Friday, October 27, 2006

GOVERNMENT ARROGANCE
The perils of political petulance


STEPHEN VINES
   
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   Petulance is a familiar but unattractive trait in the behaviour of young children. When governments adopt it as a political tool, alarm bells start ringing. They were ringing last week as the government responded to the overwhelming vote in the Legislative Council against the proposed goods and services tax.
It is rare for all parties in the legislature to agree on anything, and when they do it might be assumed that they have good reason. But this was not the view of Financial Secretary Henry Tang Ying-yen: he could hardly wait to accuse honourable members of wanting to stifle debate on the GST and failing to understand the issues.


Mr Tang has been rushing all over town shaking his head and berating the GST's opponents for their lack of understanding and wilful refusal to accept the government's arguments.

No one should criticise a government minister for arguing his case. But Mr Tang and his administration colleagues tend to spend less time explaining the case for the new tax and far more on questioning the motives of its opponents. Were this an isolated case of government behaviour, the accusation of petulance would be hard to sustain, but this is not so.

Look at what happened after the chief executive's constitutional reform proposals were defeated, in December. Not only did Donald Tsang Yam-kuen lash out at its opponents as irresponsible, he went on to say that if they would not accept his plans he was in no mood to put forward any others.

Much the same kind of behaviour was seen in the Tung administration during the demise of the Article 23 legislation on national security. The bill's critics were roundly accused of both ignorance and opportunism - even though the overwhelming evidence suggested that they knew exactly what was at stake.

The great unwashed, sometimes known as the general public, are supposed to be the targets of government persuasion campaigns. Indeed, Mr Tsang speaks of the need for "consensus" with such frequency that it might almost be assumed that he means what he says.

Yet, the suspicion lingers that what he really means by consensus is agreement with the government. When that is not forthcoming, the public is patronisingly told that it simply does not understand the issues.

Hardly surprisingly, this does not go down too well. And political leaders often underestimate the public's acute sense for detecting petulance in their behaviour. Hong Kong's political elite is far from having a monopoly on this kind of behaviour: it is found throughout the world.

In Britain, for example, the leadership of John Major was arguably more damaged by his appearance of petulance than by the policies he was pursuing.

The same may be said of Al Gore's controversially ill-fated campaign for the US presidency. That was laid low not just by hanging chads, but to a greater extent by a feeling that many Americans did not want a petulant leader in the White House.

Both Mr Major and Mr Gore are essentially decent people who are said to be perfectly amiable in private. Yet, up there on the public stage when things start going wrong, they showed another side of their personalities - one that alarmed the public.

It must be assumed that Mr Tang is also a perfectly decent person. But that attribute is severely undermined when he dons his GST cap and confronts sceptics who simply cannot accept his arguments.

The root cause of this unacceptable behaviour generally lies with the arrogance of power. Mr Gore seemed unable to believe that an upstart frat boy and ex-governor of Texas could win over voters in such big numbers. Mr Major, who clawed his way to the top of British politics from humble origins, was dismayed by his grander - and often dimmer - colleagues who undermined his policies.

Here in Hong Kong, Mr Tang has armed himself with fancy PowerPoint presentations to sell the GST, yet keeps meeting resistance from all sorts of people - some of whom opt for just low-tech scribbles on a scrap of paper to present their response to the minister's arguments.

Stephen Vines is a Hong Kong-based journalist and entrepreneur.



http://focus.scmp.com/focusnews/ZZZ9T1Q3PTE.html

Tuesday, October 31, 2006

EDITORIAL/LEADER
We must be told why ferry plan hit the rocks



   
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   The relevant figures suggest that a ferry service between Tuen Mun and Macau would make good social and business sense. Why it has failed to launch after repeated delays is a question to which the parties concerned owe the public an answer.
The service was first scheduled to begin in December 2004. For the 3 million people of the northwestern New Territories, it would have greatly cut travelling time to Macau, as they would no longer need to spend an hour going to Central or Tsim Sha Tsui, where existing services depart. Also, sailing time from Tuen Mun to Macau is 20 minutes shorter than the one-hour ride from those two points.

  
But operator Hong Kong North West Express failed to launch the service as scheduled. The company has since changed hands and is now controlled by Greek Mythology (Macau) Entertainment Group Corp. As late as July, it was very upbeat about setting sail to Macau in September. Once again, however, it has failed to honour its pledge.

The operator has refused to explain the failure. But a source close to the company said its boats had not been given permission to dock in Macau because of insufficient berthing space. It also suggested that a solution might lie in the company finding a new investor. The Macau Port Authority has confirmed that it had not given berthing permission to North West Express, but would not say why. The Hong Kong government would only say that it was liaising closely with the operator over the matter.

No one should underestimate the difficulties of launching a cross-border ferry service, especially on a route that is already serviced by two established operators. But the lack of transparency by the parties concerned is frustrating, as it bars public discussion on why a significant undertaking to improve cross-border transport services has hit the rocks.

For historical reasons, ferries bound for Macau and other ports in the Pearl River Delta estuary now depart from Central and Tsim Sha Tsui. For residents of the New Territories, however, these two locations have never made geographical sense. A cross-border ferry terminal in Tuen Mun will go a long way towards meeting demand in the region. Despite its setback in serving Macau, North West Express is set to launch a new service from Tuen Mun to Zhuhai on Friday. Hopefully, it would be able to provide services to other PRD ports over time.

Perhaps contractual arrangements with existing operators have barred the Macau authorities from allocating berthing slots to a new operator. But they owe the people of Macau an explanation as to how berthing rights at the terminals are parcelled out and how new operators will be accommodated. The Macau government should know that the interests of the city are best served by facilitating the arrival of the largest number of visitors, regardless of what boats they take.


http://focus.scmp.com/focusnews/ZZZJZ7BYSTE.html

Wednesday, November 1, 2006

EDITORIAL/LEADER
HK consumers need to know what they're eating



   
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   The American fast-food firm KFC's decision to stop adding trans fatty acids, commonly known as trans fats, to its menu items is welcome proof that even the biggest profit-driven corporations are willing to put their customers first. It is a lesson Hong Kong's government and companies would do well to take note of and follow.
KFC's decision did not come off its own bat; pressure groups had been making the call for years and rival firm Wendy's took the plunge in June. There was also the scientific evidence: artificial trans fats substantially increase the risk of coronary heart disease.


Denmark effectively banned use of trans fats in 2003 when it became the first country to introduce laws regulating the sale of many foods containing them. As of January 1, companies in the United States have been required to label their presence in food produced or imported and the European Union is looking into legislation.

Restaurants in the US are not required to indicate the presence of trans fats in the food they sell, but concern about the health effects of food has prompted companies to be transparent - or suffer a loss of business. In the US, for example, a McDonald's fast-food customer can ask for a nutrition information sheet before making a purchase.

Such changes do not make the food more healthy. Rather, they merely give customers information to help them make healthier choices in what they eat - surely essential as the world is experiencing an epidemic of obesity and related diseases due to poor eating habits.

Our government seems to realise this, having promptly put in place laws requiring food producers and importers to label the ingredients on packaged goods. Before the end of the year, legislators will begin debate on a bill requiring nutrition facts to also be included. But if the law is passed, companies will still have a two-year grace period before they are required to comply.

