Hong Kong, the post-colonial poster child?

PUBLISHED : Thursday, 27 August, 2009, 12:00am
UPDATED : Thursday, 27 August, 2009, 12:00am

Hong Kong is one of the few decolonised places in the world where talk of Western imperialism does not automatically inflame the kind of passions it does in many developing countries. One reason is that the British undoubtedly left us - and it may be politically inconvenient to say so - better off than we would have been, left to our own devices.

It is, therefore, not surprising that we are often being held up as an example of imperialism's human face. At a recent lecture, Paul Romer, the Stanford University economist, praised the colonial legacy of Hong Kong as a model for other developing countries. What it achieved under British tutelage, he says, eventually helped lay the foundations for China's modernisation and turbocharged growth.

'Britain inadvertently, through its actions in Hong Kong, did more to reduce world poverty than all the aid programmes we have seen throughout the world,' he said at a recent videoed TED Global forum.

What he advocates for development economics is a kind of colonialism, sans the nasty bits. A developing economy needs what he calls 'good rules' to succeed, such as the rule of law, an independent judiciary, a free-market system and a relatively efficient and corruption-free government. We got all these 'good' rules from the British.

Professor Romer argues that developing nations should set up 'charter cities' - special administrative zones - like Hong Kong and have them run by a developed country, or in partnership with one or more developed countries. In this way, they can quickly acquire good rules and bypass bad ones.

I don't know what to make of Professor Romer's 20-minute lecture. He has done tremendous work in endogenous growth and technological change and is clearly not a crackpot. But his radical idea raises more puzzling questions than answers.

Why does a 'charter city' have to be administrated by a foreign, developed economy? Was Hong Kong's legacy of prosperity and stability an exception, rather than the rule, in British colonial history? In what way can the city be held up as a model for others? Could there be other factors in our success - say, Chinese entrepreneurship?

What is troubling about 'charter cities' is the recurrent idea that developing countries must take lessons from the developed West. Certainly, Professor Romer sounds critical of Western aid programmes, which have either failed or achieved below-trend results. That is why he is turning to the rather old idea of benign colonialism. Historians have long pondered the beneficial effects of colonialism, and the professor is dressing that up in the language of econometrics.

But hasn't the most spectacular growth in recent decades been achieved by developing countries that walked their own paths, often to the ridicule and discouragement of Western nations? Even the British colonials here were as different as night and day from the mandarins of Whitehall.

Hong Kong may have made Western imperialism look good. But it is just one of 13 economies that have, since 1950, managed to grow at an average of 7 per cent a year or more for 25 years or longer, according to the Growth Report published by the Commission on Growth and Development. The others are: Botswana, Brazil, China, Indonesia, Japan, South Korea, Malaysia, Malta, Oman, Singapore, Taiwan and Thailand.

So why single out Hong Kong instead of collectively studying all 13 high-growth economies and determining what they have, if anything, in common? This is what the Growth Report sensibly tried to do, representing, to date, the first concerted official effort by several Western governments and the World Bank to distil the 13 economies' experiences and learn from them.

Economic history of the last half century has rather discredited Western tutelage as the precondition for development. In matters of development and growth, we will do well to look to the East, rather than the West.

Alex Lo is a senior writer at the Post