Jake's View

Hong Kong doesn't need Morlocks from the Delta to fix labour woes

Singapore put some of its eggs in a bottomless basket; HK should not seek to follow suit

PUBLISHED : Monday, 24 February, 2014, 3:51pm
UPDATED : Tuesday, 25 February, 2014, 5:16am

Importing labour is a very outdated concept, especially for Hong Kong. It should look at it as talent flow across the Pearl River Delta region.

Paul Cheung,
Singapore director of population planning, 1986-96
SCMP, February 24

I have another way of looking at it. The English author H.G. Wells, in his science fiction classic, The Time Machine, postulated a race far in the future of subhumans, the Morlocks, who lived underground in the dark to serve their master race, the Eloi.

Except, of course, that they also ate the Eloi.

We haven't got quite that far yet in relations between the working and worked-for classes in our society, but I think Wells would have understood quite well where that term "talent flow" leads.

Mr Cheung apparently does not like the way that low unemployment is pushing up wages for menial labourers, and his solution for the so-called labour gap (the accepted euphemism) is a common one - bring in lots of migrant labour.

But he at least recognises one significant difficulty here. We simply don't have the housing to accommodate them.

He therefore proposes that we wash our hands of this problem by telling them to find housing across the border and commute to work every day.

It's the Singapore solution. Just close your eyes to their squalid living conditions. It has nothing to do with you if they do not live on your territory - am I my brother's keeper?

Then shuffle them in and out at a reported 150,000 a day (the actual statistic is not published). Hello, Morlocks. Watch out, Eloi.

But Singapore's circumstances are different from Hong Kong's. The Singapore government made a decision years ago to maintain a sizeable proportion of the economy in manufacturing. It was worried that an economy based on services alone would constitute putting all its eggs in one basket.

In constant price terms, manufacturing continues to account for 25 per cent of Singapore's gross domestic product. In Hong Kong, where this question has been left to natural market forces, the ratio has declined to 2 per cent.

Singapore finds it increasingly hard to justify this manufacturing drive. It doesn't fit well with a small, wealthy city that has only a tiny domestic market and a population that does not like to dirty its hands.

In practice, what has happened is that virtually all the manufacturing investment has come from abroad, seeking to take advantage of easy taxes, laid-on facilities, an excellent laid-on port and lots of foreign labour that makes no trouble or will get much more of the same than it ever makes.

I once asked a Singapore bureaucrat the reason for having these imported manufacturing workers, and she replied that it justified employment for Singapore-trained engineers. Talk of putting the cart before the horse. It's a back-to-front world down there, sometimes.

And it is not doing the people of Singapore much good. The hi-tech is all foreign-owned and foreign-patented. What Singapore gets is white-gowned technicians pushing buttons, which is distinctly lo-tech. Domestic efforts to go hi-tech have mostly been disappointing.

The money also does not stay. The income balance on the current account is negative to the tune of 5 per cent of GDP (in Hong Kong, it's 1.2 per cent of GDP positive) as the foreign investors pay themselves out. Thank you, Singapore, they say.

No, Singapore has not put all its eggs in one basket. It has just put some of them in a bottomless basket. Let's be grateful that we never worked ourselves into this fix. We don't need our labour in the form of Morlocks.