Global self-reliance drive will strain capital, push burden to markets: BlackRock’s Larry Fink

[SINGAPORE] A global shift towards economic self-reliance will drive a surge in capital needs that governments and banks cannot meet alone, said BlackRock chairman and chief executive Larry Fink.

“The world is reorganising around self-reliance – and that’s expensive,” Fink wrote in his 2026 annual letter to investors, a closely watched document that often sets the tone for global capital allocation trends.

He observed that countries are increasingly investing to reduce their dependence on one another, as well as to enhance their resilience and competitiveness in energy, defence and technology.

But that shift comes at a cost.

“Every step towards self-reliance means, at least temporarily, giving up the global economies of scale that kept costs down for decades,” Fink wrote.

For instance, sourcing critical minerals outside China and building semiconductor fabrication plants outside Taiwan will cost “significantly” more.

Capital markets to play a bigger role

Historically, governments, banks and corporations absorbed the bulk of financing for large economic transitions. Those channels are no longer enough, Fink noted.

“Banks alone can’t finance what a growing economy needs,” he wrote, pointing out that governments are carrying “record debt”.

Going forward, capital markets will play a growing role in funding these shifts, he added.

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Yet, too few people are invested in capital markets, Fink noted, adding that this risks deepening wealth inequality precisely when the stakes are highest.

Artificial intelligence (AI) will “create significant economic value”, much of it financed through the capital markets, he noted. However, history suggests that “much of that value accrues to companies that build and deploy them, and to the investors who own them”.

Without broader market participation, the self-reliance boom could repeat this pattern, leaving workers further behind.

How Asia markets are broadening investor access

Broadening participation in the capital markets is one way to address the issue. Fink flagged India and Japan for how they have expanded access to investing in Asia’s capital markets.

India’s story, he wrote, is one about “building modern financial infrastructure from the ground up”.

He pointed to the success of BlackRock’s joint venture with Mukesh Ambani’s Reliance Group, JioBlackRock. Supported by the proliferation of smartphones, the venture brought in more than a million investors across the country in less than a year.

For Japan, Fink noted that the market had been “starved of the capital (it) needed to grow”. This came as Japanese households kept their savings in cash and low-yield deposits, part of Japan’s larger story of economic stagnation that began in the late 1980s.

Change came in 2022, when a liberalisation of tax-advantaged investment accounts brought nearly 10 million new investors into domestic markets in three years, driving the Nikkei 225 from around 28,000 to over 50,000.

Fink also noted that technologies such as tokenisation – the digital recording of asset ownership – could lower barriers to investing and further democratise access globally.

Tokenisation would allow ordinary savers to hold fractional stakes in infrastructure and private credit through a single digital wallet, broadening participation beyond traditional investors.

“Much of today’s economic anxiety comes from a deeper feeling that capitalism is working – just not for enough people,” Fink added.