Donald Tsang

A feeding frenzy at the political trough

PUBLISHED : Thursday, 10 January, 2008, 12:00am
UPDATED : Thursday, 10 January, 2008, 12:00am

There seems to be no limit to the self-aggrandising, and enrichment, of senior bureaucrats in Hong Kong. That is ever more alarming as increasing numbers morph into so-called politicians and because the huge budget surplus may open up new avenues for them to expand their power beyond the proper role of government.

The case of Fanny Law Fan Chiu-fun is just the tip of an iceberg. Here is a senior bureaucrat whose abysmal behaviour in her previous role as permanent secretary in the education and manpower bureau led to her departure from the Independent Commission Against Corruption. Yet, she is now being rewarded for her failings; civil service rules have been abruptly changed, opening the way for her to become a candidate for the National People's Congress.

There should be nothing in principle to prevent former civil servants who have genuinely left the government from taking on political roles. But there must be real concern to ensure that Mrs Law, or others who supposedly quit the civil service, do not return quickly to government-appointed positions in quasi non-governmental organisations (quangos).

These proliferating bodies enable administrative officers to move from their already overly comfortable packages in the bureaucracy to feed at Donald Tsang Yam-kuen's political trough and to make money on a scale to rival the sons of tycoons.

For example, at the very heart of Hong Kong's global financial role sits Hong Kong Exchanges and Clearing, a government controlled monopoly that has singularly failed to develop major new products and owes its recent success - and mega share and options profits for its government-appointee managers - almost entirely to mainland listings. Hopes that it might be genuinely privatised died after the recent announcement that the Monetary Authority had been using public funds to extend the government's grip by buying a large stake - thus making doubly sure that future top positions can go to former bureaucrats or those favoured for their political reliability.

Meanwhile, another quango that should never have been set up in the first place is so determined to provide yet more opportunities for bureaucrats that it is expanding overseas - to Malaysia - because its local role, never large, has been shrinking. I refer to a subsidiary of the HKMA, the Hong Kong Mortgage Corporation.

As recently noted by columnist Tom Holland, the lack of local business first pushed it to offer ridiculously generous mortgage guarantee terms that set borrowers up for excessive debt while (as usual) benefiting developers. The loans carry implicit subsidies that make a nonsense of government claims that it does not interfere with the market mechanisms the HKMA is supposed to foster. Despite calls to sell it, the Mortgage Corporation keeps seeking ways to put more public money at risk.

Now the government is thinking of pumping yet more public money into its failed massive investment in Disneyland and related infrastructure. It should follow that other government-financed tourist failure, London's Millennium Dome, and be sold to the private sector.

But no. What we are likely to see in the budget - in addition to tax cuts for those who least need them - are billions more for infrastructure projects to suit Mr Tsang's desire to build monuments to himself.

Some of these will be dressed up as private projects, but new quangos will doubtless emerge and, with them, more opportunities for elite ex-bureaucrats to enrich themselves.

Meanwhile, the real purposes of government - education, public health, law and order, and social welfare - will continue to be starved of funds. Mr Tsang and his officials will continue to preach 'small government' while expanding their quango universe of mega salaries and options schemes.

What Hong Kong really needs to find is an equitable way of reducing quango power by distributing excess savings to the community.

Philip Bowring is a Hong Kong-based journalist and commentator