Why global prosperity is not yet a lost cause

Are prospects for global stability and prosperity improving or deteriorating? With enlightenment and progress in some parts of the world accompanied by atavism and stagnation elsewhere, this is not an easy question. But we can gain greater purchase on it by considering three other questions.

The first is whether the United States will regain its standing as a source of moral leadership. Despite its flaws, America did provide such leadership, beginning at the end of the second world war. But the terrorist attacks of September 11, 2001, changed everything.

Americans' anger following the attacks drove them to support policies that they once would have considered inconceivable. In the name of the "global war on terror", they have tolerated torture, accepted - and even endorsed - the illegal invasion of Iraq, and allowed innocent civilians to become collateral damage of mechanical drone strikes.

In order to restore America's moral leadership, President Barack Obama must make good on his early rhetoric - exemplified in his speeches in Istanbul and Cairo early in his presidency - which demonstrated genuine regard for the oppressed. In 2007, during his first presidential campaign, he wrote that America "can neither retreat from the world nor try to bully it into submission. We must lead the world, by deed and by example."

But Obama cannot do it alone - and, so far, neither the American public nor the US Congress seems committed to reconnecting with its moral compass. It should be unacceptable, for example, for Congress to block the release of 86 Guantanamo Bay detainees cleared by a committee of national-security officials. Not even the revelations by former intelligence contractor Edward Snowden that no one is exempt from the possibility of US surveillance have stirred Americans to demand a new approach.

The answer to the second major question shaping the world's future - whether China will regain its economic momentum - also appears to be "no", at least in the short term, with most experts agreeing that China's export- and investment-led growth model has all but exhausted its potential. Indeed, China cannot continue to rely on manufacturing exports when its major sources of demand - the US and Europe - are struggling and its labour costs are rising.

Likewise, China's government cannot continue to waste resources on economic-stimulus packages that have led to industrial overcapacity and skyrocketing local government debt. And China cannot move towards a more market-oriented, efficient and innovative economy with bloated state-owned enterprises blocking the way.