Markets brace for life after easy globalisation

For much of the past three decades, globalisation operated smoothly in the background of the global economy. Trade expanded, supply chains lengthened, commodities remained cheap and geopolitics rarely intruded into day-to-day market dynamics. For institutional investors and policymakers alike, it was a relatively forgiving environment. Inflation was subdued, shocks tended to fade quickly and diversification generally behaved as expected.

That era has now come to an end.

According to Ninety One Investment Institute director Sahil Mahtani, the global economy has entered a new structural phase, one defined by fragmentation, recurring volatility and sharper political constraints on markets. The end of easy globalisation does not mean global integration is reversing, but it does mean it is becoming harder to sustain and far less predictable.

“The assumptions that defined the last 30 years are now being challenged all at once,” Mahtani says. “Globalisation isn’t ending, but it’s no longer happening on easy mode.”

In his paper The End of Easy Globalisation, Mahtani outlines three structural forces reshaping the global order: the return of multipolar geopolitics, increasing constraints in commodity markets and rising domestic political dissatisfaction. Together, they point to a regime shift in how the global system operates, rather than a typical cyclical slowdown.

Multipolarity reshapes the post easy globalisation world

The first force underpinning the end of easy globalisation is geopolitical. The post‑Cold War period, largely characterised by US dominance and an expanding rules‑based economic system, is giving way to a more contested and multipolar order.

Power is increasingly dispersed across the US, China and a growing group of influential middle powers. Competition between states is less about direct military conflict and more about trade policy, technology access, cyber capabilities and industrial strategy. These so‑called ‘grey zone’ dynamics are now central to how nations pursue strategic advantage.

The US has become more selective in its international commitments. It is prioritising strategic regions and encouraging allies to take on greater responsibility. China continues to expand its influence through trade, industrial policy and strategic partnerships. Countries such as India, the UAE and Saudi Arabia are increasingly pursuing pragmatic, transactional relationships that serve national interests rather than broad ideological alignment.

“We’re moving from a unipolar world to a more competitive, multipolar system where friction is the norm, not the exception.”

This shift, Mahtani says, is a defining feature of the end of easy globalisation.

For markets, the implication is clear. Geopolitical risk can no longer be treated as an occasional shock. Trade restrictions, sanctions and regulatory barriers are becoming persistent features of the investment landscape.

Commodity constraints mark a decisive break with easy globalisation

The second structural change reinforcing the end of easy globalisation is the transition from commodity abundance to constraint.

For decades, global growth was supported by plentiful and inexpensive energy, metals and raw materials. That foundation enabled long, efficient supply chains and helped keep inflation contained. Today, that backdrop has changed.

Demand for commodities is rising, fuelled by electrification, AI infrastructure, defence spending and the re‑engineering of supply chains along geopolitical lines. Years of underinvestment, long development timelines and growing state intervention are constraining supply growth.

As a result, energy, food and critical minerals are no longer neutral economic inputs. They have become strategic assets. Governments increasingly use export controls, domestic stockpiling and industrial policy to secure access and reduce dependence on geopolitical rivals.

The disruption to energy and food markets after Russia’s 2022 invasion of Ukraine showed how quickly geopolitics can feed into inflation and growth outcomes. Similar pressures are now emerging around critical minerals such as lithium, copper and rare earths. These materials are essential inputs for clean energy systems and advanced technologies.

“What used to be plumbing, energy, metals and supply chains, is now strategy,” Mahtani says, highlighting one of the clearest signals that the era of easy globalisation has passed.

The age of grievance adds political pressure

The third force shaping the end of easy globalisation is rising domestic political dissatisfaction across major economies.

In many countries, real wage growth has stagnated for more than a decade, while the benefits of globalisation and asset price appreciation have accrued unevenly. Demographic change, migration pressures and rapid technological shifts have further disrupted labour markets and social cohesion.

Social media has amplified dissatisfaction and political polarisation. As a result, pressure on governments to prioritise domestic economic security has intensified. This has driven a shift away from free‑trade orthodoxy and towards more interventionist policy frameworks.

Governments increasingly justify industrial policy, trade protection and economic nationalism on the grounds of resilience, employment and national security. Countries are making trade relationships more transactional and are more openly subordinating economic decision making to political objectives.

“Public dissatisfaction is no longer a background issue,” Mahtani notes. “It’s a primary force shaping markets, policy and international relations.”

Markets adjust to a harder globalisation regime

Taken together, these forces point to what Mahtani describes as a fourth systemic crisis, a crisis of global integration itself. Structural changes, not a single shock, are driving the end of easy globalisation by reshaping how economic, political and geopolitical forces interact.

For institutions allocating capital over long horizons, the implications are significant. The environment ahead is likely to feature more episodic inflation, less reliable correlations between asset classes and greater divergence across regions and sectors.

“This isn’t a cyclical adjustment,” Mahtani says. “It’s a structural reset. Markets are operating with higher volatility, fatter tails and greater dispersion, not a single benign macro backdrop.”

Global integration continues, but it is increasingly fragmented and politicised. In a world shaped by the end of easy globalisation, resilience, adaptability and a deeper understanding of structural risks are becoming essential to navigating an uneven and uncertain global landscape.