The Reserve Bank of Australia has signaled with unusual clarity that a profound transformation in the global political and economic environment is now underway. For several decades following the collapse of the Soviet Union, much of the international community operated under what many analysts referred to as the “peace dividend” — a period characterized by relative geopolitical calm, liberalized global trade, and reduced military confrontation. During this era, governments and corporations alike benefitted from smoother cross-border integration, more predictable supply chains, and reduced expenditure on security-related contingencies. However, that long-settled environment, according to the Bank, has decisively drawn to a close.
The new reality is marked by the intensification of strategic rivalries among major powers and the resurgence of geopolitical risks in regions once seen as steadily integrating into the global order. These dynamics are not merely abstract concerns for policymakers; they carry direct consequences for the cost of doing business, the shape of international trade, and the daily operations of multinational enterprises. The higher risks compel governments and firms to channel increased resources toward resilience measures—ranging from diversifying suppliers and building redundancies into logistics networks to investing in new security protections and compliance systems for volatile jurisdictions.
For businesses, this shift will likely manifest in higher baseline costs and more complex decision-making, requiring strategic foresight and adaptive models to remain competitive. For governments, the implications are equally daunting: instead of reaping the fiscal benefits of declining military and security obligations as in earlier decades, they now face pressure to devote greater resources to safeguarding national interests, securing supply of critical goods, and navigating tense alliances. At the heart of the RBA’s warning lies a reminder that globalization, once assumed to move inexorably toward deeper cooperation, is instead being reshaped by forces of fragmentation, competition, and cautious retrenchment.
In this environment, leaders across industries must prepare for a future in which the notion of stability cannot be taken for granted. Global integration remains important, but it is increasingly accompanied by defensive strategies that prioritize resilience and independence. The end of the peace dividend thus marks not only the conclusion of an era defined by confidence in steady progress, but also the beginning of a more uncertain and contested age where vigilance and adaptability will define success.
Sourse: https://www.bloomberg.com/news/articles/2025-09-12/rba-warns-geopolitical-upheaval-shows-peace-dividend-is-over
