SCMP Thursday, October 12, 2000
Social focus overshadows finance
Economists yesterday struggled to summarise Mr Tung's vision for financial growth after a Policy Address that focused mainly on social issues.
"I wouldn't say economists were disappointed . . . but he was not offering new incentives or long or short-term policies related to the economy," Credit Suisse First Boston senior economist Dong Tao said.
Mr Tung told Legco he would look at three themes - education, poverty and governance. He only touched on economic issues, such as the importance of a stable property market.
Previous addresses concentrated on initiatives to tackle the fallout from the Asian crisis. But the economy has rebounded and the Government recently upgraded its growth forecast for 2000.
"I think this was a Policy Address trying to focus on social pain . . . this is an address trying to ease a little bit of negative publicity," Mr Tao said.
Chinese University department of economics senior professor Kwong Kai-sun said Mr Tung's speech showed the Government had realised its limitations in directing economic issues. "I think most economists believe in small government. They don't believe in it taking a large role in shaping the economy," Mr Kwong said.
Mr Tung spent much of his speech on initiatives to improve the quality of schooling for primary and secondary students. The Government will also spend $2.7 billion in the next two years to finance various measures to help the poor.
"It was actually expected. The most pressing problem that we are facing now is the large number of people that are classified as poor," Mr Kwong said.
But he said Mr Tung had also sent a message that a robust economy was vital in helping the needy.
In summarising his speech on the wealth gap, Mr Tung said: "I must point out once again that the fundamental way to address the poverty problem is to create ample employment opportunities through sustained economic growth on the one hand and continuously upgrade the quality of people's skills through education on the other."
Chase JF senior economist Daryl Ho Hon-kit said apart from some background on how Hong Kong should face the challenges of China joining the World Trade Organisation, there was little economic news.
Mr Ho said Hong Kong's economic stability, however, depended more on global occurrences than local policies. "[The Government's job] is to ensure that we have a free market and better labour mobility," Mr Ho said. "Little was said on the economy. It was just the facts."
Mr Tung said the goal for the first decade of the century was to double this year's gross national product, with much of the economic impetus coming from China's economic growth.
The momentum of Hong Kong's economic rebound would persist and the unemployment situation - now 4.9 per cent - would improve, Mr Ho said.
Hong Kong General Chamber of Commerce director Eden Woon Yi-teng welcomed Mr Tung's speech, saying he agreed economic expansion was the best way to deal with some issues. He said that although the address was "short on initiatives", it had dealt with important issues of immediate concern to the broader community.