A black hole

PUBLISHED : Monday, 03 November, 2008, 12:00am
UPDATED : Monday, 03 November, 2008, 12:00am


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First question. Does anyone remember the Council of International Advisers? It was a group of foreign big-shots, established by Tung Chee-hwa 10 years ago to 'advise the chief executive on strategic issues pertinent to the long-term development of Hong Kong from an international perspective'. It met annually during Mr Tung's reign. The 'advice' which this costly forum delivered was never more than to endorse generalities and opine that our government had got things just about right. When he took over as chief executive, Donald Tsang Yam-kuen wisely declined to proceed with the next scheduled meeting. Since then, the council has disappeared off the radar altogether.

Second question. Does anyone remember the Commission on Strategic Development? You should, because it still exists, and it will be meeting on Thursday. It, too, was originally set up by Mr Tung in 1998, to explore long-term development strategies for Hong Kong. It soon lapsed into obscurity, but was revived by Mr Tsang in his first policy address, in October 2005. He announced that he looked upon the commission as Hong Kong's 'most important advisory body'. Membership was expanded to about 70. It also has four committees and four taskforces, each comprising some 40 people.

The forthcoming meeting will discuss a paper titled 'An overview of the opportunities and challenges of Hong Kong's development'. The paper suggests that Hong Kong is likely to experience a significant economic slowdown in the coming year and that, to face that challenge, 'Hong Kong should reinforce its role as a global financial centre and identify new opportunities for its economic development ... strengthen co-operation with the Pearl River Delta region, other parts of the mainland, Taiwan as well as Asian countries ...[and] consider ... the role it should play in the National 12th Five-Year Plan'. Members are being asked to come up with ideas on those points, as well as on issues relating to poverty, quality of life, governance, and so on. These should be formulated to help 'take Hong Kong up to the next level' - whatever that means.

It all looks like a load of mumbo-jumbo. There is little evidence of the commission having contributed substantively to policy in the three years since its relaunch, and it would be a miracle if this meeting produced anything more than generalised exhortations and statements of the obvious.

Third question. Have you heard of the Task Force on Economic Challenges? Surely yes, since its creation has just hit the headlines. Its first meeting is set for today.

Undaunted, it seems, by the failure of his predecessor's Council of International Advisers, or by the evident ineptitude of his own juggernaut Commission on Strategic Development, Mr Tsang is assembling another panel of the great and good (and some not-so-great) to advise on how to cope with what he refers to as 'the global financial tsunami'.

He hopes that they will help 'to evaluate the situation, consider ways to respond, identify new opportunities, and ultimately enhance our international competitiveness'.

Some may think it a sad reflection on our leaders and administrators that they feel the need to summon help in this way. It is, however, extremely unlikely that this new body will come up with anything more than statements of the obvious. We can expect a communique along the following lines:

'We had a fruitful exchange of views. It was acknowledged that Hong Kong, as a relatively small economy, has limited scope for averting the impact of global events. Much will depend on the efforts of governments in the major economies, including mainland China, to sustain demand and activity. There would be no advantage in tinkering with the pegged exchange rate, especially since monetary loosening in the United States is appropriate for Hong Kong, too. Hong Kong could, however, contemplate expansionary budgetary measures, at least on a temporary basis, to counteract any recessionary tendencies. Such measures could usefully be targeted to support businesses through the impending downturn and to secure the livelihoods of the poorer sections of society.

'It was noted that Hong Kong's firm supervisory regime has helped its banks to avoid the worst of the storm, but that there is no room for complacency. The financial authorities in Hong Kong will be closely involved in international discussions aimed at improving supervision globally, so as to avoid a repeat of such turmoil.'

I would love them to prove me wrong with some inspiring new insights. But I doubt they will.

Tony Latter is a senior research fellow of the HK Institute of Economics and Business Strategy. tlatter@hku.hk