Insight
There’s nowhere to hide from political risk
SHANE WHITE, CONTENT MANAGER, ANZ | MARCH 2019
Businesses can no longer ignore the spectre of political risk, according to ANZ Chief Economist Richard Yetsenga. Success will come from recognising and acting on it.
“Political risk [like the ongoing US-China fallout] is part of your risk-management mandate wherever you operate,” he told ANZ’s Finance & Treasury Forum in October.
“This is not just an issue for parts of the global economy or emerging markets. Advanced economies are very much caught up in this.”
“Businesses should now expect actually that the terms of trade, the tariffs they face, or the terms of access to markets potentially can change quite quickly."
Speaking at the forum in Singapore, Yetsenga said businesses should be vigilant as the “rules of the game”, such as technology , evolve.
“Recognising those issues is the first step to getting in front of them,” he said.
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“This is not just an issue for… emerging markets. Advanced economies are very much caught up in this.”
ANZ CHIEF ECONOMIST RICHARD YETSENGA
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Ooi Boon Peng, CEO Singapore at Eastsprings Investments said the current geopolitical environment is redefining “what the economic alliances and relationships” of the future will look like. This inevitably results in uncertainty for markets.
“Generally that will lead to slower investment, more reluctance among businesses to invest in capital,” he said. “GDP growth regionally will be also affected.”
Former Australian Trade Minister Andrew Robb encouraged businesses to expose fledgling leaders to political interaction early to ensure they are prepared.
“[That’s] a huge message for boards,” he said.
Shane White is Content Manager, Institutional at ANZ
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