Beware the planner
Those who recall the economic debility of the old Soviet Union and its satellites, or the failed flirtations of other countries with socialist economics in the last century, may share my deep suspicion of the word 'planning'. I remember, back in February 2000, feeling distinctly uneasy when Tung Chee-hwa wrote about 'planning Hong Kong's future', as he introduced a report on 'long-term development goals', produced by the Commission on Strategic Development - a typical assemblage of senior officials and the great and mighty from the business world. Subsequently, I have been relieved not to hear so much as a squeak from the commission. But last week Donald Tsang Yam-kuen announced his intention to resurrect it, and to cast it as the city's 'most important advisory body'. Oh dear.
The 2000 report was full of predictable rhetoric about 'holistic long-term strategy', 'knowledge-based economy', 'embracing new technologies', 'enhancing the quality of the environment', 'strengthening the social fabric' and so forth. It identified four themes as especially important - mainland opportunities, competitiveness, quality of life, and image projection to the outside world - uncontentious, and perhaps no more profound than might be expected of a student essay. Then, in listing key sectors for development, it included financial and business services; tourism; trade and logistics; information technology and telecommunications; science, innovation and technology.
Move ahead to this year and look at both the policy address and budget speech. You will again find a spotlight on financial and business services, tourism, trade and logistics. But they are silent on IT, telecoms and science. And the only references to technology are to its application, not its development. Experience with these subjects has been so chastening as to drive them off the radar screen.
What does this tell us? First, given that Hong Kong is still essentially a free-market economy, it shows that a top-level committee, even when its findings are enthusiastically endorsed by the government, can neither accurately predict nor ordain the future mix of economic activity. Second, it confirms that the economy maps its own path and performs well enough, despite - as much as because of - any efforts from on high to micro-direct it.
While the economy as a whole may look after itself, the poor in society struggle to do so. The 2000 report noted the social strains caused by income disparities. These have since widened. But after five years sitting on its hands, the government has only just established a poverty commission to address the issue.
There is, of course, a necessary place for government in social policy, as in education and health. And on the economic front there is a clear role for it in developing infrastructure, creating a business-friendly environment, and ensuring fair play within Hong Kong, and fair access to markets elsewhere. But we do not need a superstar commission to tell us any of that, or to deliver it. And we certainly do not need a commission to try to guess, or dictate, how the composition of economic activity will unfold. Such attempts will result in further embarrassing vacuums, or in public money being wasted to secure the prescribed outcome.
Ever since the Asian financial crisis, the government has, on various pretexts, solemnly recited a canard about the allegedly unprecedented challenge of structural adjustment. It has used this to justify a growing penchant for planning, such as with the strategy commission's exercise. In fact, however, structural adjustment is nothing new; it has been an integral part of Hong Kong's history. What the government does not seem to realise is that, while it frets about the challenge, business is already performing the adjustment under its very nose - vindicating 'small government', not clamouring for a plan. The commission ought to be left to its slumber.
Tony Latter is a visiting professor at the University of Hong Kong
