The world’s economic circuitry is being rewired. For decades, the US acted as the gravitational centre of global commerce, the consumer of last resort and a financial safe haven. Once the anchor of stability, it now transmits homegrown strains across international markets.
Fiscal brinkmanship, populist politics and eroding trust have turned internal vulnerabilities into global disruptions, unsettling a system still tethered to the dollar and US policy cycles. The country remains powerful, but its influence is being rerouted through new circuits towards Asia’s manufacturing hubs, the Middle East’s energy arteries and Africa’s demographic frontier.
This is evolution, not erosion, as the global system reboots around multiple centres of influence and adjusts to a new equilibrium shaped by the waning weight of US exceptionalism.
The shift is both structural and self-inflicted. Internally, Washington’s fiscal seams are fraying. National debt in the US surged past $38-trillion, while bitter partisanship repeatedly threatens the country’s credit standing.
Despite higher US interest rates, the dollar index, which measures the greenback against a basket of currencies, fell about 11% in the first half of this year — its largest slide in five decades, as investors fretted over fiscal sustainability.
US political polarisation has short-circuited institutional resilience, sending domestic shocks through the global financial system as investors price political cycles like market swings. Public trust in government has fallen below 50% in most advanced economies in 2025, according to the Edelman Trust Barometer, fuelling a populist loop that amplifies policy unpredictability. Institutions that once underwrote American exceptionalism, including an independent judiciary, an autonomous central bank and meritocratic civil service, are increasingly contested.
US innovation currents are slowing. Federal research & development spending has halved since peaking at 1.8% of GDP in the 1960s, while China filed six times as many frontier technology patents, including generative AI, between 2014 and 2023, according to the World Intellectual Property Organisation.
Restrictions on high-skilled immigration and student visas, often justified on security grounds, have further eroded the US’s soft power. The openness that once magnetised global talent is now constrained by politics, not economics.
Yet even as its foundations crack, America’s edifice still stands tall. The dollar remains embedded in 88% of global over-the-counter foreign exchange transactions and accounts for about 58% of world reserves, according to the Atlantic Council.
The US still outspends the next nine militaries and commands the deepest capital markets. Its innovation in AI, biotech and space remains strong, but dominance is no longer exclusive. Growth is shifting east and south, driven by China’s state-led “fat tech dragon” model, which prioritises scale over efficiency, according to the Centre for Strategic & International Studies. The Australian Strategic Policy Institute reports that China leads in 64 technology categories, compared with seven for the US.
Half of the world’s population now lives in the Valeriepieris circle covering India, China and Southeast Asia, which makes up just 10% of the planet’s surface yet generates more than a third of global output. The world’s centre of gravity is shifting to Asia and the Global South, both demographically and financially. Emerging-market central banks are diversifying away from the dollar into gold, pushing global reserves above 20%, the highest since the 1970s, reflecting hedging in a multipolar system.
Opportunity in dispersion
A weaker dollar and broader global demand ease debt pressures and draw capital to emerging markets, yet rapid policy and market cycles demand careful management of sentiment. Countries with macro discipline and credible reform, such as India, Indonesia and Mexico, will attract investment and benefit from supply chain shifts while others risk stalling, caught between competing blocs.
As the US shifts from a global anchor to a more inward-focused and multipolar role, South Africa must navigate a world of faster-moving markets and shifting geopolitical alignments. Reduced US leadership in trade and international institutions could slow reforms that benefit emerging markets, while the rise of bilateral deals increases competition for capital and market access.
At the same time, faster capital flows and currency volatility will test South Africa’s macro stability. The country must balance relationships with the US, China and other emerging powers as alignment becomes both geopolitical and economic. South Africa can leverage political stability, resources and reform momentum to attract investment in energy, critical minerals and technology. With a less dominant US reducing global security guarantees, strengthening regional alliances and diplomatic influence will keep South Africa plugged into a reconfigured global economy.
The world is not deglobalising. It is reglobalising without the US at the centre. To paraphrase former UK prime minister Tony Blair, in an address to Western leaders following Russia’s invasion of Ukraine in 2022, the age of Western dominance is ending, but the age of Western irrelevance has not yet begun. Nations that commit to strengthening institutions, talent and infrastructure can turn this global rewiring into a chance for growth. Those who cling to yesterday’s atlas will simply be left behind.
Packirisamy is chief economist at Momentum Investments
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