There are many parallels between Hong Kong and Singapore. Both tout themselves as “Asia’s world city”, and both have a rightful claim to the crown – hubs of commerce and finance, both with economies based on the provision of services, as opposed to agriculture or manufacturing.
However, Singapore edges Hong Kong out in one key area – its fiscal planning. Singapore’s fiscal planning, facilitated by the HK$1.7 trillion Central Provident Fund, is a world-class example of creative and efficient planning from a maturing government. Hong Kong’s government are unnecessarily frugal – even pessimistic projections estimate that Hong Kong’s reserves of almost HK$900 billion will be nowhere close to exhausted by 2047, when we rejoin our neighbours further inland.
Currently, Hong Kong is operating on a surplus – meaning that we export more than we import. This trend is forecast to continue until sometime in the next decade, at which time we will gradually slip to a deficit. This is nothing to worry about, however – most countries operate on a deficit, and many of those countries operate sustainably, efficiently, and prosperously despite this. There’s no reason Hong Kong should be different.
It makes no sense to hoard our reserves for some future catastrophe. If the catastrophe was economic, then our reserves would be rendered worthless. Instead, the government should allocate the money towards planning for the future.
Now, what could we spend HK$900 billion on? Even a small portion of that (HK$200 billion) would be enough to fund significant development in several areas. Hong Kong needs to capitalise on its reputation as a world finance hub. The fund could be used to start a training academy that would equip marketing, analytics, and management hopefuls with the skills they need to make an impact in the workforce.
Another possible area of investment could be social rehabilitation and spending – whether it’s integration programmes for ethnic minorities, mental health checks for our students, who are under more pressure to succeed than ever, or more services for the elderly, social spending could drastically improve the quality of life in Hong Kong. Or, of course, Hong Kong, a city with one of the highest rates of inequality in the world, could invest in poverty alleviation.
Regardless of what they spend on, the government needs to be more optimistic and imaginative about Hong Kong’s future, and the first step towards realising that optimistic vision is creating a plan.