The global system is no longer defined by a single dominant power. Thus, investors can no longer rely on geopolitical assumptions that shaped most of recent history. That was the core message from Marko Papic, Chief Strategist at BCA Research, in his keynote address at the CommBank's 15th Global Markets Conference.
Papic argues that the shift to a multipolar world is both irreversible and deeply consequential. In his opinion, the transition away from U.S. hegemony has been underway for more than a decade.
"Geopolitics is clear. We’re not in a unipolar or hegemonic world. We haven’t been in 10 years. Our geopolitical hardware has already been changed," he told delegates at the October event.
To explain the new landscape, he used his familiar schoolyard analogy: a playground with no teacher, where "the distribution of power among the kids determines whether the yard is orderly or chaotic."
Unipolarity — "the bully everyone quietly pays lunch money to" — created an easy environment for investors. Multipolarity, he noted, is inherently more volatile.
Instability, Conflict, and a Surge in Innovation
Papic stressed that the rise in geopolitical tension is not a temporary cycle but a structural feature of the new system. Armed conflicts have surged since 2011, which he views as a sign that no single power can impose order.
"It seems the world is falling apart," he said, summarizing a common reaction from institutional clients.
However, he pointed out a surprising benefit from this scenario. Competition between states accelerates technological development. Geopolitical rivalries compel governments to invest in research and development programs related to energy, computing, transportation, and industrial capacity.
Unlike the era when much venture investment went into convenience apps — "cheeseburgers at 3 a.m." — he sees today's innovation cycle as more productivity-driven.
This trend is evident in the growing number of public sector programs across the U.S., Canada, and Australia. Each government has been working on multi-billion-dollar initiatives to support the production of energy and key commodities.
Papic also pushed back against the idea that the world is moving toward a strict U.S.–China bipolarity. True bipolarity, he argued, would be more inflationary and detrimental to global trade.
"In the schoolyard, there are two bullies… It's an orderly world, but it's not ideal," he said. Multipolarity, by contrast, allows for messy but ongoing economic exchange. "Enemies go to war with one another, and they continue to trade with one another right up until the war. That is the distinct feature of a multipolar world."
Australia's Place in the New Landscape
Papic sees Australia as uniquely positioned to benefit from the geopolitical realignment. Its resource base, institutional stability, and appeal to global capital make it, in his words, "a premier destination" in a world where nations are scrambling to secure supply chains and diversify reserves.
"If I'm a central banker, do I really just want to diversify into gold? It seems pretty 18th-century. Australia and Canada would be my top two picks," he said.
He also argued that Australia's "geopolitical promiscuity" — the ability to work pragmatically with multiple powers — is an asset rather than a vulnerability. "Issue by issue, Australia has to defend its interests, and America will respect them," he said.
While acknowledging Australia's challenging security environment, he added that real geopolitical influence requires economic strength. "You cannot have any geopolitical material power without generating enough economic well-being with which to pursue your interests."
Monetary Expansion Hinders Potential
Yet Australia's domestic economic picture presents a more complicated situation. Rising costs and monetary expansion are reshaping the country's investment fundamentals. Freelancer's CEO, Matt Barrie, has highlighted the inflationary consequences of expanding the money supply, driven by mortgage creation linked to migration.
"Supply of Aussie dollars up 11% a year. Wonder why prices are up 11% a year?" he wrote in a recent post on X.
Barrie argues that Australia is increasingly reliant on taxpayer-funded jobs. Meanwhile, soaring home-loan issuance injects liquidity that drives up prices across the economy.
Australia's record migration intake further complicates the picture. Net long-term arrivals exceeded 468,000 over the 12 months to September 2025, news.com.au reported. This historic high is pressuring infrastructure and driving up house inflation. As new arrivals enter publicly funded employment, the trend may mask private-sector weakness.
Government spending accounted for 27.9% of GDP in the June quarter, well above pre-pandemic levels, and public-sector wages have risen sharply. Unless the situation stabilizes, structural inflation could hurt the commodity sector. Rising production costs could reduce competitiveness at a time when the nation may need it the most.
Read Next:
Image created using artificial intelligence via Midjourney.