The government's model on food safety is the EU, which is widely seen to provide an international standard. As with so much legislation here, however, there is a danger that pressure from the business community will cause the requirements to be watered down - or even ignored - as with the case of genetically modified (GM) food. The mainland, Japan and EU nations require mandatory labelling of GM food, putting public safety ahead of corporate profits. Hong Kong has, like the US, failed to implement this requirement.

Such an arbitrary approach must not be allowed when it comes to food labelling. It is in the government's interest that the health of the community is foremost, and information and transparency are key in this regard.

If KFC, a company not required by law to be open about its ingredients, can have a conscience on this matter, there is no reason why our lawmakers cannot also put the health of the community first.


http://focus.scmp.com/focusnews/ZZZLXB7AYTE.html

Thursday, November 2, 2006

EDITORIAL/LEADER
Sino-US co-operation vital on North Korea



  
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   China's policy of non-interference in another country's internal affairs has served it well. It has been instrumental, for example, in securing resources deals with other nations that could have been derailed if it had taken an unwelcome interest in humanitarian issues.
That is a delicate balancing act. North Korea pushed it beyond its limits by conducting a nuclear test in defiance of international opinion and warnings from Beijing. China's rare show of anger with its old friend and neighbour and support for UN sanctions was evidence of that. Non-interference does not extend to nuclear proliferation on China's doorstep by a secretive, economically dysfunctional dictatorship that has turned its back on international agreements.


Thanks to some deft diplomacy backed up by pressure on Pyongyang, Beijing has emerged from this crisis smelling of roses. Within three weeks of the atomic explosion that shook the world, it has brokered meetings between United States and North Korean negotiators, and agreement from Pyongyang to return, without preconditions, to the six-nation nuclear disarmament talks.

US President George W. Bush has thanked China for its mediation, and chief American negotiator Christopher Hill said close co-operation between the US and China had been a key factor. At least something good has come out of a serious threat to stability and peace. An improved diplomatic working relationship between Washington and Beijing can only make the world a better place.

As Washington acknowledged with a slight but crucial relaxation of its inflexible approach to North Korea, China, as the North's economic lifeline, was in the best position to force Pyongyang back to talks. There is debate about how much significance to attach to statistics showing China sold no crude oil to North Korea in August. The apparent cut-off, after missile tests in July and before the nuclear test, is highly unusual. If repeated, it would cripple the North's economy.

More co-operation between Washington and Beijing adds a new dimension to the negotiations that lie ahead. The talks have already dragged on for three years. Last September, they resulted in a framework agreement under which the North would abandon its nuclear weapons programme in exchange for a range of diplomatic, economic and energy incentives. But the North disavowed it, citing financial sanctions imposed by the US, and the talks collapsed. It may be a hopeful sign that North Korea reportedly insists that this agreement should be the main focus of the renewed talks.

When the talks resume, Pyongyang may be expected to demand recognition as a nuclear power, and try to negotiate from a position of strength. The other five nations, which also include South Korea, Japan and Russia, must make it clear that this is out of the question. North Korea expelled International Atomic Energy Agency inspectors three years ago and withdrew from the Non-Proliferation Treaty. The least that should be expected now is that it agrees to scale down its nuclear activities and readmit inspectors. Given Pyongyang's record as an unreliable negotiating partner, the talks may be expected to run into deadlock sooner rather than later, perhaps on this issue.

On the sidelines of the six-nation talks, the US has agreed to discuss its sanctions against North Korea's international banking operations, in particular the freeze on funds in Banco Delta Asia, the Macau-based bank accused of helping the North launder the proceeds of drug smuggling and other illicit activities, and to pass counterfeit US$100 bills printed by the Pyongyang government. The US may be expected to take a tough line. After all, state-sponsored undermining of another nation's currency with counterfeit notes is an uncommonly hostile act.

Clearly, if North Korea is to be convinced that its negotiating partners are united and that disruption of the talks will only delay the lifting of UN sanctions, diplomatic co-operation between Washington and Beijing remains a key factor.


http://focus.scmp.com/focusnews/ZZZ8MCX9YTE.html

Friday, November 3, 2006

GOVERNMENT INTERVENTION
Ashamed of its own achievements


STEPHEN VINES
   
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It was fortunate that Hong Kong government officials never thought of calling up some elderly American academics practising the religion of the free market when a massive fire swept through the Shek Kip Mei squatter camp on Christmas Day, 1953. Had they done so, they would have been assured that the 53,000 left homeless could look to the free market to find shelter.
Instead, it was decided that the state had better do something, so Hong Kong's first public-housing estate was built on the ruins of the squatter area. Now the ailing estate is about to be torn down. But public housing still provides homes for about half of Hong Kong's people - a far higher proportion of state housing than in most so-called welfare societies.

The presence of such an enormous public housing stock puts the current debate on the limits of state interventionism in some perspective. Chief Executive Donald Tsang Yam-kuen caused alarm in September by declaring that the government had abandoned its long-standing policy of "positive non-interventionism", and now favoured the principle of "big market, small government". As ever, the chief executive was being both honest and disingenuous.

The truth is that positive non-interventionism was never practised in a place that housed half its citizens in public-housing estates; where the government held a monopoly on land ownership; and was forever devising new schemes for state investment in everything from theme parks to exhibition halls. So it was just as well that Mr Tsang came clean on this point.

Yet, he only partially came clean. That's because he presides over an administration that has more big-government reflexes than most of its colonial predecessors. This is not always a bad thing. But fear of criticism from the true believers in free markets prevents Mr Tsang and his colleagues from making a coherent case for where intervention is appropriate and where it is not.

The demise of the Shek Kip Mei estate provides an opportunity to review these arguments. The myth about its birth is that it grew from a genuinely humanitarian response to a tragedy. But a new work by Alan Smart - The Shek Kip Mei Myth: squatters, fires and colonial rule in Hong Kong 1950-1963 - effectively destroys this. Professor Smart shows that the government was initially reluctant to do anything about the squatters' plight. It finally acted out of concerns for political and social stability.

Moreover, as the public-housing programme developed, it had the tacit support of Hong Kong's tycoons. They saw that, if the free market dictated housing prices, they would have to pay a lot more in wages. This highlights the big, dirty secret of the free-market debate: namely, that most actual market participants - as opposed to academics and think-tank members - are pragmatic enough to see the virtue of state intervention, especially where their own interests are concerned.

And there is a case to be made for the state to have a role in economic development, and even more so in social stability. This is why people like me, who basically believe in the virtues of the free market, are also aware that few markets are truly free and that the absence of state interventionism is far from being a panacea.

Why can't the government be proud of where it has intervened to good effect? The provision of housing is nothing to be ashamed of, even if the programme may have outlived its usefulness. Similarly high levels of health care provision are to be admired, as is universal access to primary and secondary education.

Yet government leaders are coy about proclaiming the merits of anything that looks like welfare-stateism. They fear that such proclamations could provoke rebukes from well-heeled professors in American Ivy League universities. But maybe they should get out more, possibly visiting places like Shek Kip Mei - where the difference between state interventionism and?inaction is the difference?between shelter and home- lessness.

Stephen Vines is a Hong Kong-based journalist and entrepreneur.



http://focus.scmp.com/focusnews/ZZZO1GX9YTE.html

good job, thank you.

Thank you.

