Economic woes will only deepen if govt refuses to accept reality

HKEJ Editorial December 04, 2019 17:51

On Monday, at a meeting of the Legislative Council’s Panel on Financial Affairs, Financial Secretary Paul Chan Mo-po had some bad news for us, as he warned that the government could post a budget deficit in the current fiscal -- the first such shortfall in 15 years.

A challenging external environment and the unprecedented social unrest here, which led to weaker land sales and tax revenues and increased public expenditures on relief and welfare measures, were cited as the factors that would lead to the budget books going off the mark.

Chief Executive Carrie Lam Cheng Yuet-ngor said on Monday that Hong Kong is now beleaguered both internally and externally.

On Tuesday, ahead of an weekly Executive Council meeting, Lam told reporters that Washington's move last week to enact a Hong Kong human rights and democracy law was “wholly unnecessary” and that the move may undermine the confidence of global investors toward Hong Kong.

The government will soon introduce a new round of relief measures to boost the battered economy, she said. 

On Wednesday afternoon, the government announced the fourth round of relief measures, worth over HK$4 billion.

At the end of the day, what both the chief executive and the financial secretary are counting on is ending the ongoing violence and chaos, and restoring social order as soon as possible, so as to allow Hong Kong to rise from the ashes and move on.

The problem, however, is that nearly six months since the unrest began, it is apparent the government hasn't been able to achieve its goals as it relied solely on police crackdowns on the street protesters.

The enforcement actions, meanwhile, have only fueled an unintended side effect as there is now a high level of public resentment at the perceived brutality and abuse of power by police officers.

If Lam and her cabinet allow the situation to continue and they fail to come up with a solution that can truly get to the root of the problem, there will simply be no end in sight for our economic woes.

Coincidentally, last week the city of Maoming in Guangdong province also saw an outbreak of clashes between the police and the local residents, who took to the streets to protest a plan put forward by authorities to build a crematorium in a neighborhood.

The degree of violence of the protests there was on the scale similar to what we hade seen in Hong Kong in the recent past. But the protests in Maoming were quickly put to rest within four days as the local party secretary announced that the crematorium plan was being scrapped for good.

Admittedly, a direct comparison cannot be drawn between the anti-government protests in Maoming and Hong Kong, because after all, the two cities have distinctively different situations.

Even so, there is a lesson in it for Hong Kong: the key to quickly restoring social order is for the authorities to meet people’s demands swiftly and decisively.

The Hong Kong government has failed to recognize the depth of people's feelings and didn't rise to the occasion even after citizens staged million-strong marches following the extradition bill fiasco.

What the chief executive should do right now is to stop fiddling around and open up sincere dialogue with the public and try to break the current political deadlock. What is ultimately at stake is the city's economic future.

This article appeared in the Hong Kong Economic Journal on Dec 3

Translation by Alan Lee with additional reporting

[Chinese version 中文版]

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HKEJ Editorial

Hong Kong Economic Journal