This document discusses using the International Futures (IFs) global forecasting model to identify risks by looking for imbalances in the global system. The IFs model integrates data on 186 countries across issues like governance, economics, health and the environment. The presenter proposes examining imbalances like youth bulges, resource curses, inequality and environmental pressures to identify risks. Examples are given of analyzing demographic, socio-political and environmental imbalances both within and across countries. Combining the IFs model with other risk indices is also discussed as a way to explore multiple interacting risks.

1. IDENTIFYING RISKS USING A LONG-TERM
GLOBAL MODEL: LOOKING FOR IMBALANCES
Barry B. Hughes, Professor and Director
Frederick S. Pardee Center for International Futures
Josef Korbel School of International Studies
University of Denver
5Th International Disaster and Risk Conference
IDRC Davos 2014
August 28, 2014 (3:15-3:45 PM)

2. MY CHALLENGE TODAY
• Have global forecasting model (IFs)
• Have mostly NOT used it explicitly for risk analysis
(instead, for exploring alternative futures in search
of leverage points to improve them)
• What can we say about risk, extending our work,
and helping you?
2
Pardee.du.edu
PARDEE CENTER FOR INTERNATIONAL FUTURES

3. BACKGROUND: THE PARDEE CENTER AND
THE INTERNATIONAL FUTURES (IFS) SYSTEM
• Frederick S. Pardee Center at the Josef Korbel School of
International Studies at the University of Denver
• IFs evolving over a 35+ year period
• Focus is on long-term, integrated scenario development
• Have produced Patterns of Potential Human Progress series:
Poverty, Education, Health, Infrastructure, and Governance
3

4. INTERNATIONAL FUTURES (IFS) USERS
• United Nations Environment Programme: Global Environment Outlook 4
• United Nations Human Development Reports: HDRs 2011 and 2013
• European Union Commission: New Economy and Renewable Energy
Projects
• United States National Intelligence Council Reports to the President:
Global Trends 2020, 2025, 2030
• Others include: World Bank, Peru CEPLAN, Western Cape Provincial
Government, New Partnership for African Development, Population
Services International, United States Institute of Peace, Google Public Data
Explorer, Wikipedia Country Pages
4

5. THE INTERNATIONAL FUTURES SYSTEM
DESIGN ELEMENTS
• 186 countries
• Integrated multi-issue,
long-term
• User interface for
data and scenario
analysis
• Transparent/open,
available free at:
5
Basic Features
Pardee.du.edu
PARDEE CENTER FOR INTERNATIONAL FUTURES

6. Governance Government Finance International Politics
Education Economics Health
Infrastructure Demographics
Energy
BLOCK DIAGRAM OF IFS
Agriculture Technology Environment
PARDEE CENTER FOR INTERNATIONAL FUTURES

7. LOOKING FOR IMBALANCES TO SPOT RISK
• Why look at imbalances?
– Stable systems are in equilibrium/balance
– Unbalanced systems are unstable and may shake or even tip
• The Willie Sutton logic?
• But Google “imbalance risk” — you will find only micro
examples in top 100 (human body; business)
7
PARDEE CENTER FOR INTERNATIONAL FUTURES

8. THE INTERNATIONAL FUTURES SYSTEM
WHAT WE THINK WE DO WELL
• Dynamic unfolding of the global system
– Not just “trend analysis” but interactive system change
and transformation
• Develop and explore alternative scenarios/futures
– Facilitate study of interventions and leverage
• Arguably the best available long-term, forecasting
tool for a wide range of futures analyses
8
Pardee.du.edu
PARDEE CENTER FOR INTERNATIONAL FUTURES

9. IFS ANALYSIS (NON-RISK) EXAMPLE: PERUVIAN
DEMOGRAPHICS AND EDUCATION (2010)
PARDEE CENTER FOR INTERNATIONAL FUTURES

10. DYNAMIC ANALYSIS EXAMPLE: PERUVIAN AND SWISS
DEMOGRAPHICS AND EDUCATION (2010,2030)
2010 2030
PARDEE CENTER FOR INTERNATIONAL FUTURES

11. BENCHMARKING TO SEE RISKS AROUND PERUVIAN
EDUCATION; DIRECTION OF IMBALANCE ALSO MATTERS
Iceland
Italy
100
90
80
70
60
50
40
30
20
10
• Quality (from World Economic Forum’s Global Competitiveness Report)
• Availability of jobs would also be a risk
11
PARDEE CENTER FOR INTERNATIONAL FUTURES
Peru
Portugal
Singapore
Switzerland
Tunisia
0
$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000
WEF Education Quality 2005 (Higher=Worse)
GDP per Capita at PPP

12. BENCHMARKING CONTINUED: INFANT MORTALITY
PARDEE CENTER FOR INTERNATIONAL FUTURES
Angola
Azerbaijan
Congo, Republic of
Costa Rica
Cuba
Equatorial Guinea
Gabon
Iran, Islamic Republic of
Pakistan
South Africa
Swaziland
Turkmenistan
Yemen, Republic of
90
80
70
60
50
40
30
20
10
0
-10
5000 10000 15000 20000 25000
Infant Mortality per 1000 Births
GDP per Capita at Purchasing Power Parity ($)
• Risk of delivering services so poorly that people revolt
• Risk to economic performance

