Jewelry giant Pandora's managing director for Asia, Thomas Knudsen, declared that "ultimately, it will all be passed to the consumer," revealing the strategy of capital to offload rising operational costs onto the working class. This admission came as more than 30 CEOs and industry leaders convened at the annual Converge Live event in Singapore last week, grappling with a "new operating reality" where war, inflation, artificial intelligence, and supply chain shocks are now considered structural rather than exceptional events.
Who Bears the Cost
Captain Rajalingam Subramaniam, CEO of shipping services firm Fleet Management Limited, reported that over "2,000 vessels in the Persian Gulf [are] stuck," directly impacting "nearly between 20,000 to 30,000 mariners." This disruption contributes to a projected "higher for longer in terms of supply chain cost," a burden ultimately borne by those who rely on these supply chains for essential goods.
Executives noted that while affluent shoppers remain "resilient," the working class and middle segment are forced to adapt to rising prices through altered consumption patterns. Hans Patuwo, CEO of Indonesia-based superapp GoTo, observed that middle-segment consumers are "willing to sacrifice assortment" and "willing to sacrifice speed for cheap," indicating a reduction in quality of life.
Martha Sazon, CEO of GCash operator Mynt, added that consumers in the Philippines are "really being very selective" about their purchases, reflecting a tightening of household budgets as real wages are eroded by inflation. This selective purchasing behavior underscores the pressure on working families to stretch their limited incomes.
Capital's Response to Structural Contradictions
Business leaders across banking, energy, shipping, technology, and manufacturing articulated a need for "maximum flexibility" and continuous "stress test[ing]" to "be ready for the worst case scenario," according to DBS CEO Tan Su Shan. This reflects capital's drive to insulate profit margins from systemic instability, even as the costs are externalized onto the broader population.
Stanley Szeto, chairman of apparel manufacturer Lever Style, highlighted that "long-term planning is becoming more and more difficult" due to rising "material prices" and shipping disruptions, which he described as "very inflationary." These pressures on production costs are consistently framed as challenges to profitability, not as a crisis for the general populace.
In response to these pressures, Lever Style has "sharply increased the use of air freight despite higher costs compared with sea transport," prioritizing speed and flexibility. This decision, aimed at maintaining market flow and competitive advantage, further demonstrates how capital absorbs higher operational expenses only to pass them on through increased consumer prices.
Thomas Knudsen of Pandora explicitly shifted from a "just in time" to a "just in case" operational model, emphasizing "the agility of adaptation" as key to navigating these structural challenges. This strategic pivot aims to secure supply chains for continued surplus extraction, rather than addressing the underlying causes of global instability.
The State's Role in Managing Crisis
The role of the state in managing these contradictions was evident in remarks concerning consumer resilience. GoTo CEO Hans Patuwo noted that "lower-income consumers are helped by government support." Similarly, Mynt CEO Martha Sazon stated that "government subsidies and overseas remittances" are "helping cushion the blow" for consumers in the Philippines.
These state interventions serve to stabilize demand and prevent widespread economic collapse, thereby preserving the existing economic order. Such measures manage the system's contradictions by offering symbolic concessions that prevent deeper structural challenges, rather than addressing the root causes of precarity and wealth concentration.