or later, could more quickly erode Russia’s country’s key challenge; failure could lead to a geopolitical position, especially if internal splintering of the United Kingdom and leave it instability ensues. Similarly, a decrease in struggling to maintain its global power. Europe’s energy dependence on Russia, either Japan’s highly educated population, techno- through renewables or diversifying to other logically innovative economy, and integral gas suppliers, would undercut the Kremlin’s position in trade and supply chain networks revenue generation and overall capacity, es- position it to remain a strong power in Asia pecially if those decreases could not be o昀昀set and beyond. Japan is likely to remain highly with exports to customers in Asia. economically dependent on its largest trading The EU’s large market and longstanding lead- partner and main regional rival China and a ership on international norms will enable it to close ally of the United States while working retain signi昀椀cant in昀氀uence in coming decades, to further diversify security and economic especially if it can prevent additional mem- relationships, particularly with Australia, India, bers from departing and can reach consensus Taiwan, and Vietnam. Japan will also face on a common strategy for navigating global mounting demographic and macroeconomic competition and transnational challenges. The challenges, including a shrinking labor force— economic weight of the EU’s single market the oldest of any developed country—with in- almost certainly will continue to give it global 昀氀exible immigration policies, low demand and geopolitical clout on trade, sanctions, tech- economic growth, de昀氀ation, declining savings nology regulations, and environmental and rates, and increased government debt. investment policies. Countries outside the EU India’s population size—projected to become often model their standards and regulations the largest in the world by 2027—geography, on EU policies. European military strength strategic arsenal, and economic and techno- is likely to fall short of some members’ am- logical potential position it as a potential glob- bitions because of competing priorities and al power, but it remains to be seen whether long-term underinvestment in key capabilities. New Delhi will achieve domestic development European defense expenditures will compete goals to allow it to project in昀氀uence beyond with other post–COVID-19 昀椀scal priorities, and South Asia. As China and the United States its security initiatives are unlikely to produce compete, India is likely to try to carve out a a military capability separate from the North more independent role. However, India may Atlantic Treaty Organization that can defend struggle to balance its long-term commit- against Russia. ment to strategic autonomy from Western The United Kingdom is likely to continue to powers with the need to embed itself more punch above its weight internationally given deeply into multilateral security architectures its strong military and 昀椀nancial sector and its to counter a rising China. India faces serious global focus. The United Kingdom’s nuclear ca- governance, societal, environmental, and pabilities and permanent UN Security Council defense challenges that constrain how much membership add to its global in昀氀uence. Man- it can invest in the military and diplomatic aging the economic and political challenges capabilities needed for a more assertive global posed by its departure from the EU will be the foreign policy. 96 GLOBAL TRENDS 2040