The global middle class will move from being roughly a quarter of the world’s population today to being more than half within the next 30 years, a speaker told the CFA Institute conference in Vancouver today.

The world can be divided into two groups, according to Thomas Barnett, senior managing director of Enterra Solutions LLC and author of the forthcoming book Great Powers: America and the World After Bush. The first is those regions that have fully integrated and the second is those regions that have not. The first includes North America, Europe, Russia, Australia, and parts of South America, while the second includes Africa, the Middle East, and southeastern Asia. Interestingly, Barnett noted that the overwhelming majority of U.S. military engagements since 1990 have occurred in the world’s unintegrated regions.

In his presentation at the 61st annual CFA conference, Barnett told the audience that globalization can act on a regional basis to reduce the number of countries that have not integrated. For example, he said, China could help Vietnam emerge from the gap, whereas Brazil may eventually have a similar impact on countries like Venezuela.
Barnett suggested the United States could serve as a model in this process because its states unified out of mutual self-interest to promote commerce and common security. Barnett believes that this integration, with its own regional variations, will be the dominant dynamic of the next 25 years.

According to the CFA Institute, Barnett’s presentation concluded with observations about China and its future. He noted that the Chinese phenomenon is only 25 years old and during that quarter century, China has gained economic experience that took the United States 125 years to accumulate.

For a country that would otherwise be characterized as an emerging economy, China has rather unusual demographics, Barnett said. The country’s one-child policy has resulted in a population in which males significantly outnumber females.

As well, China’s population is rapidly aging, he said. According the author, by the year 2036, 20% of the population of both China and the U.S. will be older than 65. Whereas it took 64 years for the U.S. population age 65 or older to go from 10% to 20%, the same change took China less than 20 years.

Barnett noted that, historically, aging societies are generally nonbelligerent and when combined with rising incomes, tend to move toward political pluralism.

The CFA Institute conference concludes tomorrow.