AND THE LEE Kuan Yew Honorary Award for self-proclamation of instant expertise in everyone else's business goes this month to Harvard Business School professor Jeffrey Sachs. What fun to go swanning around the world telling others how to manage their affairs and run safely elsewhere when it all goes wrong, what joy of intellect to know that you comprehend all the world's problems and can offer the solutions in detail too. Bow down, minions, at the temple of this new god. Let us look a little closer at Mr Sachs' embellishments of the World Economic Forum's announcement that Hong Kong has slipped to 13th place from seventh in its macro-economic competitiveness index. This one, by the way, scorns objective criteria. It is based on the opinions of 4,500 'chief executives' who all, of course, share Mr Sachs' detailed knowledge of every country. Here we go anyway - Being a finance and trading entrepot is necessary but not sufficient to ensure competitiveness. Why should it be a necessary condition? A country can be very competitive and not be a finance and trading centre at all. We know of one right across our border. China has probably the world's most competitive industrial economy at the moment and it is growing gangbusters too. Yet in finance it still has a closed capital account and trade for China means little more than shipping the goods to the dock. And why should finance and trading not be sufficient to ensure competitiveness? It has always been so for us, just as it has been for New York. We serve roughly the same function to our hinterland as New York does. The fact that we operate under different political conditions from New York does not change our economic function. Mr Sachs is talking nonsense here. . . . Low levels of innovation in Hong Kong, shown by the small number of registered patents . . . What a narrow view of innovation to think that it consists only of filing me-first claims in gadget design. Hong Kong's traditional strength lies rather in matchless skills at spotting commercial opportunities and then building on them with great efficiency. The parallel here is with Microsoft Corp. Find a great idea from someone else, make it yours and then clobber the competition out of the way with production efficiency and top-flight marketing. Microsoft is a United States innovation success story but thousands of people in Hong Kong do it just as well on a smaller scale. It requires open, alert and nimble minds and if this were properly recognised for the innovation it represents we would be a wonder-story of Nobel Prize winners. Singapore by contrast has gone further to invest in industries such as biotechnology. Biotechnology? Heaven help us. Look at what a mess Singapore has already worked itself into by wasting public money on computer high technology. If it now decides to play double-or-nothing by doing it again in such a poor margin industry as biotech we will certainly have to pull the chain on the place in a year or two. Hong Kong's fixed currency peg . . . was imposed at very high costs, hitting competitiveness. What hit on competitiveness? While the rest of Asia's exports are crashing our service-based economy is still going from strength to strength, buoyed by still rising merchandise exports from China, another fixed-currency economy. Our financial system is the strongest in Asia and our stock market the only one to have risen above its level of September 11. Where are your facts and figures, Mr Sachs? If you will not show them then in two short words, one of four letters and one of three, spare us.
