Trust a bureaucrat to try to fix a system that isn't even broken

IN A DISPLAY of displaced generosity, the Hong Kong government is about to grant the emerging economies of South and Southeast Asia a packet-busting lai see - all in the name of racial harmony.

At a seminar on ethnic minorities on Tuesday, Deputy Secretary for Home Affairs Stephen Fisher hinted that under proposed anti-racism legislation, it would be illegal for private firms to discriminate against staff on grounds of race, colour, descent, nationality or ethnicity.

All laudable and noble, until Mr Fisher said Hong Kong-based firms hoping to recruit overseas staff with an offering of generous 'expat packages' must justify such pay and benefits and prove they had searched in vain locally for potential candidates. On top of that, these companies must not offer such 'expat packages' to Hong Kong permanent residents.

These provisions are still being drafted, so they can be amended or emended. And emended they must be, for they can have a far-reaching deleterious impact on some of Hong Kong's traditional and emerging economic pillars - financial and legal services, international trading and logistics, professional and academic training, as well as the technical and creative sectors - all in need of foreign expertise and workers with global experience.

By inadvertently setting up new bureaucratic barricades and financial disincentives to hiring expatriate talent, the government may actually end up hastening the growth of outsourcing industries in India, Indonesia, the Philippines, Thailand and Vietnam. Worse, it risks triggering a local brain drain to the gain of Singapore and Malaysia's financial services and South Korea and Taiwan's technical industries.

True, Singapore and Malaysia have tried to protect their locals from the onslaught of foreign labour through work permits and other schemes but have not dared restrict the entry of highly skilled expatriates.