Monday, November 6, 2006

EDITORIAL/LEADER
Why executing Hussein is not the answer



  
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   The death penalty handed down to former Iraqi president Saddam Hussein will, understandably, seem like justice to his many victims and critics. However, one of the aims of the trial should have been to help heal the wounds his regime caused. Sadly, the ruling will not achieve such an end, given the manner in which it was arrived at.
Nor is executing the ousted dictator going to move the strife-torn country forward. Instead, it will only deepen the religious and political rifts preventing the nation from finding its post-Hussein feet.


Putting Hussein on trial was never going to be an easy process; the ruthless manner in which he had clung to power through more than two decades of rule was well documented and no Iraqi could be left with an unbiased opinion. That the US, which had ousted Hussein, was in the background of every decision made by the interim government muddied the waters of impartiality. The circumstances were not ideal as conflict was raging, but putting the past behind seemed imperative to many Iraqis. Still, a viable plan was formulated after the ousted leader's capture in which he would be tried under international law by a special Iraqi court.

If the trial had been carried out as promised, objectives could have been achieved; as it is, the proceedings were so flawed they made a mockery of the judicial system, and in the process, the government's ability to forge a united Iraq has been compromised.

Political interference, a lack of court impartiality and inadequate protection for defence lawyers and witnesses marked the proceedings. Each time a lawyer was assassinated, there should have been cause to evaluate whether proceedings should continue. Instead, the court went about its business as if nothing had happened.

The original chief judge was replaced on the pretext that he was unable to maintain order. True, Hussein had become adept at disrupting proceedings, but the new judge was perceived as overly US-friendly.

Throughout, politicians commented on proceedings. After yesterday's verdict, before an appeals process had even begun, their biased views were given freely. Prime Minister Nouri al-Maliki's spokesman was quick to weigh in: "This is the least that Saddam deserved because his crimes were great. No further punishment was possible." Mr Maliki is from Iraq's Shiite Muslim majority, which was stripped of many rights under Hussein, a member of the Sunni Muslim minority. Rivalry between Shiites and Sunnis is central to the insurgency threatening the country's future, and such remarks do nothing to bring about calm. Making Hussein a martyr by executing him would only further inflame passions.

There is a chance for hope, though: through a properly conducted appeals process, the injustices of Hussein's trial can be corrected. For the judicial system to do otherwise will be to ignore one of the basic foundations that the fledgling government claims to be so willing to build: a free and fair society.

That process should begin with a rethink of sentencing of Hussein and one of his co-defendants to death by hanging. While the execution of the former leader will be full of symbolism for the millions of Iraqis victimised by his regime, and in line with Muslim judicial practices, it does not establish a good precedent. Human life is foremost under international law. Execution should not be a sentencing option.

There is no doubt about the brutality and excesses of Hussein's rule. The crimes against humanity charges he was found guilty of and sentenced to hang for are the most serious that can be brought.

But no matter how grave the charges, a fair trial - which, as promised, meets international standards - has to be the basic principle followed by all courts. Hussein has clearly not been given such a trial and without amends, Iraq's efforts to move forward will be jeopardised.


http://focus.scmp.com/focusnews/ZZZC0FSX1UE.html

Tuesday, November 7, 2006

EDITORIAL/LEADER
Problem of assaults on trains must be addressed



   
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   Dozens of women file official complaints each year about being indecently assaulted on our trains. The problem is an unfortunate reality in many of the world's cities, particularly during rush hours. But whereas authorities elsewhere have taken concerted action to prevent the activities of gropers and flashers, here there is little noticeable deterrence.
Anecdotally, the 74 reported cases last year and the 32 in the first nine months of this year are the tip of a far wider problem; a survey by one women's group in 2004 showed that two of every three women interviewed who used public transport claimed to have been indecently assaulted. Such difference in figures is well known to police: crimes of a sexual nature too often go unreported.


Yet despite the matter being of public concern since the 1990s, the only sign of action are posters in KCR ticket areas urging victims to report incidents. (The scheme has been discontinued by the MTR Corp, which had posters on platforms, but never allowed them in trains, where the crimes are committed.)

Stridently pushing such a programme has an obvious downside: too many posters in prominent places gives the impression that our train systems are rampant with gropers and women may be scared off. Nonetheless, women should feel as safe as men on public transport and the issue needs to be taken more seriously.

One concern group has suggested women-only carriages, a scheme that has already been introduced with mixed results in other places such as Taiwan, Japan, India, Mexico and Brazil. India's biggest city, Mumbai, has gone a step further by having four women-only trains scheduled each day on some lines.

Hong Kong is a relatively safe city and the scale of the problem here is not as bad as elsewhere; Tokyo, for example, reported 2,137 incidents of women and girls being groped or the subject of other lewd behaviour while travelling on trains last year, from which 1,853 men were arrested. New York police in June staged an undercover operation to stamp out rampant sexual harassment on the city's subway, arresting 13 men in 36 hours. Measures such as those taken in New York are extreme and may not be necessary here. But without properly knowing the real concerns of women commuters, it is impossible to formulate an effective strategy.

What is paramount, however, is that commuters should be able to travel without fear. A survey is clearly needed to gauge the true scale of the problem and when results are known, firm action taken. This may mean increasing penalties and shaming offenders who are caught, installing better surveillance equipment or even providing women-only carriages.

In the meantime, efforts by the government and transport companies to increase awareness must be stepped up. There cannot, under any circumstances, be any shying away from such a matter.


http://focus.scmp.com/focusnews/ZZZR1WL47UE.html

Wednesday, November 8, 2006

EDITORIAL/LEADER
More cash needed to ward off desert threat



   
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   The world remains torn between the politics of economic development and dire predictions of global warming if greenhouse emissions are not reined in.
This dilemma was captured last weekend at China's summit with African nations in which generous no-strings economic assistance was offered to help secure the oil and other resources that China needs to fuel economic growth.


It is not uncommon to read of oil and gas deals that seem to guarantee jobs and prosperity, and the next day of a climate-change scenario in which rising oceans drive populations back on an environmentally stressed Earth.

The focus of the dilemma has shifted to the United Nations climate conference in Kenya, at which signatories to the Kyoto treaty on limiting greenhouse emissions will try to agree on the next steps to combat the worst effects of climate change. Warnings of global warming and climate change evoke a range of emotions from scepticism to a feeling of helplessness. Desertification does not get the same reactions. But it goes to the heart of climate change, as is evident from today's report on a smaller UN conference in Israel on desertification - or the spread of arid land.

Why Israel? Because it is recognised as a leader in innovative development of dry lands. But there is another reason. In the words of an official of the UN Convention to Combat Desertification, if current climate scenarios continue, conflict in the 21st century will be over water, not oil.

Indeed, China's vice-minister for water resources says the mainland looks set to use 89 per cent - if not all - of its water resources by 2030.

Deserts comprise about 18 per cent of the mainland's land area, and desertified land another 4 per cent. Northwestern deserts are advancing south and east at a rate of 3,650 sq km a year. Cultivation, grazing, deforestation and irrigation, and now a severe drought consistent with climate change, have helped giant dunes advance, forcing people to move. The UN has said 400 million Chinese live in areas threatened by desertification. Unless the trend is reversed, millions of people could be on the move in coming years, looking for new homes and livelihoods.

