by Koo Lap
When Carrie Lam led her team of secretaries and Executive Council members to get vaccinated with the China-made vaccines, Paul Chan Mo-po, the Financial Secretary, was absent from the lineup. He claimed to be busy preparing the budget, which is to be delivered two days after so that he could not be one of the guinea pigs, as called by the LegCo (Legislative Council) President Andrew Leung, but said he would get vaccinated next week. By then, BioNTech, the vaccines jointly developed by the U.S. and Germany, should have been arrived, and Chan may not have to demonstrate his patriotism by getting the China-made vaccine. What he cannot escape from is admitting the so-called budget is just a farce. He has no means to take Hongkongers out of these economic difficulties.
The severity of the difficulties can be reflected by the GDP, which drastically plunged 6.1% during the year, and the unemployment rate derived from it: 7%. These high numbers have been unseen since SARS. In such a dire situation, Chan was still in the mood to put on an all-white chef attire to film the promotional video, playing the role of “Chef Ah Mo,” mumbling, “six eggs, two teaspoons of sugar, a little bit of orange peel…” The video implied preparing for the budget is like baking a cake – the chef needs to consult the customers to bake a cake that pleases their taste. Things are getting desperate, and the citizens’ demand is clear: give us some money back! The Civic Party has even named the price: HK$20,000 (US$2,600). But Chan has already dashed our hopes before the budget announcement by saying there will not be any money giveaway. The so-called consulting citizens’ opinion was just words and fake democracy. He did not mean it at all.
Even if Chan genuinely wanted to hear the opinion, he might not be able to do much with the current government structure. He is just a teller under Carrie Lam’s ruling. Ah Mo might be allowed to bake a small cake, but to cook a Christmas feast? No way. In the last financial year, the recurrent expenditure has been estimated to be about HK$480 billion (US$62 billion). But Lam decided to reserve HK$300 billion (US$39 billion) as the anti-epidemic fund. That is more than 60% of the recurrent expenditure!
The fund benefits the working population, but much more money could have gone into the CuMask, mandatory virus testing, the OT paying to the police officers in the “ambush-style lockdown” teams...The new budget has reserved money to develop camping BBQ areas in country parks. There is even HK$300 million (US$39 million) to improve football facilities. But compared to the HK$8 billion (US$ 0.1 billion) that was given to Ocean Park to help with its deficits, the room for Chan to get creative is nothing.
But Chan is not that gullible. He warned that the budget deficit would reach a record sum of HK$300 billion, the exact amount Lam reserved for the anti-epidemic fund. It is obvious whom he is pointing the finger at, and the message is clear. If “someone” did not squander the money, the government would not have burned a third of the trillion-dollar fiscal reserves the government spent years accumulating in one go, even if the budget was unbalanced. Oh well, unfortunately for Chan, he is only the teller who looks after the account’s income and expenditure, not the one with real power who can control the finance policy.
But with Chan’s knowledge and intelligence, he might not know what to do even if he has the power. What effective solution has he got to get Hongkongers out of these unprecedented economic difficulties? “Face it with optimism,” “don’t bite more than you can chew.” What he meant is, spend less with a smile. Who can smile nowadays under this regime except Chan? He is advising us to spend less. But on the other hand, he reminded Hongkongers the government has to “maintain a counter-cyclical policy,” which is continuing the deficit budget and squandering public money. Double standard much?
But a fiscal deficit is not the only challenge Hongkongers are facing. What more desperate is, the implementation of the national security law has triggered sanctioning actions from Europe and the U.S. It has destroyed the century-old foundation of Common Law. As a result, both investments and talents are going elsewhere. Hong Kong will lose its status as the international financial center in the long run. Chan said, “use the momentum and push Hong Kong’s economic structure up a level.” The government has allocated money to provide nearly 10,000 university graduates and young people with technology and finance job training. But with a rotten system and dreary future, what talent would want to stay?
Also, the economy of Europe and the U.S. is gradually reviving with the help of vaccines. Therefore inflation is warming up, and the U.S. interest is looking to increase. Due to the linked exchange rate mechanism, Hong Kong has no choice but to follow. In addition to the pressure from capital outflow, the interest rate might increase more than one could imagine. How badly hit will the housing market and even the financial system? What can the finance top guns do to prevent disaster from happening? It might be too big of a challenge for Ah Mo, who only knows to mumble “don’t bite more than you can chew” or “six eggs, two teaspoons of sugar.” Hongkongers, it is every man for himself now.
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