This special edition of the Nomura podcast, recorded live at the Nomura Investment Forum Asia (NIFA) 2026 in Singapore, addresses macro-geopolitical structural shifts, regional security dynamics, supply chain hedging, and the emerging rules of a changing world order.
Hosts:
Euan Pinkney: Chief Southeast Asia Economist at Nomura (Singapore) [00:00:07]
Dominic Bunning: Head of G10 FX Strategy at Nomura (London) [00:00:14]
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Dr. Ng Eng Hen: Former Minister for Defence of Singapore (served from 2011 to 2025). [00:01:17]
Sir Richard Moore: Former Chief of the British Secret Intelligence Service (MI6, served a 5-year tenure until September 2025); currently Senior Strategist at Sixth Street. [00:14:13]
Production Credits: Edited and produced by John Dalton. [00:30:21]
Part 1: Structural Shifts in the Global Order & Regional Defense
Speaker: Dr. Ng Eng Hen (Interviewer: Euan Pinkney) [00:01:17]
The "Geopolitical Earthquake" of U.S. Foreign Policy
The Post-WWII vs. "America First" Order: A sharp structural transition is occurring away from the post-WWII liberal world order spearheaded by the U.S. and its Western allies—which established global institutions like Bretton Woods, GATT, the WTO, international financial rules, and the UN. [00:02:35]
Permanence of the Shift: The U.S. transition toward "America First" trade and foreign policies over the last decade represents a fundamental, permanent geopolitical paradigm change that will outlast the Trump administration. U.S. leadership across the board (including the President, Secretary of State, Trade Secretary, and Defense Secretary) has maintained a coherent, consistent stance that the previous rules-based order no longer serves the U.S. [00:01:45]
The Coming Tsunami: Dr. Ng describes this structural shift as a "geopolitical earthquake" and warns that a "tsunami is coming" that will fundamentally change global structures the world has relied on for the last 80 years. Global participants must focus on mapping out what the new rules are, who makes them, and how to adapt to make the most of it. [00:02:56]
Military Tactics & Cost Asymmetries in Modern Warfare
Drone Warfare & Supply Line Vulnerability: Lessons from conflicts involving Iran (specifically in the Strait of Hormuz) and Russia's war in Ukraine demonstrate that drone proliferation is now an absolute baseline in modern warfare. The operational focus has shifted to scaling drone numbers, developing countermeasures, and restructuring military forces to protect or strike deep into prolonged supply lines. [00:04:47]
Chokepoint Paralysis: Recent events show that a nominal deployment of a few missiles and drones can entirely paralyze critical international maritime waterways like the Strait of Hormuz. [00:05:32]
The Asymmetry of Cost: Defense forces face severe economic imbalances when deploying mechanical and technical countermeasures against low-cost assets. Firing a counter-response worth $500,000 to neutralize a hostile drone or missile worth $5,000 creates a direct path to financial bankruptcy. While market solutions exist, scaling them commercially will take considerable time. [00:05:39]
The Fog of War: Military outcomes rarely unfold as originally envisioned, whether looking at Russia’s invasion of Ukraine or U.S. strategies concerning Iran. Due to the "fog of war" and inherent uncertainty, states must hesitate before embarking on military action, prioritizing post-conflict exit strategies and objective achievement over initial deployment. [00:06:15]
Strategic Assets and Refining Infrastructure
Singapore’s Energy Cushion: The strategic value of Singapore's historical refinery capacity and bunker fuel infrastructure acts as a critical cushion during global maritime chokepoint crises. This position is a natural result of geography and long-term maritime trade, meaning infrastructure costs amortized over the last 50 years do not seem as high today. [00:07:15]
The Premium of Security: Maintaining domestic strategic reserves requires heavy state expenditure. For example, Australia imports 80% of its refined petroleum products because establishing local refining architecture can be cost-prohibitive. For governments, securing strategic assets (which can range broadly to include items like natural rubber, motherboards, or microprocessors) introduces financial trade-offs typically funded through taxation. [00:07:38]
U.S.-China Rivalry & ASEAN Dynamics
The Thucydides Trap & Coexistence: Great power competition is fundamentally aligned with historical precedents. The U.S. explicitly outlines its intent to maintain its dominance as the world's number one power for decades to come in its National Security Strategy, while President Xi Jinping drives China's ambitions for absolute regional strength. Referencing Professor Graham Allison's book on the Thucydides Trap, Dr. Ng notes that historically only 3 out of 16 great-power rivalries avoided open conflict. However, the post-WWII coexistence between the U.S. and a rising European power provides a template for potential accommodation. Any hot conflict in Asia would sacrifice an entire generation of lives and economic progress. [00:08:51]
The Shangri-La Dialogue & Defense Spending: At the recently concluded Shangri-La Dialogue, the U.S. Secretary of Defense called for an increase in defense spending across Asian allies. This aligns with the open declarations in the U.S. National Security Strategy that not every conflict will get American military help or attention, requiring regional countries to step up and bear their own security needs. [00:10:56]
Uneven ASEAN Responses: The U.S. paints a threat scenario requiring 3.5% of GDP spending to prevent any power from displacing it as world number one. ASEAN nations do not share that specific focus or fear regarding China's regional economic dominance. While Singapore has historically met or exceeded the 3.5% GDP defense spending threshold, other regional states may find the target financially unfeasible or unnecessary based on their individual threat perceptions. [00:11:42]
