Three policy steps that can help Carrie Lam as chief executive heal a divided Hong Kong

Raymond Yiu and Paul Yip say channelling public spending to help create a knowledge-based society, along with a stable policy environment and respect for public opinion, would help the new administration usher in a better future

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Chief Executive Leung Chun-ying officiates at the reception for the 19th anniversary of the establishment of the Hong Kong SAR last year, along with his predecessors Tung Chee-hwa (second left) and Donald Tsang (second right), and now chief executive-elect, Carrie Lam. Joining the toast is the liaison office director, Zhang Xiaoming (far left). Photo: Dickson Lee

Published: 2:45pm, 28 Jun 2017Updated: 6:27pm, 28 Jun 2017

As the Hong Kong SAR marks the 20th anniversary of its founding, it is hoped that Carrie Lam Cheng Yuet-ngor, who takes over as chief executive on July 1, can heed the aspirations of the people and heal the social divide.

In his foreword to the book Feeling the stones: Reminiscences, by David Akers-Jones, former Hong Kong governor Lord Wilson wrote: “Allowing vigour, determination and the urge to better one’s lot to take a productive course is a key attribute of good government.” In the past 20 years, how effective have our government policies been in empowering the people?

Inheriting the colonial legacy, Hong Kong adopted the approach of a “limited government”, with conservative goals on the economy and efficiency. In the last 12 budgets of the colonial government, the ratio of public expenditure to GDP was 15.7 per cent. After the handover, the ratio was 20.1 per cent under Tung Chee-hwa and Leung Chun-ying, and 18.1 per cent under Donald Tsang Yam-kuen. Although more money was spent in the post-handover era, less satisfaction was to be found in the community.

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Social welfare and health were among the top priorities of the three chief executives since 1997. Education received relatively more resources during the terms of Tung and Tsang, while Leung invested more in infrastructure. Public resources allocation reflects policy priorities. At the same time, any effective government has to nurture and build self-reliance. To cope with future challenges, we suggest the following.

First, investing in policy areas that would foster a transformation to a knowledge-based society. The ratio of public spending on education and R&D to GDP should be increased from the current 4 per cent to match that of mainland China in recent years, that is, 6 per cent.

Who benefits from the HK$5 billion pledged by Carrie Lam for Hong Kong’s education sector?

With a shrinking workforce, productivity must be increased to sustain current living standards. Public investment in education and R&D could stimulate the private sector and benefit all of society. Its ratio to GDP on the mainland has risen from 2.9 per cent in 1995 to 6 per cent today.