13. MAJOR RISK DOMAINS IFS CAN EXPLORE
Sociopolitical Environmental
PARDEE CENTER FOR INTERNATIONAL FUTURES

14. EXAMPLES OF SOCIO-POLITICAL IMBALANCE USING IFS
– Youth bulges and retirement dependency ratios
– Developmental structure lags (poor services; democratic
deficits; corruption overload)
– Middle-income trap (need and supply of knowledge,
entrepreneurs)
– Resource curse (high revenues, not distributed)
– Inequality, especially horizontal; also gender
– Domestic fiscal and international account imbalances
No current plans to represent other imbalances, e.g.
– Trilemmas (fixed exchange rate; free capital movement;
monetary independence)
14
PARDEE CENTER FOR INTERNATIONAL FUTURES

15. DEMOGRAPHIC IMBALANCES
• Youth bulge = 15-29 years of age as percent of all adults
• Elderly bulge = 65 and older as percent of total
PARDEE CENTER FOR INTERNATIONAL FUTURES
45
40
35
30
25
Percent of Population
Year
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
Nigerian Youth Bulge Japanese Elderly Bulge

16. SUDDEN REBALANCING RISK: IRAN
Total fertillity rate Education years, women 15 and older
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
• Sudden change creates imbalance even when positive
• Either risk or opportunity (Javad Zarif) is possible
PARDEE CENTER FOR INTERNATIONAL FUTURES
9
8
7
6
5
4
3
2
1
Children per woman/Years of formal education
Year

17. DEMOCRATIC DEFICIT (RELATIVE TO INCOME, EDUCATION)
8
7
6
5
4
3
2
1
0
-1
-2
Central Africa East/Horn Africa Northern Africa Southern Africa Western Africa
2010 2011
•Published in Dec 2010 before Arab spring (Cillers, Hughes, Moyer 2010)
•Forecast rule (problem): “Give forecast or date, never both”
PARDEE CENTER FOR INTERNATIONAL FUTURES
-3
Deficit on 20-point scale of democracy
Year

18. IMBALANCE OF EXPECTATIONS AND ABILITY: FRAGILE
STATES AND NEW POVERTY ERADICATION GOAL
Burt, Hughes, Milante 2014 (WB Working Paper)
PARDEE CENTER FOR INTERNATIONAL FUTURES

19. EXAMPLES OF ENVIRONMENTAL IMBALANCE USING IFS
• Environmental (existing or anticipated in IFs; have
done less here but strengthening our work)
– Drawing down aquifers including fossil water
– Overfishing oceans
– Constantly rising atmospheric carbon
– Replacing fossil fuels with ?
– Prolonged ecological footprint above 1
• Do not currently plan to represent many other
imbalances, e.g
– Overuse of antibiotics (new ones versus resistance)
19
PARDEE CENTER FOR INTERNATIONAL FUTURES

20. WATER USE AS PERCENT OF RENEWABLE SUPPLY
Kuwait Egypt Bahrain Turkmenistan UAE
2010 2015 2020 2025 2030 2035 2040
PARDEE CENTER FOR INTERNATIONAL FUTURES
7,000
6,500
6,000
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
Water use as % of renewable supplies
Year
Close behind top 5 are Mauritania, Uzbekistan, Yemen, Pakistan

21. SCENARIO ANALYSIS: GREENHOUSE GASES
PARDEE CENTER FOR INTERNATIONAL FUTURES
600
550
500
450
400
Carbon Dioxide in Atmosphere, Parts per Million
Parts per Million
Year
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
Markets First Policy FIrst Security First Sustainability First
GEO-4 scenarios Pardee.du.edu

22. BASE CASE ANALYSIS: GLOBAL ENERGY MIX NEEDED
Oil Gas Coal Hydro Nuclear New Renewable
2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
PARDEE CENTER FOR INTERNATIONAL FUTURES
120
110
100
90
80
70
60
50
40
30
20
10
0
Billion Barrels Oil Equivalent
Year
Pardee.du.edu

23. COMBINING ENVIRONMENTAL (CLIMATE CHANGE) AND
OTHER (SOCIO-POLITICAL) RISK
The WorldRiskIndex of United Nations University combined with IFs forecast of
index and vulnerability drivers to 2060 (Joern Birkmann and others)
PARDEE CENTER FOR INTERNATIONAL FUTURES

24. MULTIPLE RISKS (IMBALANCES) TOGETHER:
EQUATORIAL GUINEA
24
PARDEE CENTER FOR INTERNATIONAL FUTURES

25. MULTIPLE RISKS (IMBALANCES) TOGETHER:
EQUATORIAL GUINEA
25
PARDEE CENTER FOR INTERNATIONAL FUTURES

26. IFS FORECASTING AND RISK ANALYSIS
ANALYSIS OF DYNAMICS: GLOBAL, REGIONAL, NATIONAL, SUBNATIONAL
FINDING IMBALANCES: BENCHMARKING, STRESS, OR SUDDEN CHANGE
RISK DOMAINS: SOCIO-POLITICAL AND ENVIRONMENTAL
TIMING ISSUE DIFFICULTY: MONITORING NEWS FEEDS?
PARDEE CENTER FOR INTERNATIONAL FUTURES

27. IFs is available at Pardee.du.edu
Josef Korbel School
of International
Studies
University of Denver
PARDEE CENTER FOR INTERNATIONAL FUTURES

29. DEMOCRATIC DEFICIT (FOCUS ON NORTHERN AFRICA)
14
12
10
8
6
4
2
Egypt Libya Tunisia
2010 2011
Forecast rule (problem): “Give forecast or date, never both”
PARDEE CENTER FOR INTERNATIONAL FUTURES
0
Deficit on 20-point scale of democracy
Year

30. BENCHMARKING: LIFE EXPECTANCY
OECD: Fragile States 2014: Domestic Revenue Mobilization, p 20
PARDEE CENTER FOR INTERNATIONAL FUTURES