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A City Mismanaged traces the collapse of good governance in Hong
Kong, explains its causes, and exposes the damaging impact on the
community’s quality of life. Leo Goodstadt argues that the current
well-being and future survival of Hong Kong have been threatened
by disastrous policy decisions made by chief executives and their
principal officials. Individual chapters look at the most shocking
examples of mismanagement: the government’s refusal to
implement the Basic Law in full; official reluctance to halt the large-
scale dilapidation of private sector homes into accommodation unfit
for habitation; and ministerial toleration of the rise of new slums.
Mismanagement of economic relations with Mainland China is shown
to have created severe business losses. Goodstadt’s riveting
investigations include extensive scandals in the post-secondary
education sector and how lives are at risk because of the inadequate
staff levels and limited funding allocated to key government
departments. This book offers a unique and very powerful account
of Hong Kong’s struggle to survive.
Leo F. Goodstadt is an honorary fellow of the University of Hong
Kong. He was head of the Hong Kong government’s Central Policy
Unit from 1989 to 1997 and previously served on eight government
statutory and advisory boards. His academic publications are
extensive, and he has four books published by Hong Kong University
Press since 2005.
‘Goodstadt demonstrates how the neglect of social rights in
managing the SAR has brought about serious consequences through
the discussion of housing, medical services, and education. A highly
readable title with a lot of interesting arguments for those who really
care about Hong Kong.’
—Lui Tai-lok, Department of Asian and Policy Studies,
Education University of Hong Kong
Leo F. Goodstadt
Also by Leo F. Goodstadt
Profits, Politics and Panics: Hong Kong’s Banks and the Making of a
Miracle Economy, 1935–1985
Preface
Introduction
1. The Basic Law: Rights denied
2. From public service to ministerial mismanagement
3. Private homes under threat
4. From squatter huts to ‘invisible’ slums
5. The missing land banks
6. Students at the market’s mercy
7. Lives at risk
8. Mismanaging the Mainland
Conclusion
Bibliography
Index
Preface
Acknowledgements
I am indebted to the Hong Kong Institute for the Humanities and
Social Sciences at the University of Hong Kong which has provided
me with generous use of its facilities. The Institute is the ideal
environment in which to do research, which enabled me to complete
this volume between October 2014 and June 2017. I owe a great
deal to the Director, Professor Angela Leung Ki Che. She has
provided the perfect environment for my research, and I am most
grateful to her for her unfailing encouragement and for her personal
interest and many kindnesses. I must also thank the Institute’s staff
for looking after me so patiently.
In the course of writing this book, I was fortunate enough to be
selected for a substantial award from the WYNG Foundation Ltd, for
which I am very grateful. I deeply appreciate the commitment which
the Foundation has shown to the needy and the vulnerable in Hong
Kong and to the pursuit of good governance. I am proud to have
been associated with it.
My research on the historical development of Hong Kong’s
housing programmes and its social services would have been
impossible without the assistance in past years of the Government
Records Service. The professionalism and efficiency of Mr Bernard
Hui Sung-tak and his colleagues in the Public Records Office enabled
me to create a collection of archival material which has facilitated my
work over many years.
I am, as always, indebted to Trinity College, University of Dublin.
I am especially grateful to Professor Lorna Carson, Director of the
Trinity Centre for Asian Studies, for many kindnesses and shared
enthusiasms. Colleagues at the School of Business Studies, in
particular my friend, Professor Gerard McHugh, continue to support
me with interest and encouragement, as well as access to Trinity’s
facilities, throughout my stay in Ireland.
It is a special pleasure to express my sincere thanks to Dr Susie
Han Jia, of Hong Kong University Press. She has been an excellent
editor: very efficient as well as encouraging, highly professional and
always patient and pleasant.
None of the institutions or individuals referred to in these
acknowledgements has any responsibility for any part of the
contents of this book or the views which it expresses.
Hong Kong has been made all the more pleasant for me in the
twenty-first century by the kindness and hospitality which my friends
and former colleagues at the Central Policy Unit so generously offer
me. Among those I can acknowledge here with gratitude are Barry
Cheung, Helen Cheng, T. L. Tsim, Dr Rikkie Yeung, Professor Cecilia
Chan and their families who take such good care of me.
