SCMP Friday, March 9, 2001

Tung heading for clash with public sector


A recent string of incidents has set the stage for an even more intense clash between the Government and the business community on one side, and public-sector employees on the other. Both appeal to values - of the market or of public service - to justify and camouflage their material interests. And the collision between them is bound to have wide-ranging implications for Hong Kong politics.
Incidents feeding this clash of cultures include: Secretary for Education and Manpower Fanny Law Fan Chiu-fun's criticism of elite government-subsidised secondary schools; outgoing Financial Secretary Donald Tsang Yam-kuen's dressing down of local universities; civil servants' reservations about banker Antony Leung Kam-chung's appointment as Mr Tsang's successor; opposition of many legislators to dramatic funding cuts for higher education; and civil servants' increasing reliance on legislative rescue when fearful of losing job security.
As a former shipping tycoon, Chief Executive Tung Chee-hwa is under the influence of his business friends and does not hold the public sector's traditions and performance in high regard. He brings into the Government a political outlook coloured by the capitalist ethos and a determination to reshape the public sector using business as the reference. His sense of urgency about reforming the public sector - despite employee resistance, particularly among civil servants - has increased, thanks to fiscal difficulties and the need to upgrade Hong Kong's economic competitiveness. Mr Tung's reforms reflect his intention to downsize the public sector and cut public expenditure. A major effect of these reforms is to blur the boundary between the public and private sectors.
Public-sector employees have resisted vociferously, forcing Mr Tung into a tactical retreat (as was clear in his October Policy Address). But the sudden resignation of Chief Secretary for Administration Anson Chan Fang On-sang, self-appointed custodian of the values of public service, and the entry of Mr Leung, a zealous reformer and believer in the survival of the fittest, have changed the balance of power at the top of the Government.
This, together with the deepening fiscal "crisis", has alerted public-sector employees to the possibility of renewed restructuring efforts likely to result in job losses, pay cuts and increased workloads. They are poised to stiffen their resistance to what they see as an increasingly pro-business administration.
Mr Tung and the business community have formidable advantages in pursuing public-sector reforms. The current worldwide hegemony of capitalist ideology provides a congenial climate for them. And, as far as I know, Beijing is supportive, although it is somewhat worried about the reforms' consequences for the SAR's stability and Mr Tung's popularity.
In the eyes of the people, public-sector employees' lacklustre performance since the handover has contrasted sharply with their private-sector counterparts' stellar accomplishments. The public is not unsympathetic to Mr Tung's reforms and is aware of the public sector's costliness, as well as its adverse effects on Hong Kong's economic competitiveness and fiscal health. So, Mr Tung and his business allies have a potential pool of support they can draw on to counter public-sector employees' resistance.
But employees also have powerful weapons. For example, the people of Hong Kong are wary of drastically altering existing practice. In addition, public-sector employees can seek refuge in the Basic Law, which promises the maintenance of existing institutions and lifestyles for 50 years after the handover.
The employees can mobilise the public against the Government by accusing it of breaching its social contract with the people in the public sector. Moreover, in view of growing public displeasure with big business and public anxiety about a business-dominated government, public-sector employees can cause alarm by persuading the people of Hong Kong that a government doing the bidding of business not only will be unfair to everybody else but also will destroy capitalist Hong Kong's level playing field. Last but not least, public-sector employees and their families make up a significant portion of the populace and so can directly wield tremendous political clout.
The Tung administration is hampered in pursuing its reform agenda by its lack of a popular mandate and the absence of a solid pro-reform coalition in society. Unfortunately, as the Government's reform agenda expands, its base of support in the community will contract. Mr Tung's previous efforts have not convinced the people of Hong Kong that he is a skilful and capable reformer. His pro-business image hampers his efforts to forge a broad base of support. And he is unwilling to seek public support of his reform initiatives by offering democratisation. This weakens his appeal. Most importantly, Mr Tung seems aware he might have to make political concessions to the people if he enlists their support to overcome the resistance of public-sector employees. So his appeal to the public is half-hearted, and he is left relying on his administrative powers.
Paradoxically, Mr Tung's reforms might prove a godsend for legislators, who have long resented the Government's attempts to marginalise the Legislative Council. The legislature has no power to make policy, but it does have the power to scuttle the Government's reform proposals. As the battle between Mr Tung and public-sector employees heats up, the legislature will probably become the focal point of anti-reform forces, and its influence, status and resources will be enhanced.
The balance of power between the executive and the legislature will shift in favour of the latter, thanks to support from public-sector employees and, among them, intellectuals disgruntled at the surge in the business sector's power. Mr Tung might have to share power in return for legislators' support of his reforms. And pro-democracy forces in the legislature will be in a better position to mobilise the public's support for a faster pace of democratisation by advocating less dominance by big business.
Admittedly, Hong Kong needs public-sector reform, and there is some demand for it among the people. At the same time, however, people want a healthy balance between the public and private sectors and between market and public-service values. The outcome of the battle between Mr Tung and the public-sector employees is far from decided, but the clash between them will definitely change the political landscape. The nature of that change remains unclear.
Lau Siu-kai is the chairman of The Chinese University of Hong Kong's Department of Sociology and the associate director of its Institute of Asia-Pacific Studies.