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Hong Kong in Re-organization

 (Letter to Hong Kong ¡V 2003.7.19)


We all know that Hong Kong Incorporated has been in political and financial troubles for sometime. A reshuffle of management was called for and now partly answered with the sudden departure of three top Government executives. The community is now ready for more changes and the gear is shifted to a¡¥re-organization¡¦ mode. Expectation is running high on what the Chief Executive will do next.

So far, the Chief Executive has been placed in a rather defensive position. He has appeared to be reacting only to changes as they sprung up sporadically in a random sequence of events. I personally do not believe that the repercussions of the historic march on the 1st July, has come to a finish line. I think that more heads will roll and that there has to be more fundamental changes in politics, fiscal and economic policies before the minds and souls of those half a million who took the streets in that grueling hot summer day can be put to ease. The messages are clear: a more open and responsive Government; a more caring set of fiscal and economic policies when times are really hard.

The Chief Executive has already shown some decisiveness in accepting many major amendments to the National Security Bill. Though rather unwillingly, he has let go of both Mr. Anthony Leung and Ms. Regina Ip. Mr. Tung has further uncharacteristically accepted that mistakes of the Government could have been made. He has solemnly pledged to open up more communication channels with the People of Hong Kong from all walks of life. This is a good start but I would submit, still not far enough. He must be bold and decisive in completing his cabinet reshuffle, once and for all. He must do so within the next week right after he has a chance to exchange views with the Central Government over the weekend. This will be a crucial move to restore stability and confidence so that he can make a fresh start without the old political baggage.

The Government must also realize that the Legislative Council has always been well positioned to become its opposition. The Legislature is also well equipped with the necessary powers to severely hamper the Government if it chooses to do so. As a matter of constitutional principle, the executives must work closely with the legislature rather than to try to enslave it. Power sharing with the legislature is essential to a stable Government in the long run and must not be simply treated as an option. Otherwise, the legislature will become increasingly militant through the voters¡¦ choice if the Government still turns on its deaf ears. With these thoughts in mind, the new team must, in my view, also tackle the following issues in the near term:

A) Political Structure:

A consultative exercise should be launched within a reasonably short time-frame. It is time to explore and debate on novel and creative ideas both acceptable to Beijing and the People of Hong Kong. The National Security Bill is a prime example that sensitive issues that require a measure of input from Beijing will necessarily take a long time to resolve satisfactorily. There must be no illusion that the Government can still pull another quick one on Hong Kong without having to take exceptional risks of another serious last minute misfire.

In as early as1998, I have already proposed that the Legislative Council could be expanded to 90 seats in 2008 with 30 new seats assigned to geographic direct election. The present 30 Functional Constituency (FC) seats together with the bi-camel system of voting can then be retained to ensure a level of professional expertise of the Council. I still believe that it is a good proposal worthy of consideration.

An alternative proposal which is a little bit more aggressive is to turn the existing 30 functional constituencies into Professional ¡¥Election Committees¡¦. The concept is then to allow the FC to elect no more than three candidates amongst its peers; each must secure the support of no less than say, 25% of the vote cast of the FC before these candidates can hold themselves out for a direct election by all the registered voters of Hong Kong.  This system will ensure that FC members, particularly those serving Legislative Councilors, must be acceptable not only to his own FC, but also to the whole of the People of Hong Kong.  

The election of the Chief Executive can also be modified in a similar manner that the candidates must first obtained no less than 25% of the votes of the Election Committee before moving forward to direct election. He must then obtain a majority vote in general election following a process of elimination if necessary. In theory, therefore, a popular candidate with the support of just over 200 Election Committee members and more than half the general voters¡¦ support can become our Chief Executive in 2007. Conversely, a very unpopular Chief Executive with a majority support of the Election Committee can still fail in his bid for the top post if a challenger can successfully past the modified ¡¥nomination process¡¦ of the Election Committee. The design of this system will make the balance of the wishes of the People of Hong Kong and the influence of Beijing much more transparent and rational.  I believe that discussion of this nature will help the Government and the legislators to gauge the true wishes of the electors and in the process, help to alleviate some of the anger and frustration of the now estranged public.

B) Fiscal and Economic Policy:

The departure of Mr. Anthony Leung creates a perfectly good time for the Government to abandon its unrealistic target to balance the Budget in 2006-2007. There are good reasons for doing so too since that the speed of the economic revival and the anticipated recovery of property prices simply had not materialized. Instead, the ill fated SARS must have dealt another blow to throw a lot of economic predictions off the charts. Furthermore, it can be argued that the present fiscal policies can be regarded as particularly harsh to the middle income group who had already suffered the most from assets devaluations, job insecurity and increasing tax burdens. They must now feel unfairly treated, anxious and angry.   

The Government Budget is also in a state of insolvency that requires a Scheme of Financial Arrangement in a Corporate Rescue mode. We need new injection of transient capital and a new management philosophy at least in the short transitional term. The dual objective of boosting economic growth and balancing the budget all within a short time-frame of three and half year is both foolhardy and confusing. We must make it clear to the People to Hong Kong that the balancing of budget can wait perhaps two or three years more. The priority now is on economic recovery and that the timing is right with the help of CEPA and a recovering US economy. In the meantime, we should appeal to the People of Hong Kong for national debts with a realistic floating rate of interest instead of raising more and more taxes from the same group of hard pressed middle class at the worse possible moment. I am sure that with the community spirit of solidarity still lingering on from SARS and that with a banking system still flushed with undeploy funds, I am certain that the People of Hong Kong will be glad to voluntarily oblige. 

¡¥New team, new thoughts¡¦, may the thoughts of the new Financial Secretary and others to take on the challenge of Government be truly with the People they serve.


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