Hong Kong
January 2018
Introduction
On 1 July 1997, Tung Chee Hwa began his term as Hong Kong’s first
Chief Executive full of confidence about what lay ahead. His
optimism was justified, he explained, because of Hong Kong’s
remarkable achievements.
Hong Kong is at present the freest and the most vibrant economy in the
world. Free enterprise and free trade; prudent financial management
and low taxation; the rule of law, an executive-led government and an
efficient civil service have been a part of our tradition.
Tung’s lack of political talent had been obvious from the start. He
was a wealthy businessman and had much the same social attitudes
and political views as the rest of Hong Kong’s business leaders. In
particular, he shared their conviction that the public sector is
inherently inferior in management and performance to business
enterprises. In 1998, he confessed to feeling confused. ‘As a
businessman one has to be very bottom-line oriented,’ he said, ‘So I
go into this office [of Chief Executive] very bottom-line oriented. And
I felt that if I deliver the bottom-line, never mind what happens in-
between’. It took him a year, he said, to realise that ‘in the political
life this does not work’—that ‘what happens in-between’ matters to
the community.12
By 2003, China’s leaders could tolerate his shortcomings no
longer. Tung Chee Hwa was a failure. He lacked the necessary skills.
He was just ‘an entrepreneur’ with no political experience, State
Councillor Tang Jiaxuan commented that year. Tung had done his
best in a job for which he was unsuited.13 Tang’s verdict was all the
more damaging because he was a former Foreign Minister with
ample experience of the Western-style administration which Hong
Kong followed.
Eventually, Tung’s credibility evaporated to a point at which he
felt compelled to make a last, desperate move to remain in office.
He went before the Legislative Council in 2005 and confessed that
‘shortcomings and inadequacies have undermined the credibility of
our policymaking capability and our ability to govern’.
In formulating policies, we fell short of “thinking what people think” and
“addressing people’s pressing needs”. Second, we were not sufficiently
mindful of the impact of some policies on the community’s capacity to
bear and the potentially controversial nature of these policies. We
introduced too many reform measures too hastily, putting heavy
burdens on our people. We also lacked a sense of crisis, political
sensitivity as well as the necessary experience and capability to cope
with political and economic changes. We were indecisive when dealing
with emergencies.14
It would have been easier for all of us, in the short run, to ease back
into another bubble economy. Instead we have embarked on another
[way] that will perhaps take longer, involve more hard work, and
certainly more learning; one that perhaps imparts more pain in the
short term as well, but is ultimately healthier.15
Not until the very the end of his presentation did he mention any
concrete problems to be solved. He then dealt with ‘important issues
that are of concern to the community’ in a mere eight words:
‘housing, bridging the wealth gap and elderly services’.28
In 2012, he followed Tung Che Hwa’s example when faced with a
total loss of credibility. Tsang made a pitiful self-criticism before the
Legislative Council. But even this humiliation won him no sympathy.
He tried to convince the public that his failings had been
unintentional. ‘My 45 years of experience in public service . . . has
created “blind spots” that make me overlook the fact that as times
change, public expectations have also changed’, he pleaded, ‘and
people have turned more demanding towards public officers’.29
In fact, these standards had not changed over the years. Zero
tolerance of questionable behaviour by senior officials had become
the norm after the 1974 revelations about corrupt senior police
officers, which had led to the establishment of the Independent
Commission Against Corruption (ICAC). Tsang failed to see that this
standard would apply to him. Just as he had failed to see that
allegations of unauthorised alterations to his own private property
would scandalise the community.30
Tsang had to pay a ruinous price for his misconceptions about
the privileges of those in power. A criminal investigation was
launched in 2012, but he was not brought to trial until 2017, a delay
which was inexcusable in a society as dedicated to the rule of law as
Hong Kong. He suffered considerable distress because of the
financial and emotional strain of this protracted waiting, together
with the total destruction of his private life by the media’s
unrelenting surveillance of his daily activities and contacts.
