The Asian Financial Crisis was a sequence of currency devaluations combined with other events that began in July 1997 and raised fear of a global economic meltdown. In those days it was referred to as a financial contagion because it was spreading widely over Asia. Just like Covid-19 which is a biological contagion that has spread widely around the world now. But thankfully this financial contagion was contained within Asia.
I was working in Shanghai at the time. Our biggest worry was what would happen to our money. Our saving and investments. We were worried that China would devalue its currency. And quite suddenly it seemed like all of Asia had gone into a severe recession. The warning signs were there but somehow no one thought it could happen. The Japanese economy was no 2 those days and was strong. The Chinese Renminbi was pegged to the US $ and remained steady. So was the Hong Kong $. Both were hanging on and making sure that they were strongly aligned and pegged to the US $.
A few months before the recession hit us, I had offered a job to a friend in Taiwan, a strategic planner who was really very good. But he had already accepted a job in Jakarta. He preferred the Indonesian lifestyle of large houses, swimming pools, and Indonesian domestic help he said. Instead of Shanghai’s skyscraper living. I felt sorry I was losing him to creature comforts in Indonesia. China was after all the place to be working even those days. A complex market on the move and an economy that was promising to overtake most of the rest.
But the first signs of the recession really strengthening were when I called my other offices in Hong Kong, Singapore and the rest of Asia. I would call up the reception and ask to speak to a friend and the receptionist would very sweetly tell me that my friend had already left the company and would not be coming back. (a polite expression for ‘fired’).
Then the friend that I had offered a job in Shanghai called me back after a few weeks. He told me his tale of woe. He had taken up the Jakarta job in Indonesian Rupiah which had devalued 16 times to the dollar. In other words, my friend would be earning a sixteenth of what he was offered in his appointment letter if converted to US $. He begged me to accommodate him in China. I still had a vacancy so I got him over.
And of course, I was worried about myself and gave a hard thought to how to save my job. The next day I went over to my boss and offered to do another job (which was vacant) in addition to my current job. My boss was pleasantly surprised and accepted my offer. My remuneration would remain the same. Basically, I would do two jobs for the price of one. I was then given two business cards. Depending on which job I was doing I would carry the appropriate business card. Life went on like this till the recession ended. I managed not to get sacked. And once the recession was over my second job was taken away.
What did I learn from that experience?
Firstly, you need to think on your feet and go into problem-solving mode. You have to accept that life will be tougher in the short-term and you might have to make sacrifices to stay in the same place. You are swimming against the tide here, so hard as you try you are going to be much slower than in the swimming pool. You are going to have to push harder than you did before. Think of innovative solutions.
Think of ways in which you can secure your job. COVID-19 is displacing a lot of people in every economy and you don’t want to be one of them. Be thrifty during tough times. Thrifty for two reasons: 1) Because during bad times supply chains get blocked and there is not enough for everybody 2) Thrifty because you can’t afford to spend like you did and it is important to bring down your living costs to a bare minimum. In the case of COVID-19 because of the lockdown in many countries, your expenses might come down automatically. There are no restaurants, theatres, or pubs to go to. But don’t go back to your normal life once the lockdown is over. Hang in there for a while. COVID-19 isn’t over until they find a vaccine for it.
Stay well. Stay safe. Ride this wave. It will soon be over.