Forum: Distant conflicts have real, immediate impact on SMEs here
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For many of us in Singapore, geopolitical disruptions are something we follow from a distance, through news alerts, policy discussions and market updates.
There is often an assumption that they will not reach us. But in today’s global economy, distance no longer protects us the way it once did.
Across South-east Asia, small and medium-sized enterprises (SMEs) are already facing a consequence of recent geopolitical uncertainty.
I am seeing at first hand that supply chains that once felt stable have become unpredictable overnight. My husband helps run a third-generation family manufacturing business operating across Indonesia, the Philippines, Vietnam, Malaysia and Singapore.
Like many mid-sized enterprises in the region, their operations depend on a web of suppliers spread across borders – networks highly sensitive to exchange rates, regulations and energy prices.
After the first disruptions, he spent much time on his phone, renegotiating with suppliers. Some said deliveries were uncertain because their own suppliers had stopped quoting prices. One suggested cancelling an order to prioritise larger customers.
When uncertainty enters a supply chain, it spreads quickly. Existing purchase orders must be renegotiated. Businesses must decide whether to absorb rising costs or pass them on to customers. Some raw materials cannot be guaranteed beyond a week.
SMEs form the backbone of South-east Asia’s economy, accounting for more than 97 per cent of all ASEAN businesses. Unlike multinational corporations, many lack the financial tools to hedge commodity risks or absorb prolonged disruptions.
During such times, resilience becomes more than a business skill. It becomes a responsibility to employees, customers and the survival of a family enterprise built over generations.
Geopolitical conflicts may begin far away. But in an interconnected trading system, their effects often hit much closer to home than we expect.
It is a reminder to be more patient and understanding with the people, businesses and communities quietly navigating these uncertainties.
Lim Yee Chuin