Nevertheless, his court trials were an important illustration of Hong
Kong’s core values. No one, not even the highest ranking and best
connected, can evade criminal investigation and prosecution.
This frank critique of the record of Tung and Tsang left him
vulnerable to criticism. He had held on to his senior position of
Convenor of Executive Council under both his predecessors as Chief
Executives instead of resigning in protest, and so he could not avoid
sharing responsibility for the serious mismanagement under the rule
of Tung and Tsang. Thus, he had come into office with limited
credibility.
But it was his performance which let him down most. He claimed,
as just quoted, that lack of ‘speed’ had crippled his predecessors.
But his own ‘speed’ proved worse than theirs in solving the
community’s most urgent problems. Furthermore, before his
appointment, he had said that there was no shortage of money. But
once in office, he allowed his Financial Secretary to predict financial
catastrophe unless spending on social services was reduced
immediately. This inconsistency showed little respect for the public’s
intelligence, for which there was a heavy price to pay.
Unlike Tung Chee Hwa and Donald Tsang, Leung did not make a
self-criticism in an effort to retrieve his reputation. Instead, in the
dying days of his term in office, he issued what amounted to a self-
indictment of his own performance although it was intended as a
proud roster of his achievements. This Report on the Work of the
Fourth-Term Government of the Hong Kong Special Administrative
Region June 2017 was intended ‘to summarise the progress and
achievements of our work’, he explained, but it provided compelling
evidence of what had gone wrong for him. Leung had made
numerous policy pledges since 2012 but relatively few long-term
policy commitments in terms of staff or funding. As a result, the
document was dominated by details of ‘consultations’, ‘pilot’
programmes and ‘trial’ measures. There were also signs of a
desperate search to find as many positive items to list as possible,
even when they were of limited interest to the public. The
presentation of the work report itself was confusing, which made its
contents difficult to use. The document was not the product of well-
run government or competent political leadership.
Of special interest to this book is the work report’s section on
housing. This had been among Leung’s highest priorities on taking
office but became one of his most embarrassing failures. His work
report reveals why no other outcome should have been expected.
His Housing Minister was also in charge of the transport sector. The
work report devoted three times the wordage to transport than it
allocated to Hong Kong’s housing crisis. This imbalance accurately
reflected the superior political and financial priority given by Leung’s
administration to transport issues.
The work report paid little attention to inadequate building
management and maintenance, which were major threats to homes
in the private sector. Measures to tackle this challenge were not
listed under ‘housing’ but buried in the ‘Culture, Leisure, Municipal
Services and Administration’ section.42 Leung also included among
his achievements ‘The Handbook on Tree Management’. Published in
2016, this booklet was intended ‘to further raise the awareness of
responsibility on tree management among private property owners
and property management companies’.43 At that date, the
government was still grappling with the introduction of a modern
system of property management. To include the care of trees in
built-up Hong Kong was an additional complication which could not
be justified as a contribution to safer homes. This was not good
administration.
By the end of Leung’s first term, his remaining credibility was in
tatters. He found it impossible to continue as Chief Executive, he
stated, because of the strain inflicted on his family. He had proved
even more vulnerable to the pressures of high office than Tung Chee
Hwa.
Rights denied
By 2002, Tung had taken into his owns hands total control over
government. The Chief Executive’s decisions were to be
implemented by political appointees: ‘ministers’ and their deputies.
Chapter 2 investigates how the introduction of this ‘Principal Officials
Accountability System’ (POAS) was warmly welcomed by senior civil
servant and applauded by most commentators and why its results
have proved very disappointing.
From the start, there was a powerful reason to doubt POAS’ likely
contribution to good government. It was always obvious that novice
political appointees would find it extremely difficult to provide a
higher quality of administration than civil servants had in the past.
This discouraging prospect had been made clear in the most explicit
terms.
Despite the popular game of bashing the civil service, practiced daily by
our media and politicians, our top civil servants still maintain a
comfortable lead in opinion polls over most politicians in the legislature.
