Macro outlook and strategies for emerging‑market resilience

Emerging Markets & Macro Resilience

The 2026 Systemic Reordering: Emerging Markets, Persistent Inflation, and Strategic Resilience—An Updated Perspective

As 2026 unfolds, the global geopolitical and economic landscape continues to experience profound shifts driven by persistent inflation, regional supply-chain fragmentation, and the rising strategic agency of emerging markets (EMs). These interconnected dynamics are reshaping power balances, influencing investment flows, and compelling nations and corporations to rethink resilience strategies. Recent developments underscore the urgency and complexity of navigating this evolving environment.

Persistent Structural Inflation and Supply-Chain Regionalization Continue to Drive Costs and Onshoring

Despite initial hopes that pandemic-era demand surges would wane, inflation remains stubbornly entrenched across major economies. Experts, including Dr. Adam Posen of the Peterson Institute, emphasize that inflation is increasingly rooted in structural factors rather than cyclical demand. Key contributors include:

Supply Chain Fragmentation: Geopolitical tensions, technological decoupling, and regional protectionism have fostered less resilient, regionalized supply networks. These fragmented supply chains lead to higher production costs, bottlenecks, and delays, perpetuating cost-push inflation. Countries are actively expanding regional trade corridors—notably within Asia and Latin America—to mitigate vulnerabilities, but this also introduces new complexities and dependencies.
Energy Prices and Climate Policies: Ongoing geopolitical conflicts over fossil fuels, coupled with ambitious decarbonization policies, keep energy costs elevated. Restrictions on fossil fuel production and a global push toward renewables contribute to cost pressures that ripple through industries and consumer prices.
Labor Market Constraints: Demographic shifts, such as aging populations, and skills mismatches have created labor shortages in key sectors. Wages are rising, further fueling inflation, especially in industries facing persistent talent gaps.

Central banks are caught in a delicate balancing act—raising interest rates to curb inflation risks triggering recessions and financial instability. Consequently, policy responses are shifting toward structural reforms: enhancing supply chain resilience, stabilizing energy markets, and increasing labor market flexibility.

The Resilient Rise of Emerging Markets: Strategic Agency and Resilience Building

Amid these enduring challenges, emerging markets are asserting greater strategic agency, leveraging regional integration, currency diversification, technological innovation, and resource management to strengthen resilience. The IMF’s Kristalina Georgieva underscores that “EM economies are not only growing but actively diversifying their resilience,” signaling a deliberate move toward multipolar influence.

Recent developments highlight several key strategies:

Reserve and Currency Diversification: Many EMs are reducing reliance on the US dollar, favoring regional currencies and innovative financial instruments. This shift is reconfiguring the global reserve landscape and dampening dollar dominance, fostering a more multipolar financial architecture.
Trade and Regional Integration: Countries across Asia, Africa, and Latin America are expanding intra-regional trade corridors, building economic independence and reducing dependence on Western markets. For example:
- India is shaping its regional influence through digital currency experiments and infrastructure investments, asserting influence beyond traditional alliances.
- Countries are also investing in resource sovereignty, with Malaysia advancing semiconductor and rare earth strategies to become regional hubs—balancing influence and securing critical supply chains.
Strategic Resource Management: EMs are building domestic stockpiles and investing in resource sovereignty. Notably, the US’s “Project Vault”—a $12 billion initiative to rebuild domestic mineral reserves—reflects a global recognition that reserves alone are inadequate without industrial infrastructure and resilient supply chains.

Supply Chain Fragmentation and Covert Realignments: New Power Dynamics

The decade has seen clandestine trade pacts, regional coalitions, and strategic arrangements designed to bypass traditional multilateral institutions. These covert negotiations are actively shaping supply chains and regional alliances, often driven by strategic interests rather than transparency.

China’s Deepening Resource Ties: Despite geopolitical tensions, China continues entrenching resource and market ties, especially through mineral shipments from Africa routed via Chinese hubs. These supply chain entrenchments heighten market fragility and trade frictions, prompting EMs to seek diversification.
Regional Onshoring and Diversification: Countries are investing in regional processing facilities—Malaysia’s semiconductor alliances exemplify this trend—to reduce susceptibility to disruptions. The findings from WEF research emphasize that overly concentrated supply networks are fragile and need geographical diversification.

