Bucking the consensus that this city is among the freest and most competitive economies in the world, the World Economic Forum (WEF) announced last week that Hong Kong's place on its global competitiveness index has fallen to 28, from 21 last year. Considering that Hong Kong came second in the prestigious ranking in 1997, the fall can only be described as alarming.
The government's immediate response was to cast doubts on the WEF's conclusion by pointing to Hong Kong's high rankings on various competitiveness indices compiled by groups such as the Heritage Foundation, Cato/Fraser Institute, Institute for Management Development and the Economist Intelligence Unit. Secretary for Justice Elsie Leung Oi-sie publicly rebutted the WEF's comments about perceived weakening of Hong Kong's judicial independence, while Independent Commission Against Corruption chief Raymond Wong Hung-chiu rejected the claim that corruption had worsened.
Chief Executive Donald Tsang Yam-kuen said he could see no statistics to back up the WEF's view that Hong Kong's competitiveness had fallen, reiterating the government's firm commitment to the rule of law and a level playing field. In an obvious bid to counter the negative publicity generated by the WEF report, the government even held a press conference on Friday to publicise the fact that Hong Kong remained the second-most preferred destination for foreign direct investment in Asia last year.
While we agree there is no hard evidence to prove that Hong Kong courts have become less independent and favouritism and corruption have worsened, at the end of the day, it is perception that matters. The findings of the WEF's Executive Opinion Survey play a vital role in determining the rankings.
Although our courts have shown through their rulings that they have continued to adjudicate disputes without fear or favour, informed observers cannot but be concerned by Beijing's moves to reverse or pre-empt our courts' rulings on the Basic Law's provisions on right of abode and our political system, and the implications of such actions for judicial independence.
Looking back at the controversies over the government's handling of the Cyberport and West Kowloon Cultural District projects, we cannot blame people for feeling that the playing field here might not be entirely level. Cyberport is already history, but the government has let it be known that it will abandon the single-developer approach in undertaking the cultural project to address community concerns over favouritism. Whether this would prompt the WEF to give Hong Kong a higher ranking next year is something to watch out for.
The WEF ranking might have been harsher than what we deserve, but let us not forget that a World Bank study released two weeks ago also said Hong Kong had fallen from fourth to seventh place on its scale for ease of doing business.
Rather than dismissing the WEF report, we should treat it as a wake-up call that we cannot sit on our laurels. In particular, it is worth noting that while Hong Kong's latest plunge in the ranking was caused by a perceived deterioration in policy stability and bureaucratic efficiency, the city's continuous decline in competitiveness was largely attributed to its inadequately educated workforce.
The president of the People's Bank of China, Zhou Xiaochuan , warned in an address to Hong Kong's banking community last week that the city risked losing its status as an international financial centre if it failed to change with the times. His advice that Hong Kong must continue to enhance its competitive advantages in the wake of growing competition from other financial centres in the region is one that also applies to other areas.
After all, while it has taken us years to climb up the ladder of success, it would only take a few ill-conceived decisions for us to tumble down.