Sahil Mahtani, Director, Ninety One Investment Institute
The era of “easy globalisation” is over. Investors and policymakers now face a more fragmented, volatile and politically charged global system, in which long-standing assumptions about growth, inflation and market stability are increasingly unreliable.
Sahil Mahtani, Director, Investment Institute: “Globalisation isn’t ending — but it’s no longer happening on easy mode. The assumptions that defined the last 30 years are now being challenged all at once.”
Three structural forces are driving this shift.
First, the return of multipolar geopolitics. The post-Cold War era of US dominance is giving way to a more fragmented system, with power dispersed across the US, China and a growing group of influential middle powers across the Gulf, Asia and beyond. As a result, competition is increasingly playing out in “grey zones” — from trade policy and technology to cyber and industrial strategy — rather than through direct military confrontation.
Recent developments underscore this shift. The US has become more selective in its global commitments, prioritising key regions and pushing allies to take on greater responsibility, while China has expanded its economic and geopolitical reach through trade, industrial policy and strategic partnerships. At the same time, countries such as India, the UAE and others are exercising greater autonomy, pursuing more transactional relationships with major powers. “We’re moving from a unipolar world to a more competitive, multipolar system where friction is the norm, not the exception,” Mahtani said.
Second, a shift from commodity abundance to constraint. For decades, the global economy benefited from cheap and readily available energy and materials, enabling long, efficient supply chains and keeping inflationary pressures contained. That backdrop is now changing.
Demand for commodities is rising sharply, driven by electrification, AI infrastructure, defence spending and the reconfiguration of global supply chains. At the same time, supply is becoming more constrained due to underinvestment, long project lead times and increasing geopolitical intervention.
The result is a world in which energy, metals and critical minerals are no longer neutral inputs, but strategic assets. Export controls, stockpiling and industrial policy are becoming more common, while access to key resources is increasingly shaping both economic and geopolitical outcomes. Recent disruptions to energy and food markets following Russia’s invasion of Ukraine, alongside growing competition over critical minerals used in clean energy and technology, illustrate how quickly these pressures can translate into real-world shocks.
Mahtani: “What used to be plumbing — energy, metals, supply chains — is now strategy. Access to resources is becoming a defining feature of both economic and geopolitical power.”
Third, the rise of an “age of grievance”, as stagnant living standards, rising inequality and rapid demographic change fuel public dissatisfaction across major economies. In many countries, real wage growth has been weak for over a decade, while wealth gains have become increasingly concentrated.
At the same time, large-scale migration and ageing populations are reshaping labour markets and social dynamics, while social media is amplifying political polarisation and dissatisfaction. Together, these forces are contributing to a more volatile policy environment, with governments under pressure to prioritise national interests, economic security and domestic stability.
This shift is already visible in the retreat from free trade orthodoxy, the rise of industrial policy and growing scepticism towards global institutions. Trade relationships are becoming more transactional, and economic policy is increasingly intertwined with national security.
“Public dissatisfaction is no longer a background issue — it’s a primary force shaping markets, policy and international relations,” Mahtani noted.
Taken together, these forces point to a “fourth systemic crisis” — a crisis of global integration, in which economic, political and geopolitical pressures are becoming increasingly intertwined. Unlike previous periods of instability, this is not a single shock, but a broader regime shift in how the global system operates.
For investors, the implications are significant. Portfolios built for a world of stable inflation; predictable correlations and a single global growth engine are likely to prove less resilient in the years ahead. Instead, the environment is likely to be characterised by more episodic inflation, shifting correlations and greater divergence across countries and sectors.
Mahtani: “This isn’t a cyclical shift. It’s a structural reset in how the global system works. Investors are navigating a world of higher volatility, fatter tails and greater dispersion — not a single, benign macro backdrop.”
Global integration is not reversing, but it is becoming more fragmented, politicised and harder to sustain. In this environment, resilience, diversification and adaptability are likely to become increasingly important as markets adjust to a more uncertain and uneven global landscape.
ENDS
