, have all failed to have a major impact. When world energy prices are high, Russia experiences strong growth and revenue. When oil and gas prices are low, the Russian government is unable to balance its budget.

Interestingly, Russia has a potential positive wild card through its recent entry into the World Trade Organization (WTO), which could impart a considerable boost to Russia’s economy growth and diversification, helping reverse Russia’s growing dependence on oil and gas exports—from less than one-half of total exports in 2000 to two-thirds in recent years—at a time when the global energy revolution could easily push the value of these commodities sharply downward.

Global Trends 2025, which was published in 2008, offered a detailed analysis of the problems plaguing the Russian political system. As the NIC authors point out, one-party states under the control of a single dominant individual are prone to serious secessionist crises. In addition, Russian policy making suffers from an uneasy coexistence of “liberal economic trends and illiberal political trends.” Furthermore, “the tension between the two trends—together with Russia’s sensitivity to potential discontinuities sparked by political instability, a major foreign policy crisis, or other wild cards—makes it impossible to exclude alternative futures such as a nationalistic, authoritarian petro-state or even a full dictatorship, which is an unlikely but nevertheless plausible future. Less likely, Russia could become a significantly more open and progressive country by 2025.”

The Atlantic Council’s Envisioning 2030 report updates this assessment by noting how Russia’s growing middle class is challenging Putin’s authoritarian system. The authors estimate that this new middle class has more than doubled in size since Putin was elected president for the first time in 2000, and now amounts to about a quarter of the Russian population. During this period, rising world prices for Russian oil and gas exports have more than doubled Russians’ average per capita income to some $16,000. Russians can now more easily access the Internet and travel abroad. This kind of population is much less enthusiastic about accepting a repressive authoritarian political system and has been a powerful force for making Russia into more of a genuine liberal democracy integrated more closely with Europe.


Europe is one of the world’s most unique regions. The EU has the most concentrated pattern of region-centric trade and investment in the global economy. Almost two-thirds of European trade stays within the EU; whereas for NAFTA, East Asia, and Latin America the percentages of intra-regional trade and investment are ten or more percentage points less. The EU and NATO are also unique in the extent to which they coordinate their members’ foreign, economic and defense policies towards other regions, including the promotion of democracy in North Africa, encouragement of stability in Afghanistan, and nonproliferation sanctions against Iran.

Under some of the NIC future scenarios, such as “Slow Decline,” even in the face of a threatening Russia, Europe’s slow economic growth, aging populations, more euro crises, popular indifference and animosity, and lack of an effective unified foreign policy apparatus would reduce economic and security support of the Baltic states by creating “a more inward-focused and less capable Europe.” But under others, such as “Renaissance,” European leaders take the euro crisis as a wake-up call and force through major political and economic reforms at the national and EU levels. This “federalist leap” results in Europe sustaining its position as a major component of the international economy and one of the few major geographic actors that export security to other regions—in this case the Balkans, Africa, the Middle East, the South Caucasus, and Central Asia.

The NIC speculates that the aging and immigration drivers could have a particularly disruptive impact on European politics. The former will reduce the size of the European labor force and the number of non-working citizens, developments that can reduce government tax revenue while increasing spending on pensions and health care. Furthermore, a Pew Foundation report cited in Global Trends 2030 forecasts that, due to their higher birth rates as well as further immigration, the percentage of Muslims in Europe could reach 8 percent by 2030. At home, this development could disrupt the cohesion of European societies and provoke more reactionary anti-immigration politics. They would also reduce the number of European troops available for foreign military missions. Sending European forces into regions from which most immigrants come could prove especially problematic.

According to the NIC’s projections, the Goldman Sachs “Next Eleven” group of rapidly developing middle-tier countries—consisting of Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, South Korea, Turkey, and Vietnam—will collectively start to exceed the EU’s global economic power by 2030. In the NIC’s view, Europe’s future economic prospects are hindered by the slow growth of its labor force; the high costs of its workers as compared to its foreign competitors; its high national debts; Europeans’ declining productivity relative to other developed economies; low spending on researching and developing new capabilities; and the red tape and bureaucratic complexities of the EU governments, individually and collectively, as manifested most visibly in the flawed euro currency system. A tension exists between the economic measures needed to strengthen the euro—the transfer of decision making power and resources to EU central bodies—and the political atmosphere of anti-EU populism in many of its member states, which already resist ceding any more national autonomy to Brussels (seen most recently in Great Britain, where the government has said it will hold a referendum by 2017 on whether to remain in the EU).

