From the early 1980s until the onset of the COVID-19 pandemic in 2020, the global economy experienced a prolonged period of relative stability and growth. This era was characterized by the end of the Cold War, reduced defense expenditures, and the integration of hundreds of millions of workers into the global labor market. Energy and metal prices remained generally low, and expanded global supply chains operated on the assumption of uninterrupted trade. Inflation trends moved downward, supported by central bank policies and a conducive environment of peace and globalization.

However, this period of abundance is now giving way to a more challenging future marked by intense geopolitical competition for essential resources such as energy supplies, industrial metals, rare earth elements, critical minerals, and semiconductor components. There is also the possibility that water and food resources will increasingly come under pressure. These contests for resources are expected to be fierce and occasionally violent.

Advanced economies, facing the demands of servicing debt and supporting aging populations, require sustained economic growth. Growth drivers including artificial intelligence, electrification, and rearmament are material-intensive, with sectors like data centers projected to more than double their electricity consumption by 2030. Meanwhile, populous developing countries need substantial quantities of steel, copper, and energy to build infrastructure. Yet, supply responses remain slow; new mining projects typically take over a decade to come online, and processing capacity is heavily concentrated in a few countries. In this context, securing power supply can be as critical as cost in meeting urgent demand.

The evolving supply constraints heighten the risk of stagflation—a combination of stagnating growth and rising inflation—against which conventional monetary policy is limited. While higher interest rates can suppress demand, they also increase investment costs necessary to boost supply capacity. Targeted fiscal policies focusing on enhancing production and productivity may offer more effective responses, though there is a danger that broad subsidies could increase demand without resolving supply bottlenecks.

This era brings a shift in policymaking dynamics. For decades, unelected central bankers maintained monetary limits, with governments expected to adhere. Currently, elected officials seek greater control over policies related to energy security, industrial capacity, and debt management, potentially prioritizing fiscal policy over monetary tools to secure critical raw materials and energy supplies.

Emerging markets face mixed prospects. Resource-rich countries could benefit from improved trade terms, though currency appreciation may prompt financial repression measures. Fast-growing nations lacking sufficient domestic energy or mineral deposits will enter competition with wealthier countries for resources. While a weaker U.S. dollar might ease currency pressures, it does not make commodities like oil or copper less expensive.

Energy policy now functions as a key element of macroeconomic strategy for many nations. Reducing energy imports can lower stagflation risks, emphasizing the importance of efficiency, domestic generation, diversified suppliers, and strategic reserves. Policymakers are advised to support vulnerable populations directly rather than through blanket fuel subsidies, while focusing investments on expanding supplies of power, water, logistics, minerals, and workforce skills. Maintaining credible fiscal discipline and offering inflation-protected saving instruments can help finance domestic investments. Regulatory efficiency in approving infrastructure projects is also critical for competitiveness.

Beyond minerals and energy, food security and human capital investments are vital. Agricultural productivity improvements, conservation of soil and water, agro-processing advancements, and reliable food supply systems can strengthen economies with large farming sectors. Additionally, aging societies will rely on workers to perform tasks less amenable to automation, such as elder care and hospitality. Training youth to recognized standards may enhance migration partnerships and labor mobility.

Finally, countries are encouraged to pursue labor-intensive manufacturing and service industries to create jobs at scale. While advanced manufacturing investments enhance resilience, the goal should not be full self-sufficiency. Instead, diversifying import sources and maintaining buffer stocks are advised to reduce vulnerabilities.

The era of global abundance appears increasingly anomalous rather than normative. Emerging economies face narrowing choices and a pressing need to coordinate energy, fiscal, monetary, trade, and skills policies swiftly. Those that act early in recognizing these stakes are likely to navigate the challenges more successfully than those waiting for a return to former conditions, which are unlikely to reemerge.