The deserts have given rise to another threat every spring across northern China, North and South Korea, Japan and sometimes even the west coast of North America - dust storms. Sand and dust carried by Siberian winds, often coated with industrial pollutants trapped in the atmosphere, are depositing grit that is causing economic damage and affecting the health of tens of millions of people.

The central government must allocate greater funds to preventing desertification and ensure they are effectively used. Sharing the knowledge gained with African nations could be a precious reward to that continent for helping fuel China's economic rise.


http://focus.scmp.com/focusnews/ZZZ51RL47UE.html

Thursday, November 9, 2006

EDITORIAL/LEADER
Challenge now begins for Margaret Chan - and China



   
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   Margaret Chan Fung Fu-chun's achievement in being nominated as director-general of the World Health Organisation says much about the growing diplomatic muscle of China. Her personal attributes, especially the work she has done since joining the organisation, clearly played a part. But Beijing's strong support for Dr Chan was the crucial factor. The central government was determined to install its candidate as chief of this increasingly important international organisation.
China rightly saw the WHO opening as a golden opportunity and mounted an impressive campaign to achieve its objective. The timing of the Sino-Asean and Sino-African forums held over the past week may not have been coincidental. They provided a good chance for the leadership to quietly lobby for Dr Chan.

  

Following her expected confirmation today, Dr Chan will have a tough task ahead to build her credibility. As a public health worker who has spent most of her career in Hong Kong, her international working experience was the weakest of the candidates. It was only three years ago that she was plucked by her predecessor, South Korean Lee Jong-wook, to serve as one of the WHO's assistant directors. Few would have thought his unexpected death in May would catapult her to the top job.

Dr Chan must show she is capable of spearheading the WHO's efforts to achieve its mission - attaining the highest possible level of health around the world. Apart from demonstrating professional competence, it is essential that she makes good on her pledge to be independent. China's relationship with the WHO has not always been easy and transparency has been a key issue. Dr Chan must show that she is scrupulously transparent.

She must also work for the interests of all peoples, even though her support in the election has mainly come from China's friends in the developing world.

At a time when some of the world's greatest health threats are communicable diseases, Dr Chan's experience in combating bird flu and Sars in Hong Kong is her greatest asset. But although her professionalism caught the eye of Dr Lee, her performance during those difficult times was not flawless. Serious questions were raised about her handling of the outbreak. The reaction in Hong Kong to her elevation is, therefore, understandably mixed.

It is to be hoped that the tough, hands-on experience was a learning process for Mrs Chan that has boosted her ability to handle future crises, wherever they occur.


Securing the top job is a great achievement that shows what Hong Kong people are capable of. Hong Kong's return to China in 1997 has opened up new opportunities. But the real challenge now begins and the biggest test is for China. The country used its diplomatic muscle to secure the position for Dr Chan. Now it must show that it is up to the task by displaying a degree of transparency on health issues that too often has been lacking.


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Friday, November 10, 2006

EXCHANGE FUND
Asking the 'wrong' questions


STEPHEN VINES
   
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   Every time Joseph Yam Chi-kwong, the chief executive of the Hong Kong Monetary Authority, announces the results of the Exchange Fund's investment earnings, I am uncomfortably reminded of a visit to a state-run steel mill in Hanoi.
The visit took place almost two decades ago, when Vietnamese authorities were trying to persuade a visiting journalist that the economy was in great shape. So I was ushered into a drafty meeting room and shown graphs proclaiming ever-rising steel production.


I am no steel expert, but I do understand that it's impossible to produce steel when the furnaces are shut down, as they were. However, the room was full of charts telling another story. The earnest official designated to dazzle me with figures said that production had doubled over the past year.

So, how many tonnes of steel did you make last year, I asked? Twice as many as the previous year, came the reply. Yes, but how many actual bars of steel are we talking about, I persisted. I was sternly informed that this was the wrong question. Mr Yam was lucky not to be asked any "wrong" questions on Monday, when he reported to lawmakers the third-quarter investment earnings of the Exchange Fund - the reserve backing the Hong Kong dollar. He, too, has a way with figures and had a great story to tell. He said earnings were up 79 per cent on the previous year and, as a result, a massive HK$67.8 billion was winging its way into government coffers.

Sounds good, does it not? Certainly, it's a better story than the one which says that the HKMA's great investment managers secured a paltry return of just under 6.3 per cent, a figure not mentioned on Monday. But Mr Yam conceded that the fund may not even manage to do that well by the end of the year.

Getting detailed information on how the fund operates is far more difficult than gaining the same amount of information about a privately managed mutual fund that is open to the public. Yet the Exchange Fund contains the public's money.

We are told that 77 per cent of its assets are invested in bonds, while the balance goes to the stock market. In the first three quarters of this year, the average return for bond funds ranged between 5 and 7 per cent. That places the HKMA in the middle of investment returns achieved by its private-sector counterparts.

However, a quarter of the Exchange Fund's investments are in equities, which have preformed far better. The bulk of these equity investments are in the Hong Kong stock market, which rose by some 15 per cent between January and September.

This suggests that even the dimmest fund manager should have managed something better than a single-digit increase in earnings.

And the record shows consistent underperformance by Hong Kong's custodians of the public purse. Last year, the Exchange Fund secured an underwhelming 3.1 per cent return; the year before, it was 5.7 per cent.

Yet every year (with the exception of 2004) the HKMA boasts of beating the benchmark. What, exactly, is the benchmark? The authority seems unable to say, referring inquirers to its annual report. But that gives no indication whatsoever of the benchmark figure. It notes only that the target is approved by the financial secretary after consultation with the Exchange Fund Advisory Committee.

The HKMA says that its objectives are to pursue a conservative investment policy and maintain financial stability. This may explain why the fund never produces spectacular returns - but it does tell us why its managers languish so low on the performance scale. Elsewhere in the financial world, benchmarks are specific figures against which performance can be judged.

The Vietnamese no longer show journalists around rusty steel mills to prove that the economy is booming: maybe the HKMA can learn something from Hanoi.

Stephen Vines is a Hong Kong-based journalist and entrepreneur.



http://focus.scmp.com/focusnews/ZZZGSWL47UE.html

Keep on it!!!

Monday, November 13, 2006

EDITORIAL/LEADER
Vigilance still needed on protecting harbour



  
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   Conservation groups yesterday focused their main activities for Harbour Week on the just-vacated old Star Ferry pier, which will soon be torn down to make way for a shopping mall and road as part of the Central waterfront reclamation.
Many people at the pier were there to take a last look at the site steeped in history and memories. It is a small reminder of the wider development that is taking place on our harbourside - and of the need to ensure that Victoria Harbour is both protected and enhanced.

  

Truth be told, despite a series of government schemes being proposed or under way on harbourside development, the steam appears to have gone out of the campaign for its preservation. Just 300 people showed up to voice disapproval with plans, compared with the tens of thousands who over the past decade have demonstrated or signed petitions.

This is, perhaps, a sign of calmer political times. But the need for vigilance remains, given the scale of what is in the pipeline and how it will indelibly affect Hong Kong. The disappearance of the Star Ferry and Queen's piers are just a small part of that - from Central, through the Tamar dock at Admiralty, Wan Chai and Causeway Bay to North Point, projects will change the way our famed skyline looks. On the Kowloon side of the harbour, the old Kai Tak airport site and West Kowloon will also change appearance under plans for a cruise ship terminal and sports complex, among much else, for the former, and an arts complex for the latter. There is much at stake.

