Horizon 2026 – The race for resource sovereignty
The erosion of multilateralism and the safeguards it brought in a globalised, rules based world is driving a structural shift towards greater regionalism. Middle powers are trying to protect key industries and supply chains from outside interference. Concepts such as reshoring and “friend shoring” have become central to policy discussions across developed economies. But where they can, governments want to bring production home. They want to develop greater strategic autonomy – in energy, food, critical minerals, in finance and in supply chains.
A US pivot from acting as global policeman to adopting an “America First” approach is reinforcing the pursuit of strategic autonomy. Governments are boosting domestic spending on defence and infrastructure, and positioning their economies to capture the opportunities of tomorrow.
Up to now, oil powered the economy. Now, data is the new oil. AI, quantum computing and cyber security will be critical in this regard, and more opportunities in space will open up in the economy of tomorrow.
This puts a premium on the sources and infrastructure required to power the data led, electrified economy. Securing access to energy and critical minerals, including rare earths, is an increasingly important policy consideration for governments. This shift is further complicated by the unequal distribution of these resources, with regions such as Europe facing particular challenges.
As the world shifts from fossil fuels to electrification, the structure of commodity demand is undergoing a fundamental transformation, with profound implications for economic resilience, inflation and geopolitical influence.
Resource scarcity
The world economy has proved remarkably resilient, even in the face of the largest energy shock in recorded history. Yet it remains vulnerable to more frequent and more severe supply shocks. This uncertain environment is likely to result in more volatile prices, exacerbated in the short term by “techflation” – upward price pressures driven by demand for the materials needed to power the AI boom.
Over the longer run, AI should boost productivity and bring disinflationary effects. However, inflation is rising due to resource scarcity, together with deglobalisation, demographics, decarbonisation and the dominance of fiscal policy.
Emerging markets are fast becoming the providers of the ‘picks and shovels’ underpinning the global AI build out.
The scarcity of resources is being exacerbated by companies entering a new capital expenditure cycle as they adapt to the emerging world of agentic AI. At the same time, governments need to finance infrastructure and defence investment, technological transformation and growing social spending linked to ageing populations. The result is a fight for capital to fund both corporate ambitions and government imperatives – with consequences for the cost of borrowing.
For more than four decades, the global economy operated in an environment of declining interest rates and abundant capital. Fiscal consolidation, globalisation and technological progress created powerful disinflationary forces, allowing bond yields to trend lower and ultimately reach historic lows in the wake of the Covid-19 pandemic in 2020. Now, against the backdrop of the fight for capital and structurally higher inflation, investors are likely to demand higher compensation to lend over the long term. Persistent government budget deficits are only exacerbating this situation and translating into higher government bond term premia.
Emerging markets vital
In this context, emerging markets (EM) are reclaiming a central role in the global investment landscape. These economies are increasingly vital as suppliers of what the world now prizes most: the infrastructure powering AI, the resources underpinning energy security and alternative currencies backed by lower debt, robust external balances and deeper integration into global supply chains.
The development of large scale AI systems relies on a vast physical ecosystem – spanning semiconductors, advanced manufacturing, specialised materials, data centres, optical networks and power infrastructure – much of which is designed, produced or assembled in emerging markets, particularly in North Asia. As a result, segments of the EM equity and credit universe are now tied to a multi year investment cycle driven by digital infrastructure and AI deployment, rather than short term consumer trends. In effect, emerging markets are fast becoming the providers of the “picks and shovels” underpinning the global AI build out.
Against this backdrop, we project annualised returns of 6.8% for global equities over the next ten years. A slightly higher starting point for interest rates implies higher expected returns than last year for sovereign bonds, at 5% for US Treasuries and 3.6% for Bunds. Our 10 year projection for gold remains broadly unchanged at 4% per year. Lastly, we still expect the US dollar to weaken over the coming decade, if only at a more gradual pace than before. Our 10 year projections are for EUR/USD at 1.30 and USD/JPY at 129.
In conclusion, we are convinced that understanding the risks and opportunities of this changing world order will be crucial for those involved in asset allocation and portfolio construction in the coming years. We believe the starting point of any investment journey should be to grasp the interconnection of the rapid changes in the geopolitical, financial and technological landscape that we are experiencing in the new era of multipolar rivalry.
For investors, this more fragmented world calls for diversified portfolios with a focus on the real, tangible assets that will be used to build out AI infrastructure and the electrified economies of the future. Structurally higher inflation and government deficits reinforce the clear takeaway: buy assets that governments cannot print.
*Topographies of Fragility – Series Statement
Topographies of Fragility grew from a lifelong search for places in nature that offer spaces for contemplation, silence, and emotional grounding; landscapes that feel untouched by human presence. Yet over the years, I became increasingly aware of the fragile tension between their apparent permanence and their underlying vulnerability.
While working in my studio, in an attempt to clear space, I began crumpling discarded prints of the very landscapes I had photographed. What started as an unconscious gesture gradually came to reflect the way we often relate to nature itself, as something to be used, consued and discarded. Since the photographs exist on paper derived from trees, the manipulated print embodies a direct relationship between material, image, and environment. By physically transforming the photograph, I metaphorically transform the landscape itself, inviting reflection on the traces our actions leave behind. While we shape nature, it, in turn, shapes us.
Photography
Ingrid Weyland is an Argentinian artist whose work explores the fragile relationship between humans and the natural world through photography and material intervention. Born into a family of sculptors and architects, she developed an early sensitivity to form, space and materiality, influences that continue to shape her practice today. Her work begins with immersive encounters in remote landscapes that become photographic works, later transformed through physical interventions to reflect on environmental fragility, memory, and the lasting traces of human action.
Her work has been exhibited internationally and recognised through awards, exhibitions and publications, including the Saatchi Art for Change Prize (Americas Winner), the Ashurst Emerging Artist Photography Prize, the Aesthetica Art Prize, a nomination for the Prix Pictet, and being selected as a Hasselblad Masters 2026 finalist.
