FOR what they are worth, fact files distributed by the Government and other public organisations to overseas visitors always contain superlatives. Much is made of the fact that Hong Kong ranks highly in a number of global comparative studies. Since 1995, Hong Kong has been ranked the world's freest economy by the Heritage Foundation in the United States. For several years, the World Competitiveness Report published by the International Institute for Management Development has put Hong Kong third on its scoreboard, while the World Economic Forum has ranked it the second most competitive economy. Although the latest rankings were released early this year, they largely reflected Hong Kong's situation in 1997 because of a time lag. For the first half of last year, Hong Kong was still under British rule, and the British legacy remained very much intact during the second half although it had become a part of China. With 1999 just four months away, Hong Kong looks unlikely to be able to retain its admirable rankings when the scoreboards are released next year. However much we detest them, headlines such as 'Hong Kong's global ranking falls under Chinese rule' are likely to 'grace' the newspapers. Hong Kong's scores are likely to fall, but not necessarily because the stock and property market bubbles have burst, making companies and individuals poorer, for even the world's most competitive economies can have recessions. Hong Kong's standing will fall because of a number of decisions by the authorities which have undermined the pillars of its past success. Lack of government intervention in the market is a key component of all the ranking studies. Regrettably, Hong Kong has experienced an increasing level of such intervention over the past year. It started with Chief Executive Tung Chee-hwa's pledge last year to produce 85,000 home units a year, which smacked of turning Hong Kong into a planned economy. Although the target has since been practically dropped following a property market crash, the decision to suspend land sales is another act of intervention. Nevertheless, since the Government is Hong Kong's largest landowner and has always played a decisive role in the market by varying the land supply, the suspension in times of falling values may be appreciated. But the Government's direct participation in the stock and futures market since last week is clearly an unacceptable act of blatant intervention. Notwithstanding its good intention to defend the currency's fixed exchange rate with the US dollar, the intervention clearly runs contrary to what Hong Kong has long professed itself to be - a free market. A market cannot be considered free when a dominant player is the government, whose motive is not to make a profit, but, in Hong Kong's case, to squeeze what it deems to be undesirable speculators. From now on, the subjective motives of officials, apart from fundamental analyses of company performance and economic trends, will have to be a consideration of investors. Another factor which may contribute to Hong Kong's fall on the international scoreboards concerns the legal environment. While the common law judicial system remains intact, the public cannot be blamed for feeling some people may be above the law because of several developments. They include the granting of legal immunity to state bodies under the Adaptation of Law (Interpretative Provisions) Ordinance and the Secretary for Justice's decision not to prosecute newspaper publisher Sally Aw even though she was named in a fraud case for allegedly conspiring with three senior executives of the Hong Kong Standard to falsify its circulation figures. THE Aw case highlighted a fundamental weakness in vesting the Secretary for Justice with the dual roles of being the Government's legal adviser and the SAR's prosecution authority. Compounding the problem is the fact that the Secretary for Justice is appointed by the Chief Executive, who happens to have had close business ties with Miss Aw - even though their consciences may be clear. Another worry is a deterioration in the quality of government, which has begun to affect the overall quality of life. The catalogue of blunders since the formation of the SAR is long, ranging from the bird flu and red tides to the dispensation of the wrong drugs at public clinics and the transfusion of wrong blood at public hospitals. Last week it transpired that fatal mistakes also occurred in plush private hospitals charging exorbitant fees. While crime rates remain low, tycoons who were victims of ransom demands have not dared to report their ordeals, even after the arrest of the culprits by the mainland police. Lately, free speech also seems to be under threat by the forces of the underworld after popular and outspoken radio talk show host Albert Cheng King-hon was brutally injured in a knife attack. Hong Kong remains a safe and relatively affluent city. Despite rising unemployment most households still live a decent life, although their flats are worth much less than a year ago and their bank balances are falling. However, when even locals feel their lots have got worse, foreigners who are given a glimpse of Hong Kong by the media only when things go wrong cannot help but form the impression that the SAR has gone downhill since its return to China. It would be unfair to hold the SAR Government, let alone Beijing, responsible for everything that has gone wrong. The Asian financial crisis is beyond the control of Hong Kong. Domestically, one might argue that many mishaps were caused by neglect during the last years of colonial rule, when the energies of senior officials were consumed by a fruitless struggle over the political system. But whatever the causes of our current plight, the SAR Government needs to do the right thing to maintain Hong Kong's rankings if it still wants to use those glamorous superlatives in its propaganda.