Opinion | Global Economy
For nearly four decades, the global economy benefited from an extraordinary combination of favourable circumstances. The end of the Cold War, declining defence expenditures, expanding international trade and the integration of hundreds of millions of workers into global markets created an environment of relatively abundant resources, inexpensive production and declining inflation. Governments and businesses increasingly operated on the assumption that energy, raw materials, labour and manufactured goods would remain readily accessible through interconnected global supply chains.
That era of relative abundance may now be coming to an end.
From the early 1980s until the outbreaThe End of Abundance: Why Resource Scarcity Could Reshape the Global Economy
k of the COVID-19 pandemic in 2020, globalization helped reduce production costs and expand access to international markets. Energy and industrial metals were generally affordable, while improvements in transportation and international cooperation enabled companies to distribute production across multiple countries. Central banks received much of the credit for controlling inflation, but their success was also supported by favourable global supply conditions.
Peace, international economic integration and the availability of inexpensive resources created an economic environment in which growth and price stability could coexist.
The coming decades may prove considerably more difficult.
As competition for natural resources intensifies, access to energy, minerals and essential raw materials could increasingly determine the economic prospects of nations. Supply chains that once appeared reliable may become more vulnerable to geopolitical tensions, trade restrictions and strategic competition.
This transformation carries significant implications for inflation, economic growth and the role of governments in managing national economies.
One of the most serious risks is the possibility of recurring stagflation, a condition in which economic growth remains weak while inflation persists. Rising resource costs can increase production expenses, reduce purchasing power and constrain industrial activity. Unlike inflation driven primarily by excessive demand, inflation resulting from supply shortages cannot be resolved through monetary tightening alone without imposing additional costs on economic growth.
Consequently, governments may find themselves assuming a more active role in economic policy.
Energy security, access to critical minerals, infrastructure development and strategic reserves could become increasingly important elements of national economic planning. Countries may also seek to diversify their trading relationships and reduce excessive dependence on individual suppliers.
The consequences will not be distributed equally.
Emerging economies with large populations but limited natural resources are particularly vulnerable. Their development often depends on imported energy, industrial inputs and access to affordable international commodities. When global prices rise or supplies become uncertain, these economies face pressure on their foreign exchange reserves, public finances, industrial competitiveness and household purchasing power.
For such countries, the challenge is not simply to secure sufficient imports. It is to develop economic systems capable of withstanding external shocks.
Diversifying energy sources, improving resource efficiency, investing in domestic productive capacity and strengthening regional trade relationships can help reduce vulnerability. Equally important are institutional reforms that enable governments to anticipate supply disruptions and respond through coherent economic policies.
Human capital will remain a major source of economic strength, but a large workforce alone cannot compensate for persistent resource insecurity. Countries must combine their demographic potential with technological development, efficient institutions and long-term investment strategies.
The changing global environment also raises questions about the future of globalization. International trade will remain essential, but economic integration may increasingly be shaped by security considerations alongside commercial efficiency. Governments and businesses could place greater emphasis on supply reliability, strategic partnerships and economic resilience, even when these arrangements involve higher costs.
The central lesson is that the economic conditions of the past four decades should not be mistaken for permanent features of the international system.
Low inflation, inexpensive commodities and uninterrupted global supply chains were supported by a particular historical environment. As that environment changes, economic policy must adapt.
The challenge for governments is not to abandon international cooperation or retreat into economic isolation. It is to recognise that markets require reliable institutions, secure supply networks and policies capable of managing scarcity.
For resource-poor emerging economies, this adjustment is especially urgent. Their future prosperity will depend on how effectively they strengthen domestic capabilities, diversify economic dependencies and prepare for a world in which access to essential resources may become increasingly contested.
The age of easy abundance encouraged economies to prioritise efficiency and expansion. The emerging age of resource competition may require them to place equal importance on resilience, security and institutional preparedness.
