Hong Kong is being choked by its government bureaucracy
A few months ago we wrote about the extraordinary amount of time it took restaurants to get permission for outside seating accommodation, otherwise known as OSA.
We had noted that it was taking at least seven months for restaurants at the China Resources Building to extract this permission from our ever-vigilant civil service. But little did we know that this process was already a ferment of bureaucratic activity.
It transpires that in December 2012 the French Chamber of Commerce and the American Chamber of Commerce met the convenor of the Food Business and Related Services Task Force (FRSTF), under the Business Facilitation Advisory Committee, to discuss concerns over the time it was taking to process OSA applications.
According to the FRSTF report on this matter (http://bit.ly/1mHm3bw), the chambers urged the government to streamline the procedure. The application process is run by the Food and Environmental Hygiene Department (FEHD).
It turns out that outside seating is a highly complex matter and applications involve a host of issues such as the right of land use, impact on nearby residents and traffic requirements.
It is therefore necessary for FEHD to make referrals to six departments - Lands, Buildings (or Housing or Architectural Services), Fire Services, Planning, Transport and Home Affairs.
The report says it takes a mere 53 working days for processing "simple straight forward cases". The average period in 2012 was 10 months, while others have taken more than two years.
The report notes that the process involves nine government departments, though most of them had little interest in OSA. The paper drily observes, "The trade suggests shortening and simplifying the overall process."
The upshot of the working group's investigation was a list of recommendations, the advantage of which was not immediately obvious to the uninitiated like us.
We now understand why applying for licences and permits from the government for matters such as OSA has spawned a specialised industry of agents to act on behalf of restaurants, and thereby increase their cost of doing business.
Our article a few months ago had lamented that it took one restaurant seven months to secure its OSA permission. In fact, we should have been over the moon since it was three months faster than average.
When one considers the amount of time it takes the civil service to allow a restaurant to have a few extra chairs and tables outside a restaurant, one begins to get a sense of the bureaucratic malaise that is enmeshing Hong Kong. Small wonder it cannot organise itself to get a halfway decent harbour front, or why there is a shortage of moorings for boats while there are literally acres of space in typhoon shelters that are standing empty.
While our political leaders are champing at the bit trying to get things done, our civil servants, those that attempt to execute policy, are stuck in a bureaucratic quagmire.
Hong Kong is choking on its own bureaucracy. This is a serious problem, but as everyone knows reforming the civil service is one of the hardest things to do. There are too many vested interests at stake. Small wonder then that the chairman at yesterday's meeting drew attention to a letter of appreciation from the French Chamber of Commerce and Industry for the joint efforts of the nine departments in completing its review. Whether the restaurant business will feel significant change has been achieved is highly questionable.
High frequency rip-off
Michael Lewis has a new book out. Flash Boys is about high frequency traders and how they make their money. Investment in rapid transmission systems enables them to see retail orders coming and then race to the exchanges, buy the stock and sell it to you at a higher price. A small profit on millions of trades a day is netting them billions, he argues. Lewis adds one hedge fund manager said, "I was running a hedge fund that was US$9 billion and that we figured that just our inability to make the trades the market said we should be able to make was costing us US$300 million a year." That was US$300 million a year in someone else's pocket.