Edward Luce

China’s growth in 2022 is set to fall to five per cent officially (and much lower in practice). India will exceed 7 per cent. This is likely to be replicated for many years to come, which will make India the fastest growing large economy in the world. India will benefit from the growing decoupling of the US and Chinese economies. Apple is now making its iPhone 14 models in India, for example. Though India remains a tougher investment environment than China was over the last thirty years, its demand for capital and the youth of its population make it a far steadier long-term growth prospect than today’s increasingly autocratic China, which is ageing before it gets rich and entering the middle-income trap. The future is not entirely India’s – its legal system and politics remain wild cards. But it will look increasingly attractive relative to China’s surveillance capitalism and the increasingly arbitrary rule of Xi Jinping. Edward Luce’s book: In Spite of the Gods: The Rise of Modern India (updated 2011), was described as “the definitive book on the New India” by The Economist.

The world’s “democratic recession” dates from Vladimir Putin’s accession to the Russian presidency at the start of this century. Since then dozens of countries have either ceased to be democracies or degenerated into illiberal democracies, such as Hungary and Turkey. It is ironic, therefore, that Russia’s invasion of Ukraine this year has rekindled a new belief in democracy among western publics and a degree of unity the west has not seen in many years. Liberal democracy is still skating on thin ice: the populist threat from right and left has not disappeared. But democracies have stumbled on a newfound purpose and awareness. Edward Luce’s book, The Retreat of Western Liberalism (2017) was considered one of the best on democracy’s mounting challenges, including in the US. He is less pessimistic today partly because Putin has reminded the west of what for so long it took for granted.

The rich countries have almost unanimously adopted net zero targets for carbon emissions for the mid-century or before. Some, such as Canada, have put an escalating price on carbon. Others, such as the US, have announced big investments in green energy. The EU and the UK will both phase out the internal combustion engine by 2035. As the west switches to renewable energy – accelerated by Europe’s severance of Russian fossil fuel supplies since the Ukraine invasion – energy friction between the west and the rest will intensify. Countries such as China, India, Brazil and sub-Saharan Africa, most of which have emitted a fraction the per capita carbon of their western counterparts, will increasingly band together for fossil fuel security. The west will increasingly treat such projects as “stranded assets” and will sooner or later impose border tariffs on carbon-intensive imports, which will lead to a breakdown of the WTO global trading order. Energy, not ideology, is the new geopolitical faultline. The Middle East will continue to be the world’s main geopolitical playground.