And despite the poor rating for the Government as a whole since the
Asian financial crisis and the ensuing recession, a neat 32 per cent of
the public still perceived this administration as being responsive to the
will of the people, compared to the worldwide average of 10 per cent
and a corresponding rating of 14 per cent in the UK and just 5 per cent
in the US, according to the results of the same Gallup poll.51
July 5.—We had to separate from the Tinýlkum, and from our
luggage, without having any certainty as to where and when we
might overtake them. The chiefs of Ghát, too, had started in
advance. The country had been rising all the way from Wady
Sháraba, which seems to form the lowest point in this whole region,
and we ascended to-day very considerably. Pushing on in advance
of our little troop, and passing a small caravan, which was laden with
provisions and merchandise belonging to the pilgrim-caravan of the
Tawáti, I soon came up with Hatíta and his companions. They were
civil and kind, but the old friend of the English, who had an eye to a
new marriage with some pretty Amóshagh girl some forty or fifty
years younger than himself, gave me sundry expressive hints that I
should spare him something of my outfit,—either a pair of pistols, or
a carpet, or a bernús, or any other little article. My refusal in no wise
rendered him uncivil. While he was riding by my side, I took the
opportunity of making a slight sketch of him,—his English gun, the
gift of some previous traveller, forming a striking contrast to his large
shield of antelope-hide, ornamented with a cross. Having crossed
another valley of some extent, we descended into Wady Elghom-udé
(the Valley of the Camel), which, richly clothed with herbage, forms
an inlet in the stony plateau from north to south, and has a very
cheerful aspect. The encampment, spread over a great extent of
ground, formed quite an ethnographical museum, comprising as it
did six distinct small caravan-troops from different parts of Africa,
and even of Europe.
July 6.—A splendid morning, cool and fresh. We were happy to
meet a small caravan coming from Sudán, which brought us some
important pieces of news: first, that they had come to Ghát in the
company of five men belonging to the family of Ánnur (the chief of
the Kél-owí), who, after a short stay, would return to their country;
and secondly, that the expedition of the Kél-owí had returned from
Kánem, after having totally annihilated the Welád Slimán. They
brought with them seventeen slaves, among whom were fifteen
females, one with a very engaging countenance. After less than
three miles’ march, our companions looked about in the Wady
Telísaghé for a camping-ground. The valley proved of more than
ordinary interest. It was hemmed in by steep cliffs of rock, and
adorned with some fine talha-trees. With no great reluctance we
followed the Tuarek chiefs, who kept along its steep western border,
and at length chose the camping-ground at a spot where a western
branch joins the principal wady. Scarcely had we pitched our tents,
when we became aware that the valley contained some remarkable
sculptures deserving our particular attention.
To the left is seen a tall human figure, with the head of a peculiar
kind of bull, with long horns turned forward and broken at the point;
instead of the right arm, he has a peculiar organ terminating like an
oar, while in the left hand he carries an arrow and a bow—at least
such is the appearance, though it might be mistaken for a shield;
between his legs a long tail is seen hanging down from his slender
body. The posture of this figure is bent forward, and all its
movements are well represented. Opposite to this curious individual
is another one of not less remarkable character, but of smaller
proportions, entirely human as far up as the shoulders, while the
head is that of an animal which reminds us of the Egyptian ibis,
without being identical with it. The small pointed head is furnished
with three ears, or with a pair of ears and some other excrescence,
and beyond with a sort of hood (which, more than any other
particular, recalls the idea of Egyptian art), but it is not furrowed; over
the fore part of the head is a round line representing some ornament,
or perhaps the basilisk. This figure likewise has a bow in its right
hand, but, as it would seem, no arrow, while the left hand is turned
away from the body.
Between these two half-human figures, which are in a hostile
attitude, is a bullock, small in proportion to the adjacent lineaments
of the human figure, but chiselled with the same care and the same
skilful hand, with the only exception that the feet are omitted, the
legs terminating in points, a defect which I shall have occasion to
notice also in another sculpture. There is another peculiarity about
this figure, the upper part of the bull, by some accident, having been
hollowed out, while in general all the inner part between the deeply
chiselled outlines of these sculptures is left in high relief. The animal
is turned with its back towards the figure on the right, whose bow it
seems about to break. The block on which it was sculptured was
about four feet in breadth, and three in height. It was lying loose on
the top of the cliff.