What the waterfront will look like in a decade or so when ideas and paper plans have been turned into concrete and steel is largely guesswork; similarly, whether these projects combined will be beneficial or detrimental to our image remains unclear. The reason is that, despite plans drawn up for the various projects, no one in the government has a clear overall picture of how Hong Kong should develop. At least half a dozen government departments are involved in the projects being worked on and each scheme is being planned and funded separately. Roads may inter-connect and promenades join up, but there is no document that is a master plan to steer our development towards an eventual goal.

The piecemeal approach is not confined to the harbour. A report released last week by the private-sector think-tank Civic Exchange lamented that the government dealt with rural land, which comprises 30 per cent of Hong Kong's area, in the same disjointed way. Visitors to the New Territories can clearly see the result of the lack of co-ordination: fire-scarred hills, rubbish tips, rusting vehicle bodies, farms and in between, three-storey villas. In a number of places, it is an eyesore.

The harbour is the centrepiece of Hong Kong, so the same unappealing fate is not likely to be in store. Yet the danger of not having a single authority responsible for how it develops makes for an uncertain outlook. Officials in the Australian city of Sydney, also graced with a similarly stunning harbour, realised the importance of what their city had and seven years ago established the Sydney Harbour Foreshore Authority. By co-ordinating development and activities and helping stage concerts and other events, the people of Sydney can now experience and enjoy an asset that they would not otherwise have been so fully able to.

Our Town Planning Board in 2000 promised that the harbour would be "protected and preserved as a special public asset and a natural heritage of the people of Hong Kong". A 2004 Court of Final Appeal decision on the Wan Chai reclamation ruled that plans to reclaim 26 hectares were not in accordance with the Protection of the Harbour Ordinance, which limits the extent to which the harbour can be turned into land. But, according to a recent Civil Engineering and Development Department blueprint, 15 hectares of the harbour will be reclaimed under a plan to build a traffic bypass between Central and North Point by 2015.

Victoria Harbour is our foremost asset. If it is to be wisely developed for our best use, the government should establish a separate authority to ensure it is developed as it has pledged: with the people of Hong Kong foremost in mind.


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Tuesday, November 14, 2006

EDITORIAL/LEADER
World must deliver on pledges to Afghan people



   
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   The international focus on Iraq's problems, as the country struggles for peace and democracy, has drawn attention away from Afghanistan, which is just as important an experiment in efforts to bring justice to people around the world.
Afghans are undergoing no less a harrowing experience as Iraqis and have been given the same promises to be pulled from decades of conflict and put on the path to stability and prosperity. Both nations deserve to have those pledges kept. To do otherwise would make a mockery of international honesty and will.


When a US-led military coalition ousted Afghanistan's Taleban regime five years ago, hopes were raised for a new beginning after years of foreign occupation, civil war, the rule of warlords and the constraints of Muslim fundamentalism. Billions of dollars of aid was pledged, and development agencies and charities stepped in to turn dreams into reality. Democracy was restored and women regained the rights that they had lost under the Taleban.

But what had been pledged was not backed by action. Only a fraction of the billions promised materialised and an international military force to provide security and fight off the remnants of the Taleban was too small. Even now, the Nato-led force numbers just 30,000, one-fifth the size of the strength of foreign troops in Iraq and 10,000 less than the Nato commitment in 1999 to Kosovo, which is much smaller in area.

The result is that the Taleban are resurgent and fighting has stalled development projects. Since the start of the year, at least 3,700 people have been killed, one-third of them civilians. For many Afghans, life is worse now than it was five years ago: they still do not have jobs, the cost of living has risen, infrastructure remains inadequate and security is lacking.

Iraqis are enduring the same hardships more than 3-1/2 years after a US-led coalition invaded and toppled dictator Saddam Hussein.

There are important differences between the countries: Afghanistan is the world's biggest producer of opium and its production and trafficking has empowered warlords, who ignore the laws and policies of the central government in Kabul. Afghanistan does not have the rich oil reserves that Iraq will one day use as the basis for its future growth.

These should be matters of concern for governments that have made promises that they have not kept. The world has to re-engage with Afghanistan in a concerted manner. An international conference must be held with all major powers attending to again assess the nation's needs and to offer fresh help. Thousands more troops are needed to ensure security.

These are matters of urgency given the difficulties and challenges Afghans face. And this time, the promises must be genuine and forthcoming.



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Wednesday, November 15, 2006

THE RED LANTERN
Hugging the profit motive


DAVID EIMER
   
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   Love is in the air on the mainland. The recent Forum on China-Africa Co-operation saw the government lay out the red carpet for delegations from 48 African countries. Billboards, flags and flowers sprung up all across the capital, while the media published endless stories on African culture. Some serious business was done, as well: trade agreements worth US$1.9 billion were signed.
The government's new-found love for Africa and its resources stands in stark contrast to the reaction of the Public Security Bureau to a trend from overseas aimed at bringing Chinese people closer together. In recent weeks, a movement called "The Hug League", or Bao Bao Tuan, has taken to the streets of the mainland's major cities, offering free hugs to any passers-by who fancy one.


The idea behind the campaign is to break down barriers between people in an age when the nature of urban life encourages increasing alienation. "We simply want to bring warmth to people's hearts," one of the organisers told mainland media. So far, The Hug League has taken its message to the streets of Beijing, Changsha , Guangzhou, Hangzhou , Shanghai and Xian . But the police in most of these cities have been far from friendly. In Beijing, four huggers were taken in for questioning. Shanghai, supposedly the most westernised city in the mainland, was even less welcoming. Twenty minutes after the huggers arrived on Nanjing Road, 11 were in the local Public Security Bureau office. Public hugging wasn't "right", the director told them.

Nor have the huggers found much support from ordinary citizens. "Embracing is a foreign tradition," said one man in Xian. Online commentators were just as negative. "Hugging strangers is completely unacceptable to me", wrote one.

This is odd, given that on Valentine's Day, in February, shopping malls across Beijing staged kissing contests. There was no shortage of young couples willing to take part - despite the crowds that gathered to watch and the many press photographers snapping away. Nor did the police arrest anyone for snogging in public.

That might be because there was a commercial point to the kissing contests: the malls organised them as stunts to suck in more shoppers on a day when sales of chocolates, flowers and jewellery traditionally boom. But no-one accused the Valentine's Day kissers of acting in an un-Chinese fashion.

On the contrary, a recent online survey by Tencent, China's biggest online chat-service provider, found that Valentine's Day is now the third most popular holiday for young people - after the Lunar New Year and their own birthdays. In fourth place came Christmas. Halloween, too, has become popular: all the major web portals in the mainland offer e-greeting Halloween cards on their home pages.

Some commentators claim that the Cultural Revolution's attack on traditional Chinese culture allowed western festivals to gain a foothold on the mainland. But a more plausible reason for their rise in popularity is China's embrace of consumerism: western festivals offer more opportunities for people to spend money in shops.

The adoption of western festivals, and China's embrace of Africa, both show that outside influences are welcome on the mainland - even if they clash with traditional Chinese ideas - as long as they have a commercial purpose. The free huggers could learn from that. For their campaign to really take off, they must drop the "free" bit.

David Eimer is a Beijing-based journalist.


