July 4, 2017

How did discourses of the economy shape the coping strategies pursued by the government and firms during the Asian Financial Crisis?

Beginning in Thailand in July 1997 with the devaluation of the Thai baht, the Asian Financial Crisis (AFC) rapidly swept across Southeast Asia and Japan to trigger the devaluation of Asian currencies and slumping of Asian economies along with financial and political upheavals.
A/P Karen Lai and Prof Henry Yeung (Department of Geography), in Contesting the State: Discourses of the Asian Economic Crisis and Mediating Strategies of Electronics Firms in Singapore (2003), explore the discourses of external threats and vulnerability activated by the Singapore government during the late 1990s to justify policy and decisions. Political leaders used metaphors such as ‘typhoon’ and ‘earthquake’ in speeches to represent the crisis as an uncontrollable force caused by external factors that swept across Asia. At the same time, they refer to the experience of electronics firms in Singapore during the AFC to show how the firms’ mediating strategies challenge state-led narratives that the crisis was an entirely ‘external’ and ‘unpredictable’ phenomenon. Interviews and surveys conducted with firms revealed counter-discourses that saw the government’s excessive dependence on the electronics industry and weak diversification of the economy among the reasons for the crisis in Singapore.
Lai and Yeung’s study highlights the value of viewing firms as important sites for contesting state-led discursive understandings of the AFC. Additionally, they show how different understandings of the economy guide and shape the material processes and practices pursued by governments and firms. In the case of the AFC, discursive understandings of the economic crisis guided state-led policies such as the upgrading of workers, and prompted firms to pursue product diversification and information-gathering as coping strategies to weather the financial storm.
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