Opinion | Hong Kong's timid leaders lack vision

When will Hong Kong's government and civil service leaders grow up? It seems they are incapable even of thinking beyond the baby steps they propose to meet Hong Kong's most obvious problems. They have a lot to learn from Beijing on the eve of the Communist Party plenum, where high-level advisory bodies and think tanks have been proposing bold ways for China to move ahead.

They include such items as freeing up interest rates, a road map to full currency convertibility, abolition of the hukou system, ending of preferences for state enterprises, and creating a market in land-use rights.

Of course we know that a lot of this will not happen. Interest groups within the closed political system will likely frustrate reform. But at least China has people near the top with vision. Where are their equivalents in Hong Kong? For sure, Hong Kong's political system can be an obstacle to change, but ultimately its more open system should be better capable of bringing about change for the common good than a one-party state. But timid men in well-paid, secure jobs are failing the community.

Take the issue of the ageing population. There is a suggestion of setting aside HK$60 billion for a fund to support the ageing poor. This is a derisory sum; it compares with the HK$24 billion which sits in the Civil Service Pension Reserve Fund for that spoiled class in the unlikely event that the government itself could not pay their pensions out of recurrent revenue.

What current and future pensioners - those reaching 65 to 70 over the next 15 to 20 years - deserve is a share of the vast surpluses built up by their toil over the previous four decades. These are currently HK$1.3 trillion - some HK$674 billion in fiscal reserves plus the HK$637 billion accumulated surplus of the Hong Kong Monetary Authority.

It is often forgotten that much of the surplus has arisen as a direct result of devaluation of the Hong Kong dollar, whether in the period immediately before the peg or as a result of subsequent US dollar weakness, against some currencies in which assets are held. The Exchange Fund has benefited at the expense of savings eroded by inflation.

Lower income groups mostly save through bank accounts. But decades of mostly negative real interest rates have eroded their savings to the advantage of the banks, the developers and those already sufficiently well-off to be able to borrow and enjoy many years when assets prices have outstripped rises in earnings. While the small savers earned nothing, the HKMA was able to reap the higher returns available in bond markets. It is of course entirely coincidental that the non-official members of the fund's advisory board are bankers and property developers.