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Thursday, November 16, 2006

CHINA'S MONETARY POLICY
A big stride towards independence


MARVIN GOODFRIEND and ESWAR PRASAD
   
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   China's remarkable growth has been financed recently by a rapid expansion of money and bank credit, which is producing an increasingly unsustainable investment boom. This renews concerns that the country may not be able to avert a replay of the painful boom-and-bust cycle like the one it endured in the mid-1990s.
Monetary policy is usually the first line of defence in such situations. But Beijing's monetary policy has been hamstrung by the tightly managed exchange-rate regime. This regime prevents the central bank, the People's Bank of China, from taking appropriate policy decisions to manage domestic demand. That's because interest-rate hikes could encourage capital inflows and put further pressure on the exchange rate.


There is a vigorous, continuing debate about Beijing's exchange-rate policy. China's rising trade surplus has led some observers to call for a revaluation of the yuan, to correct what they see as an unfair competitive advantage that Beijing maintains in international markets. Others argue that the stable exchange rate fosters macroeconomic stability in China. But this debate misses the point.

What China really needs is a truly independent monetary policy oriented to domestic objectives. That would enable the central bank to manage domestic demand by allowing interest rates to rise in order to rein in credit growth and deter reckless investment. An independent monetary policy requires a flexible exchange rate, not a revaluation. But what could take the place of the stable exchange rate as an anchor for monetary policy and for tying down inflation expectations?

We recommend a low inflation objective as the anchor for monetary policy in the mainland. Theoretical research, and the practical experiences of many countries, show that focusing on price stability is the best way for monetary policy to achieve the broader objectives in the central bank's charter - macroeconomic and financial stability, high employment growth and so forth.

How could such a framework be operated effectively in an economy in which financial-sector problems have weakened the mechanism of monetary transmission?

This is a key concern because, despite recent reforms, the banking system remains fragile.

Nevertheless, we believe that a minimal set of financial-sector reforms - essentially, making bank balance sheets strong enough to withstand substantial interest-rate policy actions - should be sufficient.

Full modernisation of the financial sector is a long way off, even in the best of circumstances. But the minimal reforms that we recommend could strengthen the banking system sufficiently in the near term to support a more flexible exchange rate anchored by an inflation objective. Indeed, price stability - and the broader macroeconomic stability emanating from it - would provide a good foundation for pushing forward with other financial-sector reforms.


There is some risk that the appreciation of the exchange rate - if greater flexibility were allowed - could precipitate deflation. What this really highlights, however, is the importance of framing the debate about exchange-rate flexibility in a broader context.

Having an independent monetary policy that could counteract boom-and-bust cycles would be the best way for China to deal with such risks.

There are those who regard the discussion of an alternative monetary framework as premature. But there are good reasons, however, for China to begin right now to build the institutional foundation for the transition to an independent monetary policy.

Indeed, the early adoption of a low-inflation objective would help secure the monetary and financial stability that China needs as it allows greater exchange-rate flexibility.

Marvin Goodfriend is a professor at Carnegie-Mellon University. Eswar Prasad is financial studies chief in the IMF's research department. Copyright: Project Syndicate



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Friday, November 17, 2006

PETER KAMMERER
Say it in Putonghua



   
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   Putonghua is one of mainland China's big-growth exports. Beijing-backed Confucius Institutes, which teach the language, are cropping up by the score in a seemingly relentless linguistic march around the globe. Some may see this as a new form of imperialism - a central government plot to impart ideology - or merely as a passing fad. I prefer to think of it in terms of joint-venture opportunism.
My theory is simple, and uncluttered by dark mutterings of backroom schemes: where there is a buck, people tend to go for it. And there are certainly big bucks to be made from teaching languages, especially ones like Putonghua, which people think will advance their careers.


It was reported this week that there are now 120 Confucius Institutes in 50 countries on five continents, and a further 40 in the pipeline. Conspiracy theorists may see this as less a matter of learning than indoctrinating.

The institutes are set up jointly by the government's Office of Chinese Language Council International and foreign partners. Suspicions were doubtless confirmed when the office's director-general, Zhao Guocheng , noted that students not only learned Putonghua, but were likely to have their "misconceptions about the country" dispelled.

For conspiracy theorists, such remarks are proof that Putonghua teachers are using language as a vehicle to send out pro-communist, anti-western ideology. British academic Robert Phillipson took on board some of this thinking in his influential 1992 book Linguistic Imperialism, which expounds the theory that English has achieved dominance through a series of complex hegemonic processes.

With the British Council leading the charge, he asserts, English has been promoted as being God-given, interesting and a gateway to the world - which makes it widespread and therefore easier to learn. Other arguments are that English represents modernity, is the universal language of business and symbolises efficiency.

The Confucius Institute would seem to have a battle on its hands to compete with these perceptions - since English has had centuries of lead time. The rush to learn Putonghua would need to be more hectic and sustained to achieve dominance any time soon.

There is, after all, another truth. While an estimated 100 million around the world are taking Putonghua classes, six times as many mainland Chinese are learning English. This was pointed out yesterday by psycholinguistics expert Niu Qiang: for the past 20 years, she said, English has been compulsory for all students at the primary, middle, senior and college levels.

There are apparently 1 million native Chinese teachers of English on the mainland, 150,000 foreigners teaching the language legally and another 100,000 doing so without a permit. The publishing industry based around teaching English as a foreign language had gross revenues of almost US$2 billion last year.

I do not hear complaints from Beijing that learning English is bad because western dogma comes along with the linguistic package. In fact, it's quite the opposite: China's economic boom presents salient opportunities.

"To get a good job in a big company brings a big salary and high social status," said Dr Niu from her office in Chongqing . "While it's presently fashionable for young people to take English to learn about another culture, there is another, more important, reason: the financial aspect."

Her colleague Martin Wolff takes the English-versus-Putonghua debate a step further, wondering whether the world's estimated 420 million native English speakers stand much of a chance against China's 1.3 billion Putonghua speakers. He and Dr Niu have a theory of their own. "We predict an eventual regional English in China that will become the new global language of international communication," he said.

My experience with English on the mainland has not been good, and Dr Niu admitted that standards were not always the best. I'm not sure how comprehensible this form of English - with Chinese characteristics - will be.

Peter Kammerer is the Post's foreign editor.

peter.kamm@scmp.com



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A nice collection and good effort!  

Monday, November 20, 2006

ENERGY TAX PROPOSAL
Fiddling while Hong Kong pollutes


PHILIP BOWRING
   
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   In January, before the budget, before the publication of the government's goods and services tax proposal, I proposed in this column the adoption of an energy tax. It would broaden the tax base, be easy to implement, be fair to all consumers and economically neutral.
It could also help the environment by cutting greenhouse-gas emissions.


Since that time, the argument for such a tax has increased dramatically. The GST proposal has been so strongly criticised by almost every political party that it is effectively dead. And now concern about climate change has moved to centre stage among global issues. It is likely to be with us a lot longer.

The mainland is increasingly focused on the damage to the health of its people being caused by air and water pollution. If for no other reason, Beijing is likely to agree to play a much larger future role in controlling emissions, and the search for low-cost alternatives to fossil fuels.

I am not suggesting that an energy tax would have a major impact on energy consumption in Hong Kong. But it would be a small contribution to the wider global issue and send a message that Hong Kong wanted to move from laggard to leader.

