Staff Writer 
Open Forum
Izak Odendaal
THE 2026 FIFA World Cup has been a welcome distraction, but the “Football Unites the World” motto is a stretch. The world seems more divided than ever, and more uncertain.
The US, a co-host, remains at war with Iran, though a fragile ceasefire has allowed oil supplies to start normalising and energy prices have declined rapidly.
The reason the present geopolitical environment feels so uncertain is not so much that there are more conflicts between states ― most are usually often overlooked in the Western media anyway ― but because the Western countries are involved, either directly or indirectly.
More specifically, the US has gone from being the anchor of the so-called “rules-based international order” to a source of instability, while Europe must deal with Russian revanchism on its doorstep.
This sense of geopolitical instability is further driven by domestic political upheaval.
Arguably, the traditional left-right political spectrum that dominated politics in the 20th Century is now a matrix. Politicians are not only defined by whether they believe in free markets (right) or government intervention (left), but also by whether they are mainstream politicians who believe in institutions, or populists who want to tear up the system.
Take the UK as an example. Within the space of a few days, it commemorated the 10th anniversary of the Brexit referendum while also learning that it would soon have a new prime minister.
The two are linked, as the Brexit vote and rise of populism have reshaped British politics, probably ending the 100-year-old two-party system.
There have been six prime ministers in the past decade ― soon to be seven ― compared to only eight over the previous 50 years.
Populism has long stalked Latin America and elsewhere, but the Brexit vote to leave the European Union in June 2016 was probably the first time it forcefully emerged in the English-speaking world.
It was a classic exercise in scapegoating, blaming Britain’s problems on the bureaucratic elite in Brussels and migrants, while offering a single quick-fix solution: leave the EU and everything will get better.
Instead, many things deteriorated and today a majority believe that leaving the EU was a mistake. With characteristic British humour, this Brexit regret is known as “Bregret”.
There was no immediate post-Brexit recession, but there is little doubt that the UK economy is smaller today than it might have been had it remained within the EU.
Moreover, the timing of the vote couldn’t have been worse, since the world has changed. Brexiteers thought they could turn the country into a free-trading champion, but the global free trade agenda has been under attack from US President Donald Trump, the other symbol of populism.
The rise of populism in the West is, of course, a multi-faceted phenomenon.
However, there is broad agreement that at least four key trends are at play:
Deindustrialisation, driven by the rise of China and other outsourcing hubs as well as automation, saw the decline of well-paying manufacturing jobs for low-skilled workers. These losses have been concentrated in “Rust Belt” communities.
A loss of trust in institutions, particularly following the 2008 Global Financial Crisis, when there was the broad and not entirely unfounded view that the bankers responsible for the calamity were bailed out, while ordinary people were left to suffer (a case of privatising the gains but nationalising the losses).
A sense that the culture is shifting, whether through social issues or more immigrants who look, speak and worship differently. This creates fertile ground for politicians to stoke “culture wars” and divide the population, amplified by social media echo-chambers.
Rising inequality and a sense that the system is rigged in favour of elites. It took a hundred years between John D Rockefeller becoming the first billionaire and Jeff Bezos becoming the first centibillionaire (worth $100 billion) in 2017. Remarkably, it took only another nine years before Elon Musk became the first trillionaire. It is not just about tech moguls, however. In many Western countries, there is a more mundane but equally frustrating form of inequality as expensive housing markets lock young people into a lifetime of renting, while benefitting older homeowners. According to the Office of National Statistics, the average London home cost the equivalent of 4,4 years of average annual income in 1995. Three decades later, that figure had risen to 10.6 years.
None of these causes of populism and political division show clear signs of improving, meaning that politics could get even more challenging over time.
If artificial intelligence (AI) disrupts labour markets to the extent its proponents argue it will, popular anger could rise further. AI could also be a handy tool for sowing misinformation and further undermining trust.
Immigration, a big driver behind support for far-right parties across Europe and the Make America Great Again (Maga) movement in America, will likely become even more of a vexed issue.
This is because birth rates across the Northern Hemisphere have fallen well below replacement levels. Immigration is the only way to ensure a stable, never mind increasing, labour force.
Countries face a choice: Limit immigration in the name of social cohesion and shrink; or accept more immigrants and grow.
The challenge then becomes assimilation, something European countries have struggled with.
Immigration is an emotive topic in South Africa too.
The country has been on edge this week, with anti-immigrant protests and concerns that tensions could escalate given its history of xenophobic violence over the past 20 years.
Of course, the labour market dynamics are very different. In rich countries, migrants tend not to compete with locals, often doing the low-skilled jobs locals do not want.
In South Africa there is intense competition for low-skilled work, but it should be acknowledged that migrants also bring entrepreneurial drive and talent.
The government acknowledges that the country’s borders have been far too porous, though the estimated foreign-born population of three million people is relatively small compared to richer and older countries.
A crackdown on migrants risks a different type of backlash.
If the rest of the continent develops a negative view on South Africa over alleged xenophobia many people from other African countries pointedly supported Bafana Bafana’s opponents it reduces the country’s soft power on the continent.
This could also create headwind for South African businesses. Since the country’s economic future is intertwined with the rest of Africa, this does tremendous damage.
* Odendaal is an investment strategist at Old Mutual Wealth
