As pressures mount to combat the effects of global warming and pollution, it is easy to imagine a future where alternative energy sources play a more prominent role. This trend, however, will be difficult for businesses located in petro-dependent economies in the Middle East, Africa and Latin America. Many of these states experienced significant economic, political and social challenges when oil fell between 2014-16.

There are petro-states that have used this wake-up call as the impetus to revamp their economies, particularly those in the Gulf Cooperation Council (GCC). Saudi Arabia’s Vision 2030 program, for example, aims to increase the private sector contribution to GDP from 40% to 65% and increase non-oil government revenue from SAR 163 billion to SAR 1 trillion. The states that don’t diversify their economies away from hydrocarbon revenue, will risk being left behind.

In a world powered by renewables, water stress may become the primary resource challenge. Hydro-politics could become an important issue for a number of the world’s states. Dam building, industrial water pollution, and potential neglect of water cooperation agreements could threaten geopolitical security.

  • A National Intelligence Council report highlights that around 50% of the world’s 263 international river basins do not have a management agreement. Without clear guidelines on water management and cooperation, it is likely that more regions will be incubated for future conflict.

Even as weather patterns create supply concerns, demand driven by population growth and a rising middle class is exacerbating the issue. Water demand globally is expected to increase globally 55% between 2000 and 2050.

Future themes - Picture 05

Escalating Uncertainties: Up close

The future will be determined by those who are willing to reinvest, adapt and turn future threats into opportunities.