One may argue that Hong Kong does not need new taxes because it is flush with other revenue, including revived land sales. That is not the point. Such a tax would obviate the alleged need for a GST to broaden the tax base. It would produce a reliable revenue stream which could, depending on other circumstances, be used to finance cuts in other taxes or increase spending on the aged.

A 30 per cent tax on electricity and gas usage would raise some HK$15 billion a year, or the same as a 3 per cent GST. About 25 per cent would fall on households, where energy spending is roughly proportionate to household income.

Most of the burden would be borne by the commercial sector which, in summer, tends to overdo the air conditioning in offices, malls and hotels.

The impact on prices would be reduced if the energy tax were phased in with a new scheme of control for power companies - one that reduces their allowable rate of return on capital from 15 per cent to the (still very generous) 10 per cent or so likely to be set when the current scheme ends in 2008.

Unfortunately, it is difficult to be optimistic. I have been unable to elicit any contrary arguments about an energy tax from the government. It stays quiet, parroting its continued belief in the merits of a GST, and unable to consider alternatives to what is clearly a failed proposal.

Hong Kong's overpaid bureaucrats have never shown much ability for original or lateral thinking. The problems this creates are compounded by the way that ministers, such as Secretary for Environment, Transport and Works Sarah Liao Sau-tung, appear to be the glove-puppets of vested commercial interests.

What chance is there for an energy tax when Dr Liao makes so little effort to address pollution issues - other than with words and promises - as we lag far behind many other Asian cities in reducing urban pollution. Only last week she was quoted as warning that emission controls could endanger energy security and raise power costs.

In a classic bit of bureaucracy-speak which doubtless pleased business interests, Dr Liao said it would take two years to compile information and a plan on greenhouse-gas emissions. "We have to make an assessment first", she said. As though it isn't plainly obvious what is happening here, and what could be done if the government could be bothered to force spending on cleaner sources.

If you want to be a leader, chief executive, it is well past time to be serious about the top global and local issue. A first step: sack Dr Liao.

Philip Bowring is a Hong Kong-based journalist and commentator.



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Tuesday, November 21, 2006

EDITORIAL/LEADER
Good start, but more must be done on rights



  
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   A senior official of the Supreme People's Procuratorate has confirmed what everyone has long believed - torture is widespread on the mainland.
The revelation by deputy procurator-general Wang Zhenchuan that many of those wrongfully convicted had been tortured has lent credence to the findings of an investigation by the United Nations' special rapporteur on torture, Manfred Nowak. When the report was released in March, the Ministry of Public Security denied "inappropriate" means were used to make suspects talk.


China has been a signatory to the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment since 1986. Yet, law enforcement officers using inhuman ways of extracting confessions from suspects has remained a serious issue. Mr Nowak rightly noted in his report that a number of systemic factors contributed to the practice of torture on the mainland - rules of evidence that create incentives for interrogators to obtain confessions, excessive length of time that criminal suspects are held in police custody without judicial control, absence of a legal culture based on the presumption of innocence (including the right to remain silent), and restricted rights and access of defence counsel.

Mr Wang's statement at a conference on combating illegal interrogation and wrongful conviction was the clearest admission so far that torture was indeed a problem. It was also a welcome sign that the procuratorate would be making a serious effort to address it. Under the mainland's judicial system, a major function of the procuratorate is to supervise the work of public security and to decide whether to press charges against suspects. For too long, however, guided by the mistaken view that it is their duty to protect the interests of the state, prosecutors have tended to side with public security. That has led them to turn a blind eye to the use of improper methods to extract confessions from suspects.

The procuratorate's vow to give due respect to the rights of suspects marks a long overdue change of emphasis. It is also a step that is in line with the leadership's policy of fostering a harmonious society. Among the measures the procuratorate has taken to check abuse is requiring the videotaping of interrogations in major cases - a move pioneered by Hong Kong's Independent Commission Against Corruption. That is a good start. But more will have to be done to address problems highlighted by Mr Nowak, so that the rights of all suspects, not just those allegedly involved in major crimes, are protected.

That would be a difficult undertaking, as the mainland's legal and judicial systems remain underdeveloped. The saying "leniency to those who confess and severity to those who refuse to" is one that continues to hold sway in the mindsets of many law enforcement agents. To check the tendency to prosecute and convict at all costs, it would not be enough for prosecutors to apply tougher standards in supervising the work of public security. All officers of the law would need to be trained to appreciate that respect for due process of the law is just as important as achieving justice. They would also need to be taught to enhance their investigation techniques, relying more on objective evidence than confessions.

Even if all the agents are well-trained, the possibility remains of over-zealous officers taking the law into their own hands and using extra-legal means to force suspects to "come clean". Proper procedures would also need to be put in place to check against abuse, both from within and outside the law-enforcement agencies. Allowing a free and investigative press to expose wrongful acts would help, as would the establishment of citizen-based independent human rights organisations. A system of allowing impartial monitors to visit detention centres, similar to Hong Kong's practice of allowing justices of the peace to tour prisons and hear detainees' complaints in private, would go a long way towards protecting inmates' rights.


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Wednesday, November 22, 2006

THE CASINO RESORT SCHEME
A sure-fire winner for Hong Kong


JAMES TIEN
   
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It would be a safe bet to say that the debate in the Legislative Council today about the possibility of opening a casino resort in Hong Kong is likely to be extremely lively.
By proposing that we look into the possibility of a resort and casino complex on Lantau Island, the Liberal Party is challenging two fixed ideas in Hong Kong's mentality.

The first of these is that we should leave casinos to Macau, and that it would be wrong to compete with our neighbour for the gambling dollar.

The second is that, by opening casinos, we will corrupt young people and create more problem-gamblers.

So why are we courting unpopularity by making this proposal? We are doing it because we strongly believe it is for the good of Hong Kong, and because we believe that our city is capable of creating an upmarket casino resort that will pay guaranteed dividends.

We also strongly believe that, by shutting our ears to the idea of casinos, Hong Kong risks being left behind by regional competitors and losing out on a potentially rich stream of tourism, job creation and tax income.

The problem with fixed ideas is that they are inflexible and impervious to changing circumstances. Many people have a concept of casinos that appears to be rooted in the past, when Macau's gambling establishments were seen as disreputable haunts of loan sharks and triad gangsters.

Anyone who still thinks that way should visit Macau today, and see how its sophisticated new casinos have transformed the city into the Las Vegas of the east - generating huge growth in tourism and tax revenue.

So far this year, visitor numbers are up at least 15 per cent; casino revenue for the first nine months of the year was HK$38.56 billion - more than on the famous Las Vegas Strip. Macau has already begun to "out-Vegas" Vegas itself. Hong Kong will not, and should not, be a rival to Macau.

Even if we decide to go ahead with a casino resort, it would be eight to 10 years before the place opened. By then, Macau can expect to be firmly established as the world's No1 gambling destination.

We are not jealous of Macau's success: we applaud it. Neither would we seek to mimic it. Instead, we want to offer a distinctly Hong Kong alternative that could bring us benefits of our own.

Ominously, rival tourism destinations around the region are waking up to the lesson of Macau, and preparing to open casino destinations of their own. South Korea, the Philippines, Malaysia, Vietnam, Cambodia and Australia already have them. Singapore will open two in 2009. Japan, Taiwan and Thailand are looking into setting them up.

