How to turn the pandemic into utter misery for the less well off

Stephen Vines August 10, 2020 10:42

Long after the coronavirus has receded and Hong Kong gets back to ‘normal’, the painful scars of impoverishment will linger. While the Lam administration spares no effort to weaponize the pandemic for political purposes it has been extraordinarily negligent in addressing citizen’s welfare.

Unemployment has hit a 15-year high with official figures showing that 6.2 per cent of the workforce have no jobs. However this is the tip of the iceberg because this figure does not cover the small army of part time and freelance workers, nor does it reflect the very real hardship of those still counted as being in employment but are subject to reduced hours without pay.

It is too much to hope that the government would be able to take an imaginative approach to this crisis but even in handing out cash to alleviate the pain it has proved to be miserly and almost aggressively focused on the wrong targets.

Hong Kong enjoys one of the world’s highest level of fiscal reserves with some HK$1.1 trillion to hand.

But when it comes to relief measures the government seems determined to ignore the plight of those now reduced to real levels of poverty while paying equal attention to the well off. Thus the biggest single item of the so-called ‘handout’ measures was to give HK$10,000 to every citizen from billionaires to those getting by on a few thousand dollars per month.

The second biggest of the relief schemes, the wage subsidy scheme, makes no distinction between the highest and lowest paid workers. Even more problematic is that the money is not paid directly to those who qualify but to their employers, some of whom have proved to be unscrupulous in the use of this cash infusion. Typically, in a government that is as incompetent as the Lam administration, there is no system of safeguards to prevent this happening.

Paul Chan, the amiable lacklustre accountant, who controls Hong Kong’s purse strings as financial secretary, recently said that his immediate priority was to focus efforts on getting a corridor open for travel between Hong Kong and Greater Bay Area. Apparently partially opening the border to the Mainland is way more pressing than helping the poor put rice in their bowels and way more pressing than doing something positive to avoid a mounting slew of company closures.

There is a massive opportunity for the government itself to spend money in improving Hong Kong’s infrastructure so as to create both jobs and stimulate spending in the local economy. That means using this crisis to plan for the future, possibly emulating the example of the European Union recovery fund which is ploughing €750 billion into aiding parts of the economy showing promise for profitable development.

In Hong Kong there is still a massive deficit of spending on green initiatives and while universities are relatively well funded, support for public education at the pre-school, primary and middle school levels remains below par, depriving the next generation of opportunities they should have at a crucial time in their lives. And, let’s not even get started on the dire state of Hong Kong’s public housing stock.

So, the opportunities are there but the government has firmly decided to ignore them. Mr Chan seems to know that Hong Kong has massive cash reserves but has firmly ruled out using the biggest pool of cash in the Exchange Fund, which, he says is ‘untouchable’ as it needs to stay there to defend the Hongkong Dollar peg.

For aeons we have been told that Hong Kong’s cash reserves have been built up in anticipation of a rainy day. Who can seriously argue that right now it is not merely raining but pouring?

The Lam administration has yet again firmly demonstrated that it never misses a chance to miss a chance. Unfortunately, in this instance, its negligence is causing profound suffering.

-- Contact us at [email protected]

Stephen Vines

Hong Kong-based journalist, broadcaster and book author. His latest book, Defying the Dragon – Hong Kong and the world’s largest dictatorship, will be published by Hurst Publishers in early 2021.