Strategic coupling, path creation and diversification: Oil-related development in the ‘Straits Region’ since 1959

Abstract

A growing body of literature in evolutionary economic geography (EEG) and global production networks (GPN) have pointed out the role of institutions in addressing questions of subnational regional path creation and uneven development. Through a synthesis of the EEG and GPN approaches, this paper proposes a framework to highlight the roles and functions performed by state-linked actors in the diversification and path creation. The trajectory of mid-stream oil-related development in Singapore and the wider Straits region since 1959 was used to illustrate how the state implements its industrial strategies and policies through different forms of state and state-linked actors over time, which in turn generates a symbiotic state-business relation for related diversification and subsequent coupling-recoupling-decoupling and path creation dynamics. Specifically, the establishment of oil-related business in Singapore (a city state without oil reserves) was examined through the instrumental roles and functions performed by various state-linked actors on the establishment of structural coupling with TNCs on oil storage facilities between 1959 and 1986, and then functional coupling with TNCs on oil and commodities trading between 1987 and 1997 before decoupling the lower value-added oil storage businesses and developing as a regional energy trading hub since 1998.