Potential competitiveness leader not good enough

Ho Lok-sang says being in a plum position is a good start but we must work together to extract value from situation

Swiss business school IMD gave Hong Kong a thumbs-up in its global competitiveness index for the second year in a row. Hong Kong was again rated the world's most-competitive economy for this year. This is great news but does not quite align with the results in other competitiveness reports, and somehow does not seem real to many of us who live in Hong Kong and have first-hand knowledge about what is happening here.

First, the World Economic Forum last year reported that Hong Kong's competitiveness ranking in 2016-17 had actually fallen two places, from seventh to ninth. Our scores according to its metrics actually did rise slightly but because other economies had scores rising faster than ours, we lost two places. This suggests competitiveness is really tough and one has to keep working just to keep one's place in the ranking. IMD honored us with the highest rating in government efficiency and business efficiency. But with the frequent filibustering in the Legislative Council, the government has had a lot of difficulty launching any new initiative. The snail's pace development of the West Kowloon Cultural District and Kai Tak area also suggest our government may not be as efficient as we wish.

The IMD report, however, is not entirely wrong. We do have great infrastructure - a wonderful airport, great road and railway networks and cheap broadband connections. Our public transport system is probably the world's most efficient. Our rule of law index is among the world's best. We have the world's highest concentration of professionals - lawyers, certified accountants, chartered financial analysts, arbitrators, engineers, surveyors and business consultants. We have a very efficient civil service. We have a well-educated and highly motivated labor force. We are the world's most open and the world's freest economy. Our entrepreneurs are very sensitive to the market and will respond rapidly to changes in consumer tastes and technology. We have great universities. We have great country parks and city amenities. Above all, we have the world's most enviable geographic location, having a fantastic port and at the door of the fastest-growing and most massive economy of the world. I have little doubt that, in terms of potential competitiveness, we are tops.

However, just having the highest potential competitiveness is not good enough. We need to realize the potential by capitalizing on what we already have. And apparently we lack the mindset to reap what we have. In the old days, we used to work together to overcome difficulties. These days we seem to be too preoccupied with ideological issues and the perceived wrongs of others to be able to work together to solve problems.

The IMD praised our government efficiency. Our government is indeed very efficient when it comes to renewing car licenses, registering a new company, taking goods through customs and passing through immigration at the airport or border, public library services etc. However, it takes forever to convert land use from farmland to residential land; and many schools that were abandoned because of falling student numbers have been left in the limbo. The government has fallen behind in public hospital, elderly care services and home care for handicapped people. Some of these problems have to do with the requirements for due process; some have to do with an excessive concern about controlling public spending; some have to do with a failure to reach consensus among different interest groups.

Some people would like to put the blame on the influx of new immigrants for our housing problems. But this is really wide of the mark. We used to have much bigger inflows of immigrants and had no problem assimilating them into Hong Kong society to our advantage. In the 1970s our population rose from less than 4 million to more than 5 million. But from 2001 to 2011 our population only increased 0.36 million. In the past five years our population rose 270,000, still a very moderate rate. Compared with the 1970s, we are much more affluent and should be in a better position to assimilate the modest increase in immigrants, who are mostly much better educated than before.

Thus, what is lacking is really the will to solve problems. To rebuild the culture of working together to tackle problems, we need to rebuild trust. Benjamin Hung, chief executive for Greater China and North Asia of Standard Chartered Bank, in an interview said that income disparity and housing problems were behind the internal strife that undermines Hong Kong's competitiveness. Tackling these problems effectively will help bring minds together. The launch of the Low-income Working Family Allowance, and that of a Youth Hostel Scheme to provide affordable housing for young people, are just the beginning. We should expand Home Ownership Scheme housing to build more affordable starter homes for young married couples. As we bring our minds together, we will also bring out our strengths and realize the potential to be the most competitive economy in the world.