There are legitimate concerns about the impact of casinos and the problem-gamblers it might create. I do not, however, accept that a well-run casino resort will present the social danger that some people suggest. Hongkongers should be trusted to act sensibly, even if the casino might be seen by some as a temptation to the weak-willing to gamble beyond their means.

After all, why should we have less trust in the people of Hong Kong than those other Asian governments have in their own people?

You may remember a similar controversy over the introduction of soccer betting three years ago. Yet its arrival passed without incident. A casino resort would have even less social impact.


A casino and hotel resort on Lantau could create 20,000 new jobs in the low-skilled area - where our employment shortage is most acute - and create a niche for Hong Kong in an expanding global market for gaming.

Macau shows what can be achieved in a relatively short period of time. Its unemployment rate is down to 3.8 per cent, and the government has been able to announce ambitious plans to extend free education and to give more allowances to students.

Macau's budget for next year has been increased to 30.8 billion patacas, up 22.1 per cent on this year. Its social security spending is to be doubled to a record 5.1 billion patacas.

New infrastructure investments are being launched, such as a 4.2-billion-patata elevated railway due to be completed within four years. Medical facilities are being improved in hospitals and surgeries across the city.

Macau Chief Executive Edmund Ho Hau-wah has also announced plans to build 4,000 social housing units over the next three years, to cut stamp duty and to increase the pay of people working in the public sector.

All the while, Macau's citizens are enjoying further tax cuts. Salary tax is being cut by 25 per cent and a business tax exemption is to be extended - all thanks to the huge sums generated by revolutionising the city's gaming industry.

At a time when our government is struggling with a narrow tax base and considering a hugely unpopular goods and service tax to broaden it, can we really afford not to even consider such a venture?

The motion before legislators today is for a feasibility study into such a development. If we ignore the economic realities of what is happening in Macau and the region, I believe we will be taking a rash and unnecessary gamble with Hong Kong's economic future.

James Tien Pei-chun is chairman of the Liberal Party.



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Thursday, November 23, 2006

EDITORIAL/LEADER
African nations point the way for China in Aids fight



   
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   Smallpox is one of the few scourges of humanity to have been eradicated. Others not only remain, but at times are rolling back the achievements of medical science. Tuberculosis and malaria, for example, have thrown up a new challenge with resistance to the drugs used to fight them.
The emergence of resistance to antibiotic drugs has assumed epidemic proportions, highlighted by the fact people are being infected with bacterial "superbugs" in the general community rather than in hospitals, the usual breeding ground.


How much more concern should there be, then, about a deadly modern pandemic for which science is still to find a cure or vaccine and which is staging a resurgence in some countries that were thought to have contained it?

The disease in question is, of course, HIV/Aids. Reports that the pandemic is growing in all areas of the world, and that recorded cases in the mainland have risen nearly 30 per cent so far this year, are cause for grave concern. After all, HIV/Aids is a disease of unprotected sex, shared drug needles and tainted blood. Education and prevention therefore save lives and, theoretically, could eradicate new infections. But they are failing even to stem the growth of the disease.

Asia generally and the mainland in particular have become a focus of concern. Culturally driven antipathy towards homosexuals and drug abusers prevailed over the early opportunity to combat the threat with serious attempts at education. As a result, the virus has spread into the general population as young Asians embrace more liberal moral values. Southeast Asia now accounts for the highest number of new infections through a combination of risky sex practices and injected drug use. That scenario is magnified on the mainland. The United Nations agency UNAids says the drug-fuelled epidemic has reached worrisome levels, despite efforts by top state leaders to remove the social stigma of the disease and increased spending on prevention programmes.


Until scientists find a vaccine or a cure, there are no new answers or short cuts to dealing with HIV/Aids on the mainland. There is just education and prevention, but on a scale commensurate with the problem. An effective national programme will require a massive budget increase. But that should not be too much of a problem for an economic juggernaut that produces a big enough trade surplus to finance a large chunk of America's profligate borrowing.

There is a ray of hope in the fight against HIV/Aids. It is to be found in Africa, where efforts to halt the frightening spread of the disease among heterosexuals have focused on education and prevention. From 2000 to last year, UN officials say, the prevalence of HIV declined among young people in eight African countries.

That is a textbook goal that China should aim at.


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Friday, November 24, 2006

EDITORIAL/LEADER
Public schools must be publicly accountable



  
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   The Court of First Instance has, sensibly, ruled against the Catholic Church's contention that a government initiative to enhance the governance of aided schools is unlawful. While the church's initial response yesterday was mild, it has not ruled out launching an appeal. Looking back, perhaps officials underestimated the sensitivity of the church towards school-based management reform. But it is difficult to see how they could have done more to pacify opponents.
Under the reform, all publicly funded schools are required to set up a statutory board, 40 per cent of whose members must be elected representatives of parents, teachers and alumni. This moderate measure to enhance democracy was aimed at enhancing the accountability of schools' management. It is hardly revolutionary, as the sponsoring body still retains majority control of the school board and there are provisions preventing the board changing the school's mission.


The reform is aimed at raising the transparency of schools' management as they are given greater discretion to manage public funds. That it has emerged as a concern in post-colonial Hong Kong has to do with latent fears that the government, now under the aegis of a communist sovereign, might be moving to suppress the churches' propagation of their faiths.

A peculiar feature of Hong Kong's public school system is that the government runs only a small number of schools directly and relies on non-governmental organisations to operate most. As a former British colony, this city has a preponderance of religious organisations running schools. The Catholic Church and its congregations are among the biggest school sponsoring bodies, running 221 aided primary and secondary schools out of a total of 935.

Under the leadership of Cardinal Joseph Zen Ze-kiun, the Catholic Church saw the reform as a government conspiracy to undermine the church's total control of its schools. A vocal champion of a fully democratic political system, Cardinal Zen enlisted the support of the pro-democracy camp of legislators to oppose the legislation. Having failed to stop its passage, the church launched a judicial review that led to yesterday's judgment.

Among other things, the church argued that the school-based management reform ran contrary to the Basic Law, as it constituted a major change to the "previous educational system" in place before 1997 and was a dilution of the church's autonomy in running its schools. Mr Justice Andrew Cheung Kui-ning has, rightly, rejected these arguments.

If they were valid, it would have meant that a government or legislature which had freedom to change the way religious organisations ran aided schools before July 1, 1997 were deprived of that freedom after that date. This clearly would not be right. Nor can the autonomy of publicly funded schools be absolute, as that would allow them to block legitimate moves by the government to hold schools' management accountable.

State interference in the freedom of religious belief and the internal affairs of religious organisations is a potential threat against which any society must guard. Yet it would be wrong for religious bodies to cite that right to oppose legitimate and narrowly defined efforts by the government to regulate parts of their operations that are publicly funded.

Elsewhere, Hong Kong's practice of using public money to fund faith-based schools would be considered as improper for breaching the church-state divide. That has not become an issue here, as these schools are already well-established and highly regarded for the high-quality education they offer.

It would not be in the interests of religious organisations to invite far more scrutiny than they really want by opposing a moderate measure to enhance public monitoring of schools that are funded by taxpayers' money. After all, the religious bodies have the option of ensuring total control by pulling their schools out of the public system and going private.


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