Mr. Tung Must Address 
The Public's Livelihood Concerns

Jane C.Y.Lee & Michael C.M.Kwan

Many objective economic analyses have indicated that Hong Kong's economy is recovering. Economic growth was recorded at 14.3% in the first quarter of 2000, and the unemployment rate dropped from its peak of 6.3% in May 1999 to 5.0% in July 2000. However, recent opinion polls have revealed that the general public remains somewhat pessimistic about our economic and political future. According to the surveys conducted by the Hong Kong Policy Research Institute in July 2000, the public's confidence in Hong Kong's future economic and political prospects scored only 75.4 and 77.3 respectively1 (See Figure 1). Both figures were lower than the equivalents of last year, with a decline of 11.9% for economic prospects and 4.5% for political prospects. Indeed, most of the confidence indices have declined continuously over the past year, except for a temporary rebound in February and March (resulting no doubt from the higher-than-expected 9.2% economic growth in the fourth quarter of 1999 reported in the Financial Secretary's Budget Speech).

This decline in public confidence has led to intense debate among the public and in the media. Most of the discussion has centred on the Chief Executive's low level of popularity and on failures in policy reforms. Among the confidence indices examined by the Hong Kong Policy Research Institute, only those on the "Performance of the HKSAR Government" and the "Performance of the Chief Executive" have been highlighted in media reports, while the others have been ignored. Among those that were ignored, it is interesting to note that confidence in the "Performance of the Legislative Council" scored as low as did confidence in that of the Government. Indices in respect of confidence in issues related to everyday life, such as "Family Financial Well Being", "Major Consumption Decision", "Maintenance Livelihood", "Change of Quality of Life" and "Satisfaction of Quality of Life", etc. were also all at low levels (See Table 1). The HKPRI survey showed that even when economic conditions were showing signs of recovery, those concerning individual and family well-being remained low with no sign of going upward.

Table 1
Comparison on Economic Confidence Index 
(July 1999 and July 2000)

Our survey shows that the percentage of respondents holding full-time and part-time jobs at the same time increased from 5.8% in early 1999 to 6.4% in mid-2000. The recent statistical figures relating to household incomes in Hong Kong also revealed that the number of families suffering from hardship increased dramatically over the past few years. By the first quarter of 2000, approximately 400,000 households (20%) in Hong Kong received an average monthly income of only HK$4,600. About 180,000 (9%) received an income of less than HK$4,000, whereas in 1996 the number was only 85,700, i.e. there has been an increase of 108%.

All these figures indicate that it is the lower-income groups that have suffered most from the economic depression of the past few years. Although objective economic data have improved in 2000, those in the lower-income groups have not yet benefited from Hong Kong's economic recovery. This would seem to be tied to the type of economic restructuring that Hong Kong is experiencing, which makes it more difficult for low-income and less well-educated people to adjust themselves to the changes.

Both the objective and subjective data from surveys give a clear message to the Government: The public agrees in general with the policy reforms on housing, education, civil service and health care, etc. and accepts that the Government has a duty to develop strategies for long-term economic development. Current reforms and strategies, however, are not perceived as improving the immediate quality of life and living standards of individuals. The public has not yet experienced any improvement in daily living standards or any benefit from the policy reforms initiated by the Government. Moreover, the implementation of a number of reforms has led to considerable resistance in various sectors, and there has not been sufficient public support to ensure smooth and effective implementation. The fact that negative sentiments among the public outweigh positive ones will eventually damage the Government's image. Increasing acrimony between the Executive and Legislature has also led to a call for reform to the way the territory is governed.

Over the past three years, the Chief Executive's Policy Addresses have focused on long-term economic development. In the forthcoming policy address, the Government should consider placing more emphasis on issues regarding people's livelihood. They should acknowledge the difficulties encountered by lower-income groups, namely unemployment and the family problems that arise from economic restructuring. The Government should not only focus on employment and re-training issues, but also introduce measures that address the everyday concerns of individuals and families. In reforming policies on the redistribution of social welfare resources, the Government should seek consent from professionals in the social service sector and prioritise assistance to the poor and the middle-classes to help them deal with the tough economic environment. The Government should encourage the public to realise that they are members of a society working towards a "New Economy". The Government should deliver a clear message that it will not neglect the immediate problems and pressures encountered by the general public. It will not simply blindly implement long-term policies following plans designed by a few people at the top.

Balance in all of this is of course not easy to achieve. The Government, however, must make more effort to gain legitimacy and seek support for its policies. In this period of low-level confidence, the Government must find effective measures to win public support and let people feel that it is in touch with their immediate concerns. Only then will some sort of social consensus on the way forward be constructed.

Notes
1. The Political and Economic Confidence Indices are conducted by telephone surveys. The respondents are members of the general public aged between 18 and 64. The distribution of sample age groups is consistent with the distribution of age groups in the Hong Kong population as a whole. The score of each index is derived by subtracting the proportion of respondents answering "Decrease in Confidence" from the proportion of respondents answering "Increase in Confidence", and then adding 100. The full score for each index is 200 points.

Dr. Jane C.Y. Lee is the Chief Executive and Mr. Michael C.M. Kwan is the Assistant Research Manager, Hong Kong Policy Research Institute