MESSAGE FROM THE CHAIRMAN

From Giving Hell to Charting Hong Kong’s Future

"You are giving me hell," said Mrs. Fanny Law as she made her entrance to the HKDF luncheon. This is an unusual greeting to say the least. One could take it as an exchange between friends. Or it could be taken as a rather defensive remark for a senior government official to make.

Apparently, my comments about some negative and counter-productive government interventions have caused some problems for the Secretary of Manpower and Education.

The Government, while happy to spend billions on physical infrastructure or the "hardware" part of economic construction, has been unwilling to spend money on upgrading the knowledge and skills of those who are already employed. And where the Government does decide to do something, money tends to be spent exclusively on building up government subvented organisations such as the Hong Kong Productivity Council (HKPC) and the Vocational Training Council (VTC). These organisations operate as competitors to private sector companies or as government bureaucracies as and when the situation suits them. Many in the IT and consultancy industry have complained that HKPC has used unfair tactics to compete against them. Instead of helping those who are in need of skills upgrading, the HKSAR Government competes with the private sector suppliers for business, so killing off new, diversified but usually small knowledge-based firms. Ironically, these very firms are, or should be, the building blocks of Mr. Tung’s "Knowledge Economy".

Skills upgrading is just one of the examples which illustrate the tremendous power Government officials have over our livelihood. The inadequate political system leads Hong Kong to inadequate opposition and inadequate solutions.

As good bureaucrats, Civil servants also have a "line" to take. Civil servants are not used to challenges to their policy thinking. To maintain some appearance of openness, Government officials rely on Advisory Committees appointed by themselves to give advice on policy and operational issues. But, apparently it is still more usual within these Advisory Committees to agree with Government officials than to disagree.

Until a renewed political system generates real political masters to supervise the Civil Servants, the "line" taken by Civil Servants will not be breached. Inadequate thinking and inadequate policies in many areas will continue to debilitate Hong Kong.

Some government officials who came to our speaker luncheons have said to us that the forum for rational discussion it provides is much appreciated. Other Government officials, whose views are recorded in this newsletter told us how they think Hong Kong should move forward in the areas of manpower and education, social welfare and healthcare. We also have a few speakers who have harsh words for the Government. Hong Kong, is the only territory in China that is capable of coming up with such diverse ideas and opinions.

Mr. David Webb, editor of webb-site.com, also promoted Corporate Governance, the process by which accountability of the company to its shareholders is assured. Without a high degree of transparency and without respect for the interests of shareholders a company will not attract investors. Government is beginning to listen to Mr. Webb. But many of the businessmen that control Hong Kong’s listed companies are reluctant to observe good corporate governance principles.

Hong Kong businessmen in Hong Kong have also been reluctant to see the introduction of more democracy. They feel that democracy will lead to chaos, to socialism. They are largely reluctant to participate in the running of their own society through the democratic process, preferring instead the "Colonial System" of relying on the Civil Service to take care of their interests.

The problem with the system preferred by businessmen is that it is an inadequate system. Civil servants are incentivised to behave like good bureaucrats and not good politicians. They are not suited to the task of building social consensus and leading society through necessary change. There is insufficient transparency, and insufficient attention to the interests of ordinary people. Such Government cannot win the confidence of the people - the "small shareholders" of our society. Consequently, the "Colonial System" is leading to stagnation, which in turn is no help to Hong Kong business.

If anyone still thinks that Mr. Tung will not be around for a second five-year term, then he is probably not facing facts. Insiders say that Mr. Tung already has a candidate list for a ministerial system and he will implement this plan after taking care of his "election".

The challenge for Mr Tung will be to translate his power into effective government of Hong Kong.

We will need more patience and wait a little longer before Mr Tung will introduce a "Ballot Box" for the HKSAR Government. But greater transparency and accountability are needed if he is to win the confidence of Hong Kong people. At the very least, Mr. Tung is now showing some resolve. Mr. Tung had an agenda when he came into office. It was the smooth transition of Hong Kong from British to Chinese rule. He has been at this for four years and many now say that he took Hong Kong through an unexpectedly smooth transition. What will be the agenda for his second term? "Asia’s World City" is not specific enough. Mr. Tung should tell us – the people of Hong Kong, what will be in store for us in his next six years of office.

Alan LUNG Ka-lun
Chairman