Nearly 1 in 2 business leaders in S'pore ready to tackle geopolitical and other challenges: Report

Straits Times

11-06-2025

Kroll surveyed 1,200 C-suite executives from more than 20 markets including the United States, Britain, Hong Kong and Singapore in February. PHOTO: LIANHE ZAOBAO
Nearly 1 in 2 business leaders in S'pore ready to tackle geopolitical and other challenges: Report
SINGAPORE – Business leaders in Singapore are among the most confident globally about their level of business preparedness when it comes to dealing with challenges ranging from geopolitical tensions to cyber-security threats and developments in the artificial intelligence (AI) space.
In its first edition of the Business Sentiment Report, global risk and financial advisory firm Kroll found that 48 per cent of respondents in Singapore were 'very prepared' to face the challenges.
This is higher than the 34 per cent in the Asia-Pacific region and 38 per cent globally.
Kroll surveyed 1,200 C-suite executives from more than 20 markets such as the US, Britain , Hong Kong and Singapore in February .
About one-third of all those surveyed work in the financial services industry, and more than one-fifth are in technology companies.
The report highlighted geopolitical tensions, such as tariffs, as one of the most significant business challenges facing organisations over the coming year.
The survey was conducted before US President Donald Trump slapped 'Liberation Day' tariffs on economies on April 2, which he then put on hold as he strikes trade deals with different nations.
Singapore runs a goods trade deficit of US$2 .8 billion (S$3.6 billion) with the US, according to data from the Office of the United States Trade Representative. This means that the Republic imports more goods than it exports.
As a result, businesses here would not have expected to be slapped with tariffs, said Mr Joshua Tucker, senior geopolitical adviser at Kroll. Singapore was hit by a baseline tariff of 10 per cent.
Mr Tucker said business leaders here were probably a bit too optimistic about their ability to predict the US policy on tariffs.
The survey had found that 22 per cent of Singapore business leaders identified geopolitical tension as a significant business concern, compared with 33 per cent globally and 28 per cent in the Asia-Pacific.
Insead economics and political science professor Pushan Dutt believes business sentiment should have since shifted substantially after the imposition of the tariffs.
'One school of thought is that we will live in a Taco (Trump Always Chickens Out) world – that his bark is worse than his bite and he always backs off. However, what Trump has induced in the global economy is uncertainty,' he said.
He explained that Taco-like behaviour increases uncertainty as firms and political leaders will not be able to ascertain how long the tariffs will be imposed for, if and when they will be lifted and how the conditions and types of tariffs could evolve.
'We should distinguish between risk and uncertainty – the first is about known unknowns and the second is about unknown unknowns. We have been catapulted into a world of uncertainty and should not live in denial,' he added.
Mr Tucker said that while tariffs, like other direct business costs, can be factored into decision-making, there are other indirect costs stemming from uncertainty over the US tariff policy.
If businesses do not know what tariffs will be in 30 days, six months or a year, they will not be able to plan ahead to mitigate the effects of tariffs . They may thus be less willing to take large risks, make acquisitions or enter new markets, he added.
Mr Nick Baker, co-lead for trade and customs at Kroll, said companies risk falling into 'analysis paralysis', where they are constantly reassessing strategies but not taking action to implement their plans.
Mr Tucker noted that Singapore is heavily dependent on trade with other economies. The 10 per cent baseline tariff on the Republic , as well as higher tariffs on neighbouring economies, could thus have an 'outsized economic impact on businesses'.
Kroll stated in its report that whether companies can weather the 'economic and geopolitical upheaval' will depend on their underlying financial health.
Singapore companies scored relatively well on this front, with 20 per cent of business leaders here saying they have full confidence in their companies' financial health, versus 9 per cent of respondents in the Asia-Pacific and globally.
Ms Annabelle Cai, managing director in the restructuring practice at Kroll, said 'strategic measures' announced in Singapore's Budget 2025, such as the 50 per cent corporate tax rebate, enhanced wage support for lower-income workers, and more funding support for firms to make AI investments, will help firms to manage rising costs and drive sustainable growth.
A stable government and business-friendly environment contribute to business confidence in Singapore, Ms Cai added.
On the whole, Dr Huynh Bao Tan, senior lecturer of economics at the Singapore Management University, stresses that while Singapore is impacted by the imposition of the tariffs, the 10 per cent levy is imposed across the board, and hence will likely have minimal impact on Singapore's relative competitiveness overall.
'Overall, I wouldn't be surprised if businesses' sentiment has dropped a little (from the time the survey was conducted), but I'm not really expecting things to have changed much,' he said.
'Markets seem quite hopeful that there'll be good outcomes regarding the trade negotiations,' he added, referring to the US trade talks with China as well as the European Union.
Additional reporting by Megan Wee
Join ST's Telegram channel and get the latest breaking news delivered to you.