MESSAGE FROM THE CHAIRMAN

From an Unsustainable System to a Working System?

Mr. C.H.Tung started his political career as an opposition member in Mr. Chris Patten’s Executive Council. Jimmy McGregor, who sat in the same Executive Council, recalled to fellow members of the HKDF Mr. Tung’s favourite body language of using both hands to "smooth" things, as if there were a crystal ball in front of him. As a conservative person, Mr. Tung must have felt the full force of a maverick British politician who came in with an agenda of "Honourable British Retreat" – an exact opposite to the quiet conformity preferred by himself and the mandarins of the British Foreign Office.

Chris Patten brought two close advisors from the U.K. with him: Martin Dinham and Edward Llewellyn who worked with him when he was the Chairman of the Conservative Party. Nicknamed "Big Ghost" and "Small Ghost" by the Chinese press, Dinham and Llewellyn -- together with a few British civil servants -- formed Chris Patten’s inner cabinet. Jimmy McGregor, who came to Hong Kong in the early 1950s, was later brought into Chris Patten’s inner circle of advisors. Jimmy had some mellowing effect on Chris Patten in the last couple of years running up to 1997, but the mode was already formed.

A civil service that became the government
Under the Basic Law, the CEO of the HKSAR has the same absolute power as the Colonial Governors. But for some unknown reason, Mr. Tung does not seem comfortable in using his absolute power. He did not bring characters with the same calibre as "Big Ghost" and "Small Ghost" into the HKSAR Government. Perhaps there was no such character around him. Perhaps his friends and close associates in business were not interested. Perhaps he saw fit to use the experience of the civil servants, touted before 1997 as the best in Asia.

After 1997, the Executive Council has also remained true to its advisory role as defined in Section 1, Chapter VI of the Basic Law. Indeed, most observers will agree that the current Executive Council has been less active than many of the pre-1997 Councils. Miss Elsie Leung, Secretary for Justice was the only outsider Mr. Tung brought into the HKSAR Government in 1997. Antony Leung, who became the Financial Secretary in 2001, has yet to show his resolve and political skills vis-à-vis the public and the Civil Service.

As Jake van der Kamp puts it (see article), we now have an elected legislature that can only act as the opposition and a Civil Service that acts as the Government. Hong Kong must be one of the few places in the world where elected members of parliament stand one step behind their permanent secretaries at public ceremonies.

The problem with our Post-1997 system is that bureaucrats will always behave in a predictable fashion. With no real political master to check them, they will go about building bigger and even bigger bureaucracies and creating new statutory authorities that duplicate the work of those we already have. Hong Kong could afford this expensive form of government when times were good. But, in bad times, the prospect of a HK$60 billion deficit appeared. As Hong Kong tries to shift away from a structural reliance on "Land Tax", it also became apparent that our public sector has outgrown our ability to pay for it.

Very quietly, Mr. Antony Leung tried to explain to Legislative Councillors, many of whom still favour increasing public expenditure, that Article 107 of the Basic Law requires a balanced budget. No one will envy his job as the first "Bad-time Financial Secretary" in recent years. Many members of the public understand that public expenditure, now standing at 25% of Hong Kong’s GDP, is one of the core reasons for Hong Kong’s high cost and declining competitiveness. But whether Mr. Tung and Mr. Leung will have the resolve and the political metal to trim down public expenditure is yet to be seen.

The system is unsustainable
As an individual citizen, Mr. Michael Suen, Secretary for Constitutional Affairs felt that the Legislative Council will not act responsibly if it is not given responsibility. Mr. Suen, who does not hide his disdain for some Legco members, pointed out that none of the political parties in Hong Kong are backed by "Think Tanks". Instead of focusing on examining legislation, Mr. Suen felt that many Legislative Council Members oppose Government initiatives on very shallow grounds but offer no alternative policies.

To the business sector, he warned that they should not be surprised that "free-rides" will inevitably end one day. Instead of preferring to lobby government officials as in the Colonial days, the business sector should start thinking about the need to form a political party that is willing to contest elections and argue for pro-business government policies in public.

Although Mr. Suen said he favours more directly elected seats as a private citizen, he also warned that the wider national interests of China and the Cross-Straits relationship must be taken into consideration. He warned that Hong Kong people should be cautious in reforming their own political system and said that this message came from the very top of the Central Government. We should understand the opposing forces of the Chinese leadership in wishing Hong Kong to become a model for Taiwan’s reunification and in realizing that our Mainland compatriots feel that we already enjoy much more than we deserve, he said.

Mr. Suen described part of the constraints when Hong Kong goes about reforming this unsustainable system. He did not respond when asked where the forces for building bigger and bigger governments came from.

Towards a working system
Mr. Tung tasted political success when his popularity rating, as reported by the "Anti-Tung" Public Opinion Programme (http://hkupop.hku.hk), rose significantly when he admitted, while announcing his candidacy for a second term on 13^th of December 2001, that his administration might have some shortcomings. This boost must be sweet for Mr. Tung since the public seemed to respond fairly positively to his personal resolve.

Mr. Tung will need to show even more personal resolve and the skill to rally public support when he starts to introduce unpopular but necessary public policies, such as trimming down public expenditure and the privatization of many government enterprises and operations. The principal officials, to be appointed by Mr. Tung under his new accountability system, might be able to help him. And the line up of Mr. Tung’s new government – the appointed Principal Officials and Executive Council – will very much set the tone of his second term of office.

The big question is, will Hong Kong find a direction and move towards a working political system supported by an open, civic society which the rest of China could follow? Will we become proud of Tung’s leadership? Or will we still find ourselves muddling about in an unsustainable system full of partial and unconnected solutions after ten years of Tung’s rule?

Alan LUNG Ka-lun, Chairman