The work of seven international artists shortlisted for the £40,000 Artes Mundi prize goes on display this weekend at Cardiff’s National Museum of Art. Presented every two years, it is the UK’s most lucrative visual arts prize. Though it may not be as headline-grabbing as the Turner, its scope is far more global, with the selected artists hailing from Europe, Latin America, India and Scandinavia.

Installed in the National Museum’s new contemporary galleries, the work of each artist engages with social reality and lived experience. Popular culture, politics, death and displacement are all addressed, stimulating questions about what it is to be human.

Swedish artist Miriam Bäckström explores memory and history. Her new large-scale tapestry, Smile As If We Have Already Won, depicts fantastical figures who appear to be made from fragments of mirror. The 12-metre-wide work evokes both cubist painting and sci-fi illustration. Ben Borthwick, artistic director of Artes Mundi, said: “It’s a game for you to work out.”

Bäckström’s work is one of several created especially for Artes Mundi. Another is by Cuban artist Tania Bruguera who asks what it is that defines an ‘immigrant’. Her Immigrant Respect Campaign invites visitors to sign a contract agreeing to promote immigrants’ rights. Look out for her Immigrant Respect ribbon symbol on billboards throughout the city. She said: “I like the idea of people encountering the work around them, without knowing it’s an artwork, and dealing with its message.”

Also taking an unconventional approach is Lithuanian artist Darius Mikšys. For his installation The Code, the artist deconstructed the Artes Mundi catalogue essay about his work to create a series of keywords. Feeding these search terms into the Museum’s databases, Mikšys used the results to select various objects from the collections. The motley assortment of objects creates an oblique portrait of the artist in which Japanese prints rub shoulders with fossils and a stuffed bird sits alongside mining artefacts.

“It’s a really exciting development that so many of the artists are creating new work for the exhibition,” said Borthwick. “Through these commissions there is a direct engagement with the social and economic context of Cardiff.”

Addressing the local context overtly is Slovenian artist Apolonija Šušteršič, whose video installation Politics “In Space”/ Tiger Bay Project looks at the redevelopment of Cardiff Bay. Surveying a range of opinions from local people, the work explores the area’s past, present and future.

A very different cultural context is tackled by Indian artist Sheela Gowda, whose installation Kagebangara uses rusty tar drums and plastic tarpaulins to create an abstract composition. However, her materials, sourced from Indian road workers, suggest more than mere formalism by alluding to the makeshift shelters of a migrant workforce.

More upbeat is Phil Collins’s Free Fotolab. The British artist offered people free processing and prints from their undeveloped rolls of films in return for the rights to use them. His resulting slideshow provides fascinating glimpses into the lives of strangers with a compelling mix of intimate family moments and holiday snaps. More work by Collins is being shown outside the nearby Chapter Gallery, housed in retro caravans. It’s the first year that Artes Mundi has presented work outside of the National Museum.

If Collins’s project celebrates life, Mexican artist Teresa Margolles contrasts this with a poignant meditation on death. In Plancha, water used to cleanse dead bodies in a morgue drips onto hotplates. Each drop evaporates instantly with a short hiss. The dimly lit room adds to the sombre atmosphere of this evocative work.

“I believe art can transform our understanding of who we are and the world in which we live,” said Borthwick. “So it is a real privilege to continue Artes Mundi’s commitment to artists who engage with the key questions of our time.”

The winner will be announced on 29 November.

Artes Mundi 5 runs until 13 January at the National Museum, Cardiff.