Technological Sovereignty and the AI Arms Race: New Frontiers

Technological independence, especially in AI and semiconductors, has become central to resilience strategies. Recent developments highlight:

Developing Sovereign AI Frameworks: EMs like India and Vietnam are pursuing sovereign AI initiatives to reduce dependence on foreign providers and assert digital sovereignty. The recent AI Summit in India exemplifies efforts to attract investments and build regional AI capacity.
Regional Semiconductor Alliances: Countries such as Malaysia are accelerating local manufacturing and regional collaborations to bypass export restrictions. Notably, US export controls—like the Nvidia H200 chip ban to China—are accelerating domestic chip development in China and other EMs.
AI Security Threats and Industrial-Scale Model Theft: A new and concerning development involves large-scale distillation attacks—where Chinese AI labs illegitimately extract proprietary capabilities from models like Claude through fraudulent accounts and proxy services. Companies such as Anthropic and OpenAI have flagged these “industrial-scale” campaigns, which undermine IP security and pose significant security risks. This trend underscores heightened risks of IP theft, model security breaches, and geopolitical espionage.

Recent investments reflect this intensifying race:

Thrive Capital invested about $1 billion in OpenAI at a $285 billion valuation, highlighting the growing private capital flow into leading AI firms.
Wayve, a UK-based autonomous driving platform, secured $1.5 billion led by Eclipse, Balderton, and SoftBank Vision Fund 2, with new investments from Ontario Teachers’ Pension Plan. These investments demonstrate private sector confidence in autonomous logistics and AI-driven operational resilience.

Private Sector and Infrastructure Innovations

Private sector initiatives are crucial to resilience in energy, logistics, and cybersecurity:

Decentralized Energy and Autonomous Logistics: Microgrids, fuel cells, and electric autonomous trucks are expanding, bolstering operational resilience during climate shocks and geopolitical disruptions. For instance, Guangna Coal’s deployment of electric autonomous trucks exemplifies efforts toward regional energy independence.
Cybersecurity and Digital Infrastructure: Countries are investing in local data centers and cyber defenses to prevent foreign interference, recognizing digital infrastructure as core to national security.

Geopolitical Flashpoints and Strategic Locations

Certain geographic nodes have become crucial strategic assets:

Chagos Islands and Diego Garcia: These territories serve as key military and trade hubs in the Indo-Pacific, influencing maritime security and regional influence.
Arctic and Maritime Chokepoints: Melting ice opens new shipping routes and resource claims, intensifying geopolitical competition—notably in the Arctic, Malacca Strait, and Bab el-Mandeb.

Current Status and Future Implications

The landscape in 2026 paints a picture of a world increasingly defined by fragmentation, strategic diversification, and technological rivalry. Emerging markets are navigating this environment with proactive resilience strategies, leveraging regional alliances, technological sovereignty, and resource management to reassert influence.

Key implications include:

Asset diversification and currency shifts: Moving beyond dollar dependence toward regional currencies and digital assets.
Supply chain resilience: Emphasizing onshoring, regional processing, and technological sovereignty.
Monitoring covert alliances and resource disputes: Recognizing clandestine trade pacts, resource conflicts, and AI security threats.
Integrating climate and resource risks into strategic planning, acknowledging their destabilizing potential.

Conclusion

The systemic reordering of 2026 underscores that resilience is now multifaceted and proactive. Countries and corporations that embrace diversification, anticipate layered risks, and forge resilient networks will be best positioned to navigate turbulence, shape influence, and secure prosperity in this emerging multipolar order. The era demands foresight, agility, and strategic agency—traits essential for thriving amid global fragmentation, technological competition, and geopolitical shifts.

As the world continues to fragment and new centers of influence emerge, those who effectively leverage regional cooperation, technological innovation, and resource sovereignty will define the future landscape. The ongoing developments, including significant private investments in AI and autonomous logistics, alongside renewed geopolitical realignments, will shape the trajectory of global resilience and influence well into the coming decade.

Sources (81)