Geopolitics: 2000 years of long-term charts

DeutscheBankResearch Geopolitics:2000yearsoflong-termcharts JimReid HeadofGlobalEconomics&ThematicResearch(+44)-20-7547-2943 jim.reid@db.com AdrianCox +44-20-754-17775 adrian.cox@bd.com GalinaPozdnyakova +44-20-754-74994 galina.pozdnyakova@db.com Distributedon:10/03/202421:03:06GMT March2024 HenryAllen +44-20-754-11149 henry-f.allen@db.com CassidyAinsworth-Grace +44-207-547-0142 cassidy.ainsworth-grace@db.com DETAILS. IMPORTANTRESEARCHDISCLOSURESANDANALYSTCERTIFICATIONSLOCATEDINAPPENDIX1.MCI(P)041/10/2023.UNTIL19thMARCH2021INCOMPLETEDISCLOSUREINFORMATIONMAYHA7VTE2BsEeE3Nr0DOIStP6LkAwYoEPD,aPLEASESEEAPPENDIX1FORFURTHER Theworld’stectonicplatesofpowerchangeslowly butdramaticallyovertime Worldeconomicpowershiftsovertime.Therelativegrowthanddeclineofcountries/empiresoftenleadstoglobaltensions.WhileChinahasbeengrowingrapidlyinrecentdecades,thatgrowthisjustrestoringitclosertoitsplaceformuchofeconomichistory,apositionitfeelsisthehistoricalnorm… GlobalGDPsharesthroughhistory(PPPterms) Europesawconstanteconomic FormerUSSR 90% 80% andpowershiftsthroughoutthisperiod. LatinAmerica Japan Africa 70% 60% 50% 40% France,Germany,Italy,UKandSpain India USA 30% 20% 10% China 0% 125050075010001250150017502000 Source:MaddisonDatabase,IMF,DeutscheBank WorkbasedaroundGrahamAllison’s“Thucydides’Trap”analysisshowsthatoverthepast500years,tensionsbetweenarisingpowerandarulingonehaveendedupinwaronmostoccasions. Howtherelationshipbetweenarulingpowerandarisingpowerhasunfolded over500plusyears.. RULINGPOWER The Dutch UKFrance FranceUK Soviet US Portugal France TheHapsburgs Hapsburgs Republic France France UK ChinaRussiaUK UnionUS 1490s 1500- 1559 1500- 1699 1619- 1648 1648- 1688 1680s- 1815 1831- 1856 1860- 1871 1870s- 1905 Early20thcentury 1914- 1918 1939- 1945 1939- 1945 1945- 1990s Spain TheHapsburgs Ottoman Empire Sweden England GreatBritain Russia Germany Japan USGermany Germany Japan SovietUnion RISINGPOWER LEGEND NOWARWARVICTOR Source:Allison,G.(2017)‘DestinedforWar:CanAmericaandChinaEscapeThucydides’Trap?’,HaughtonMifflinHarcourt,DeutscheBank. China’sGDPrapidlycaughtupwiththeUSfromaroundtheGFC...Bylate2020,itwasontracktoovertaketheUSinUSDtermswithinadecade…Butsincethen,slowinggrowthinChina,andfastergrowthintheUShaslikelyslowedthis.TherapidpostGFCcatch-uphadbeenattheepicentreofthedeterioratingUS/Chinarelationshipandtheirrelativeperformancegoingforwardwilllikelycontinuetodefineit… China’sGDPasashareofUSGDP(USDterms)withIMFforecasts 100% 90% 80% 70% Oct2020Forecast Oct2023Forecast 60% 50% 40% 30% 20% 10% 0% 19901995200020052010201520202025 Source:IMF,DeutscheBank Demographicshavealwaysshapedgeopolitics,ashavingmorepeopleprovidesnationswithgreatereconomicandmilitarypower.Overthelastseveralhundredyears,thechangingsizeofmajorpowers’populationshasbroadlycoincidedwithshiftsinrelativepower,oftenresultinginconflict. Populationsize(thousands)ofmajorwesternpowers1500-2000,logscale France Germany UK Spain USA Forseveralcenturies,Francehadthe biggestpopulationinWesternEurope,enablingittopursueexpansionistambitionsunderLouisXIV,andlaterNapoleon. TheexplosionintheUS populationhelpsitemergeasthedominantglobalpowerbytheearly20thcentury. England,andlatertheUK,isonlyasmall regionalpoweratthestart,butitspopulationcatchupinthe18thand19thcenturieshelpsbringittotheforefrontandcoincidedwiththeexpansionoftheBritishEmpire. Germanyovertakesthe Frenchpopulationinthelate-19thcentury,givingthecountrymuchgreatermilitaryandeconomicweightinthe20thcentury. 320,000 160,000 80,000 40,000 20,000 10,000 5,000 2,500 15001550160016501700175018001850190019502000 Source:MaddisonDatabase,DeutscheBank Lookingforward,theworldwilllikelychangedramaticallyagainwithinourlifetimes.WeareexactlyatthepointwhereChina,IndiaandAfrica’spopulationcrossandallgoonpotentiallyverydifferentjourneys.Fornow,IndiahasfarmoreeconomicmomentumthanAfricaintermsoftakingadvantageofthepotentialdemographicdividend.Weexpectthischartwillshapeglobalgeopoliticsgoingforward... Population(billions)ofmajorregions/countries,withpredictionsto2100 Africa 2022:PopulationsofChina, IndiaandAfricaconverged. India China Europe MiddleEast US Billions 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 195019601970198019902000201020202030204020502060207020802090 Source:UNPopulationDatabase,HaverAnalytics,DeutscheBank.Note:Takesthemediumfertilityforecast. •Asanexampleoftheshiftinggeopoliticallandscapethroughhistory,intheappendixonpages34- 54weshowmapsofEuropeeverycenturyfrom1000to1700,andthenwithmoreregularfrequencyfrom1780asthemodernworldemerges.Itincludesashortsummaryofthemajorchangesthatoccurredbetweeneachpoint. •ThemapsshowthatEurope’sbordershaveconstantlychangedoverthelastmillennium,withrepeatedconflictsdrivenbyforcessuchasmonarchicalrivalries,dynasticclaims,religiousdifferences,andeconomictensions.Overthattime,statesandempireshavecomeandgone. •AfterWWII,6countriesinWesternEuropemovedtoaligntheireconomicandpoliticalinterests,withthecreationoftheEuropeanCoalandSteelCommunity.Coalandsteelwereimportantformilitary