This second scenario is marked by low energy prices, weak growth, and global disharmony. The United States and the European Union falter because their macroeconomic policies fail to address unsustainable budget deficits caused by rising transfer payments in the face of declining working age populations. At the same time, China is never able to establish the conditions for modern economic growth. The result is high volatility and low trend economic growth in the world’s biggest economies, driving down growth abroad with a debilitating impact on geopolitical stability. Low economic growth leads to low energy demand. Combined with new supplies of conventional and unconventional energy sources, energy prices drop sharply. This is a tumultuous multipolar world. Oil producers in the Middle East resort to desperate policies to retain power and Iran emerges as the regional power after a violent regional war. Russia experiences a revolution by disparate groups of aggrieved liberal parties. Asian countries form a new alliance to resist pressure from an aggressive China. Africa does not reap the expected rewards from oil production and many of the states are mired in conflict. The international community fails to adequately address the underlying problems.
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