Cape Town - It seems most of the reaction to the Brexit vote is just about what the consequences could be "now", while no-one is looking at what the European Union (EU) could look like in five to ten years’ time, scenario planner Clem Sunter said on Thursday.
He sees the Brexit vote as part of one of the mega trends in the world he has flagged to watch for scenario planning purposes. He calls this warning flag the anti-establishment flag.
"The middle class is angry with the super wealthy," said Sunter as guest speaker at a business seminar hosted by financial services provider deVere in Cape Town.
"Of course the poor have always been angry, but it is when the middle class gets angry that things change."
He sees the rise of Donald Trump and Bernie Saunders on the US political scene as further results of this "anti-establishment" flag. In South Africa he sees the violent riots in Tshwane as well as other incidents, for instance at the University of Johannesburg and on the N2 in Cape Town, as further signs of the anti-establishment flag.
"These violent incidents are dangerous as they can lead to a country being regarded as a so-called failed state. If South Africa is viewed as a failed state, it means it will be regarded in the same way as, for instance, Libya and Somalia," said Sunter.
He added that, although he has given SA a higher chance of becoming a failed state in the past, he now gives it a 10% chance of happening. This is due to having been convinced by political analysts that SA has strong enough public institutions to prevent the country from sinking into a failed state status.
At the same time he gives a 45% chance each to SA finding itself in the "premier league" or in the "second league".
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Economic Codesa
"SA needs an economic Codesa, not just the implementation of the National Development Plan (NDP)," emphasised Sunter. This is because, in his view, the key to economic growth in SA lies in allowing entrepreneurs and SMMEs to flourish.
He said he tries to capture the mega trends which could change the world. It is important not only to pick up these mega trends, which are changing the game, but to be agile in responding to them.
"Most strategic decisions are about what life will be like in five to ten years’ time. Therefore, about which direction and tactical decisions are about how to get there," said Sunter.
"Therefore, the current context is not meaningful, but rather about what you project the consequences of the current situation will be."
Apart from the anti-establishment flag, there are a number of other mega trend flags he is watching on the world stage. One of these is what he calls the "religious flag", which he has picked up on since the 1980s.
"This is a difficult flag to do scenario's on and I do not think the Americans have as yet understood the nature of this flag. They still think they can use a purely military approach," said Sunter.
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"I support the Chilcot report which says there was no end game about improving the lives of people in Iraq and if their lives are not improved there will be radicalisation. It should be about creating a better life in the Middle East and not just about bombing."
Another flag is the "red flag" relating to the actions of Russian President Vladimir Putin. Should one build nuclear conflict scenario's is the question to ask, according to Sunter.
"Keep your eye on Putin and also on what China is doing in the South China Sea. There is a second Cold War going on."
Grey flag
Another flag is the "grey flag" of the aging population of the world and its resulting economic consequences. Looking after the elderly could, for instance, consume 40% of the US budget in future and the Japanese economy is likely never to grow again because of it, in his view. Europe is moving in the same direction.
In the US, on the other hand, the youth are growing and that is to Sunter the difference between the US on the one hand and Japan and the EU on the other hand. This flag impacts even on China, which has the fastest aging population on earth due to its one child policy and this will affect the pace of its economic growth.
At the same time Sunter cautioned that a country does not only need a young population per se, but also needs good governance.
"The world is back to a low economic growth path - unless some new technology comes along to kick-start growth again."
A last, but very important mega trend to watch, in his view, is the climate change flag, which is deemed to be the second biggest security threat to the US, while it brings the need for smart water management in SA.
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