The transition to the Obama presidency has everybody enthralled in this year-end, slow-news season. Fascinating as it is (I have been especially struck by the seeming requirement of being a basketball player to make it to the upper echelons of the Obama team), we may be missing the bigger picture here.

This may well go down as the year in which another transition was kick-started - to an altogether different type of international system.

The Russia-Georgia

war in August (marking the resurgence of Russia), the Wall Street financial meltdown in September (signalling an end to the go-go, unregulated capitalism launched in the Thatcher-Reagan era) and the G-20 meeting at leaders level in Washington in November (acknowledging the need for action on the global governance deficit ) all point in that direction.

The terrorist attack on Mumbai on November 26 also indicates that it is no longer just Uncle Sam and the North that are targeted by Jihadis, but also new emerging powers, such as India, whose progress and growth embody all that global Jihad abhors about the modern world.

Even the language of Western media lags behind - the Mumbai jihadists hailing from Pakistan are referred to by the BBC and United States (US) newspapers as "gunmen" (shades of Al Capone here), as opposed to the term 'terrorists' used for the likes of Mohammed Atta of 9/11 fame and the London subway bombers.

A recent report provides some signposts. Global Trends 2025: A Transformed World of the US National Intelligence Council, far from being the self-serving text, filled with impenetrable bureaucratic jargon such documents often are, is a serious attempt to look ahead.

Financial meltdown

At a time of great uncertainty caused by the financial meltdown, it is imperative not just to cope with the crisis, but to do so in a way that considers where we are heading to. Basic trends include the following:

1) The world is moving from the 'unipolar moment' of the last two decades or so, to a global multi-polar system. Although the US will remain as the leading power, it will be less dominant than in the recent past.

2) This will be the age of emerging powers. None more so than China, likely to have a greater impact than any other, but also of India and of Russia (although the latter faces some key obstacles). Other countries to watch are Brazil, Indonesia, Iran and Turkey. By 2040-2050, the BRICs countries (Brazil, Russia, India and China) will equal the gross domestic product of the original G-7 (the United Status, Canada, Germany, Japan, France, the United Kingdom and Italy).

3) The Western model of market democracies will find itself under an increased challenge from its alternative, a form of state capitalism that allows for a greater role of the state in the economy, something apparent in all emergent powers of the Global South.

4) This goes hand in hand with a rollback of privatisation and a resurgence of state-owned enterprises, as well as of Sovereign Wealth Funds. The latter reflect the massive, unprecedented transfer of wealth that is taking place from West to East, driven by high energy prices and by the shift in manufacturing locations to Asia.

Population growth

Globalisation (that is, the increased trans-border flows of goods, services, capital and cultural products) is likely to increase, as will conflicts over key resources like water, food and energy, driven by population growth (over the next 20 years 1.2 billion more people will be added) and higher demand by a growing middle class in the Global South that takes on Western consumer habits.

The impact of these trends will be uneven. Whereas the Asian giants (which in a way are only taking back their rightful place under the sun: in the late eighteenth century, China produced 30 per cent of the world product and India 15 per cent) and other emerging powers will be among the 'winners', sub-Saharan Africa (with the possible exception of Southern Africa) will be among the 'losers'.

Curiously, and despite its abundance of natural resources and relatively low population density, Latin America (with the exception of Brazil and a few others, among which I would put Chile) is forecast as among the regions that will continue to lag. Particularly worrisome is the reference to the Caribbean, where "drug-trafficking organisation will continue to undermine public security (and) a few small countries will verge on becoming failed states".

Slow economic growth

Europe, plagued by a declining population and slow economic growth, will stagnate, as will Japan. Some of the scenarios set forth are less credible than others. Whereas we might reach the 'tipping point' in climate change sooner rather than later, a 'BRICs Bust-Up', like a war between China and India, seems implausible at this point in time, with both Asian giants having become status quo powers keen to focus on their vast domestic needs and imperatives, rather than on carving up for themselves international leadership roles through war.

The Caribbean, because of its size and its traditional dependence on world markets for its prosperity and progress, is especially vulnerable to the changing patterns of globalisation and the severe discontinuities, surprises and unintended consequences of this era of rapid change. The margins of error will be reduced, and the need for the sort of leadership that understands an ever more complex world enhanced. This is a report worth reading.

The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.