ONE DIVIDED WORLD

I trade with you goods and services, but I am not you 1 INTRODUCTION A few words about the methodology of Scenarios. Broadly used today by private companies and governments, this powerful tool of Strategic Planning was initially used at the 50s by Rand Corporation aiming strategy international geopolitical studies. However, the methodological complexity of the technique made its use highly restricted not attracting the attention of the business community. Only in 1970, Pierre Wack, Strategic Planning Director of Royal Dutch Shell, realized the power of the methodology, simplified and adapting it to the corporate world making its use easier and accessible to business people. The pioneer use of the Scenarios Methodology by Shell is a history of success. The basics of the methodology are few and simple : It is not possible to predict the future. We can, however, identify the main forces acting in the present which will shape the future. Once identified a basic case is establish and by varying the importance of the forces alternative scenarios are created. Scenarios are feasible and consistent descriptions of possible futures.

In short : Scenarios are not predictions or forecasts of the future but rather internal consistent histories about possible futures. Large companies use teams composed by professionals with different experiences and academic background in order to cover all aspects related to the scenario being written. Scenarios can be used to describe futures of a company, a business sector, a particular product, a particular segment of a society, an entire country or even the society as a whole. Four important milestones : 1940 Herman Kahn, senior analyst of Rand Corporation, establish the bases of the methodology of Scenarios describing different histories about the use of nuclear weapons. 1950 The use of the technique became used by Rand Corporation on strategy international geopolitical studies. 1960 Herman Kahn is contacted by two senior Shell managers, Pierre Wack and Ted Newland, involved in Strategic Planning issues. 1970 Pierre Wack started the use of Scenarios at Shell.

2 AN ERA OF CONFLICTS BETWEEN BELIEFS AND ECONOMIC GROWTH The world has always been facing this conflict causing negatives consequences in different ways. One might say : what is new, the world has been in this conflict ever. My answer to this comment would be : yes, you are totally right but the big issue now is that this conflict is seriously affecting the performance of the economy. Lets use the end of Second World War (1945) and the 1st oil price shock (1973) as milestones to develop the basis of the idea. During this period of almost 30 years, the world faced an era of reasonable peaceful political stability and economic growth. We can describe this world by simply saying that the strong dominance of two forces (USA west and Soviet Union east) put a false feeling that beliefs were no more possible causes of conflicts. More than that : the existence of only two apparent beliefs capitalism and communism simplified a lot the understanding of the world that, added to the strong leadership kept by USA and Soviet Union, reflected on a global economy performing well. But the pressure was there, increasing and waiting a moment to explode. Another important aspect to point out is that management of the world, politically, military, ideologically and economically, was somehow organized by four international institutions created just after the end of the Second World War : International Monetary Fund, United Nations, World Bank and North Atlantic Treaty Organization (NATO). In 1955, as a reaction to the integration of West Germany into NATO, the Warsaw Treaty Organization of Friendship, Cooperation and Mutual Assistance (Warsaw Pact) was established under the initiative of the Soviet Union. A convenient peaceful war (Cold War) was established between the two super powers (USA and Soviet Union) and last from 1945 and 1991 with the collapse of the Soviet Union. With the collapse of the Cold War at the end of the 1980s the Warsaw Pact ceased to exist on July 1st 1991. I would name these years as a World of Presumption : we know everything and as a consequence we control everything. All the ingredients of an easy predicted collapse were there being the, by far, more important the disregard of importance of innumerable beliefs. The 1st oil price shock was the beginning of countless historical events, strongly based on beliefs, that put an end on 30 years of false simplicity. The Pandoras box was open.

3 ONE DIVIDED WORLD I trade with you goods and services, but I am not you The above sentence summarizes the logic of this Scenario. The present world has two very striking features : an increasing international trade of goods and services uniting countries (ONE). ideologies, cultures and religions (beliefs) clash in opposition to the commercial interests promoting division and tension between countries and blocks (DIVIDED).

In this Scenario the countries maintain a strong and growing trade relationship however safeguarding its beliefs (ideologies, cultures and religions) that would explicitly accepted and mostly mutually respected by all, generating an environment very conducive to the development of truly sustainable global economy. The precondition for this Scenario to happen, is that the world abandons the techno-structure existing policy represented by the UN, IMF and World Bank which keeps the world locked into a reality no longer existent. No matter what you try, if there is such an attempt, these organizations generate initiatives and policies still attached to concepts and ideas that motivated and generate their creations. We live in a world in which the political speech recognizes this new reality but the practical politics do not. As said before, the postwar period was very simple and easy to understand: there were two countries/blocks, the United States and Soviet Union, with very different and clear ideologies and political ideas, exerting a wide and total domination in their respective areas of influence. Lets take a quick look on a simplified analysis on the four possibilities of this Scenario : strong beliefs x strong economical development strong beliefs x weak economical development weak beliefs x strong economical development weak beliefs x weak economical development

As number three is basically what happened just after the end of Second World War and the fourth is a possibility resulting of some kind of a natural disaster, we will not discuss them. We are living on a world of strong beliefs and it is difficult to see a change on this pattern. We are clearly living on the 2nd possibility : strong beliefs with weak economical growth basically generated by the incapacity of the already developed nations to understand and cope with the enormous quantity of different cultures (beliefs). This incapacity imposes the inexistence of political attitudes which could create efficient tools to promote not only a steady worldwide healthy commerce but, more important, the inclusion of vast areas like Africa and its inhabitants to the social benefits of such economic growth. This Scenario is not being naive by saying that such reality would lead the world to a complete peaceful era with no conflicts. 3

This Scenario is saying basically two things : the existent international structure, represented by organizations created long time ago, are no longer capable to deal with cultural diversity and desires only by the acceptance and truly understanding of all the existent beliefs, the world economy will be able to grow on a steady and sustainable way

4 FINAL WORDS Let me end this text with two quotes that I particularly appreciate not only the content but also to have had the privilege of having known the two authors. "The ability to learn faster and better than our competitors may be the only real, true and sustainable competitive advantage that we have." Arie de Geus "People have an innate ability to build scenarios and predict the future." Peter Schwartz

Jurandyr Arone Maus - So Paulo, May 28, 2013