Financial Secretary John Tsang’s public approval rating declines by 15 percentage points, according to a Hong Kong University poll. Asked to imagine they had the power to fire or reappoint the hirsute bureaucrat, the number voting to keep him fell from 53.3% a year ago to only 35.9%. The number of brutes willing to throw him out on the street rose from just 7.7% to 22.5%. (A steady 40% apparently found the responsibility for making such a decision, even hypothetically, too awesome and preferred to abstain.)
The fact that one in three residents of the Big Lychee walking around this morning positively prefers to see Tsang remain in office is a testament either to their generosity of spirit or their mental frailty. But it also reflects a populace accustomed to the city’s strange combination of high-quality day-to-day administration – the sewerage, police, buses and street lighting all function impeccably – and crap governance.
Which leads us to ask: why do these highly trained civil servants become such wretchedly bad policymakers, and why does Beijing choose them, rather than people with a clue, to run this city?
A simple example of dim-witted policymaking must be the unpopular decision to put HK$6,000 into people’s Mandatory Provident Fund accounts rather than distribute the HK$24 billion as a cash handout. Tsang’s argument was that letting people spend it now would be inflationary. The main cause of inflation in Hong Kong must be the artificially low interest rates we have to live with thanks to the currency peg. If any government spending has a significant impact it would be the expenditure on largely pointless infrastructure mega-projects of some HK$60 billion a year, which has already caused a shortage of construction workers and no doubt enables local suppliers of cement and steel to ramp up their prices. Meanwhile, what is the purpose of the HK$20 billion Tsang will spend on rebates and subsidies for electricity, rates, public housing rents and welfare? Ah yes, to “combat inflation.”
The simple explanation is that the generation of bureaucrats now running Hong Kong are at heart colonial officials. They were mentored back in the 1970s and 80s by British superiors who indoctrinated them in a philosophy with its origins in the 19th Century. According to this mindset, the Hong Kong government does not exist to serve the population but the economy. Indeed, it is important not to make life too pleasant for the people, to avoid encouraging more of them to come and live here or hang around for too long before going back to wherever they came from.
Although this way of thinking has been watered down over the years, it is still fundamental to bureaucratic logic. Hence the shortage of parks, leisure space and residential space: such things are economically non-productive and therefore a ‘waste’. Making life better for people is seen as an evil. So civil servants let the billions pile up in the reserves while viewing affordable and overdue boosts to health, environmental and welfare spending with little short of horror.
(An alternative explanation for the incessant accumulation of excessive reserves – Tsang foresees an extra HK$100 billion by 2016 – verges on conspiracy theory, and that is that Beijing has directed the local administration to do it on some sort of Communist, paranoiac, national-security grounds. Such are the difficulties of rationalizing the extreme idiocy of Hong Kong’s officials.)
Why does the Chinese government, which picks Hong Kong’s Chief Executive and has a veto over his choice of ministers, insist on putting such inadequates in charge? For an answer we need look no further than Macau, where an annual handout of cash to all residents is now a well-established practice and widely interpreted as conscience-money. The leaders in Beijing have appointed figures widely known to be corrupt to run the former Portuguese colony because they can trust them. Letting the local rulers stuff their own pockets with kickbacks from construction companies is a small price to pay, and no doubt consolidates their loyalty towards their imperial masters.
Hong Kong won’t put up with anything so crude. (That said, the dynamics of the domestic economy stink. Productive sectors are forced to buy overpriced essential inputs from a few family-run cartels, which also benefit, if discreetly, from aforementioned wasteful public works contracts.) The Communist Party’s priority is to keep itself in power; for that reason it must have control over everything, and that means Hong Kong must be stable – stagnating is acceptable – and run by dependable and obedient underlings. This means robots with no imagination or ideas? But of course.