Part 2: Private Markets, Supply Chain Hedging, & Geopolitical Risk
Speaker: Sir Richard Moore (Interviewer: Dominic Bunning) [00:14:13]
Incorporating Geopolitical Risk in Private Markets
The Mandate at Sixth Street: Following a 38-year career in diplomacy and intelligence (culminating in a 5-year tenure as Chief of MI6 until September 2025), Sir Richard's transition to a senior strategist role at Sixth Street reflects a broader institutional push among private market investment firms to integrate geopolitical risk directly into their foundational risk-reward calculus. [00:15:06]
The Pace of Materialization: Market participants generally recognize macro risks, but the core challenge lies in the rapid, compressed pace at which these risks materialize. Unpredictable developments—such as the escalation in Iran, the pandemic's systemic shock to supply chains, and sudden geopolitical shifts—defy traditional modeling. Corporate survival relies heavily on structural agility and resilience. [00:16:22]
Deep Stack Vulnerability: Many global businesses have failed to drill down far enough into their operational layers. Organizations often lack a comprehensive understanding of dependencies deep within the technological and manufacturing stacks of their business, leaving them blind to hidden chokepoints. [00:17:40]
The Shift from "Just-in-Time" to "Just-in-Case"
Cultural Resilience: Organizations must cultivate an operational culture capable of absorbing misjudgments in highly volatile environments without immediately penalizing decision-makers, encouraging adaptive risk management. [00:19:06]
Sovereignty vs. Efficiency: Global institutions and rules that governed international commerce for the last 80 years have degraded. Even nations inside powerful military or economic blocs (such as NATO, the EU, or ASEAN) are forced to independently hedge their positions relative to Beijing and Washington, assess tariff exposures, and evaluate how much absolute sovereignty they must maintain over critical supply sectors. [00:18:46]
Macroeconomic Drag: The global shift from a "just-in-time" supply chain framework to a "just-in-case" model introduces structurally higher costs and lower capital efficiency. From an FX and macro perspective, this operational hedging means global markets must adapt to structurally higher interest rates and volatile inflation over the medium term. [00:20:35]
Middle East Dynamics and Global Waterways
The Breakage of Waterway Taboos: Even if diplomatic efforts succeed in reopening key shipping channels, a structural return to the historical status quo is unlikely. Iran’s actions have broken a critical taboo regarding the closure of the Strait of Hormuz, establishing a permanent precedent for regional leverage that it can remind the world of from time to time. [00:22:49]
Dynamic Challenges & Regime Policy: While the internal regime in Iran remains highly destabilizing to its neighbors and its own population (as highlighted by domestic events in January 2026), Western talk focusing openly on "regime change" has unleashed volatile defensive dynamics. This includes directly threatening the long-term business models built by neighboring Gulf States as they transition toward a post-fossil-fuel future. [00:23:29]
The Diplomatic Circle: Currently, both sides seek to avoid a resumption of full hostilities. Iran intends to limit negotiations strictly to the status of maritime straits and a ceasefire in Lebanon, attempting to bypass discussions on its missile and nuclear programs. Conversely, Washington remains rigidly focused on blocking Iranian nuclear advancement, missile proliferation, and the threats they pose to neighbors. [00:24:19]
The Red Sea Precedent: Long-term disruption trends are clearly visible in the Red Sea. Despite a substantial reduction in large-scale Houthi maritime operations over recent years, maritime traffic volume through the Red Sea choke point has only recovered to approximately 30% to 40% of its pre-crisis levels. Markets are currently underpricing the long-term supply chain premium required for oil, natural gas, and fertilizer exports originating from the Gulf, potentially because enthusiasm surrounding the AI push is masking these risks. [00:25:23]
Asymmetric Geopolitical Insulation
U.S. and China Cushions: The world's two largest economies are structurally insulated from the immediate brunt of these maritime supply shocks. The U.S. is cushioned by domestic energy independence, while China has built up deep strategic stockpiles and heavily invested in domestic renewable energy infrastructure. [00:26:16]
Middling Powers Under Strain: The true damage of these shipping disruptions falls disproportionately on intermediate and smaller economies. For instance, Singapore feels the direct friction of maritime transit delays, while India represents a massive scale of a mid-to-large economy heavily exposed to and stretched by these global supply chain bottlenecks. [00:26:43]
The Reconstruction of NATO Alliance Models
Permanent Currents: The "America First" perspective represents a deep, enduring current driven by a domestic sentiment that global allies have under-contributed to shared defense frameworks. This structural view will persist regardless of who occupies the White House. [00:27:13]
The 5% Defense Benchmark: To re-establish long-term balance within NATO and manage rhetorical frictions seen over the last few months, European allies must actively meet elevated defense spending targets, such as a 5% GDP threshold. Proving a more balanced distribution of financial burdens is essential to sustaining the American public's support for international treaty obligations. [00:28:36]
Re-educating the Next Generation: The foundational logic behind post-WWII multilateral institutions can no longer be taken for granted. A new generation of leaders and citizens has no living memory of the crises that birthed these arrangements, making it necessary for states to actively re-state the strategic case for global alliances. [00:29:25]
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