Conversely, one of the few advantages that Europeans will have over these rising countries as well as over Russia and China will be in the domain of some of the newer types of power—such as the increasingly influential new multifaceted networks that, empowered by new communications technologies, will enable individuals, NGOs, companies, and other non-state actors to shape many international trends and outcomes.

The NIC notes that Europe’s ability to take advantage of the global energy revolution will be affected by the different national attitudes and policies towards nuclear power, hydraulic fracking, and other ways of producing energy. In general, the EU’s eastern members such as Poland are most open to any means, while the West European governments are more concerned about the potentially adverse ecological impacts of certain forms of energy. These divergent approaches will make it harder for the EU to pursue well-integrated energy policies.

Although the NIC considers it unlikely that any major wars will occur on European territory during the next two decades, European security will be challenged by threats emanating from other regions—transnational terrorism, WMD proliferation, cyber-attacks and cyber espionage, and regions of state failure and instability. But Europe’s adverse socioeconomic trends will make it difficult for EU governments to sustain high defense spending and risk foreign military interventions, even in neighboring regions from which these threats emanate—the Middle East, Africa, and Eurasia (which includes Afghanistan as well as Central Asia). EU and NATO members would be able to mitigate the negative effects of budget cuts if they can more effectively integrate European defense resources, but past and current efforts at pooling, sharing, niche specialisation, smart defense, and so on, have yet to achieve major breakthroughs. A more plausible goal would be to keep France (which only rejoined the Alliance’s military command a few years ago) and Turkey active NATO contributors; the Alliance would benefit from France’s global power projection forces and Turkey’s rising influence in key world regions.


These reports underscore the interlinking fates of Europe, Russia, and the United States. For this reason, the Atlantic Council report calls on the Obama administration to cooperate with Europeans “to create an environment conducive for Russia to move in a direction of modernisation, greater integration with the EU and NATO, and cooperation on global issues.” Although the Baltic states, due to their modest size and resources, can play only a limited role in this process, they would perhaps benefit the most from such a future world.



Global Trends 2030: Alternative Worlds

Stalled Engines

  • The US and Europe are no longer capable or interested in sustained global leadership.
  • Corruption, social unrest, weak financial systems and chronically poor infrastructures slow growth rates in developing world.
  • The global governance system is unable to cope with a widespread pandemic: rich countries wall themselves off from many poor countries in Asia, Africa, and the Middle East.
  • By disrupting international travel and trade, the severe pandemic helps to stall out, but does not kill globalisation.


  • The specter of a spreading conflict in South Asia prompts the US and China to intervene.
  • Washington and Beijing find other issues to collaborate on.
  • Emerging economies grow faster than advanced economies, but GDP growth in advanced economies also accelerates.
  • Technological innovation is critical to the world staying ahead of the rising resource constraints that result from the rapid boost in prosperity.

Gini Out-of-the-Bottle

  • Inequalities within countries and between rich and poor countries dominate.
  • The world is increasingly defined by two self-reinforcing cycles—one virtuous leading to greater prosperity, the other vicious leading to poverty and instability.
  • Major powers remain at odds; the potential for conflict rises.
  • An increasing number of states fail. Economic growth continues at moderate pace, but the world is less secure.

Nonstate World

  • New and emerging technologies that favor greater empowerment of individuals, small groups and ad hoc coalition spur the increased power of non-state actors.
  • This is a patchwork and uneven world.
  • Some global problems get solved because networks manage to coalesce and cooperation exists across state and nonstate divides.
  • Security threats pose an increasing challenge: access to lethal and disruptive technologies expands to terrorists and criminal actors.


Disclaimer: This article was brought to you in collaboration with Estonian foreign policy magazine Diplomaatia:

The opinions in this article are those of the author.

Cover photo: RAF Tornado GR4 by Peter Gronemann/Wikimedia

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