WOO JUN JIE
FEBRUARY 4, 2015
Singapore has again been ranked the world’s most liveable city for expatriates in a recent survey conducted by consulting firm ECA International. In contrast, Hong Kong has fallen out of the top 30 most liveable cities. It is now ranked 33rd, a precipitous decline of 16 spots from last year’s ranking. Hong Kong’s decline has largely been attributed to its poor air quality and instability arising from last year’s pro-democracy protests.
Underlying this growing gap between Hong Kong and Singapore in the liveability index is a divergence in the two cities’ sociopolitical circumstances. While both cities share many similarities as leading Asian financial centres and small city-states, they face very different challenges today.
To improve its position on the liveability index and regain its reputation as an attractive location for expatriates and global talent, Hong Kong needs to address its sociopolitical challenges and focus on achieving good governance.
A CITY IN CRISIS
Hong Kong’s decline in liveability poses significant economic costs to the city. A study by the University of Hong Kong showed that air pollution caused a monetary loss of HK$39 billion (S$6.8 billion) in 2012. These had accrued from medical costs and loss of productivity. Similarly, last year’s pro-democracy protests resulted in Hong Kong’s retailers losing more than HK$2 billion in earnings, ANZ estimates showed.
Hong Kong Chief Executive Leung Chun-ying, in a policy address last month, announced measures to improve environmental liveability and reduce income inequality. It includes taking steps to reduce sulphur and carbon emission by public buses and Hong Kong-owned factories in Guangdong as well as establishing a fund to provide assistance to poorer and disadvantaged segments of society.
However, there are limits to what these policies can do. With regards to air quality, much of the air pollution faced by Hong Kong emanates from Chinese-owned factories located in the neighbouring regions of the mainland. A more feasible solution would be to lobby the Chinese central government to cut down factory emissions and penalise polluters.
While efforts at reducing inequality will contribute to improving social inclusivity and mobility, the roots of last year’s pro-democracy protests extend beyond income inequality. The catalyst was China’s proposed reforms to the Hong Kong electoral system that restricts the election of the latter’s Chief Executive to a selected committee.
But not all is lost. The Heritage Foundation in the US said Hong Kong remains the world’s freest economy for the 21st year in a row. Singapore is ranked second. Hong Kong still possesses the economic foundations that have underpinned its success, such as a free and open economy, robust legal-regulatory infrastructure and a trusted currency.
However, the report pointed out that the recent protests have undermined public trust and confidence in the administration.
Furthermore, there is a perception that Hong Kong is gradually losing its political autonomy from China. A White Paper released by the Chinese State Council last year stated that Hong Kong’s political autonomy is “subject to the central government’s authorisation”.
This erosion of political autonomy may counteract Hong Kong’s free economy and serve instead to deter investors from the territory. In fact, the Macquarie Group has already warned against investing in Hong Kong businesses, which may be affected by political pressures from China.
While its rise as a financial centre was fundamentally driven by its economic freedom, the erosion of the government’s political autonomy and a gradual expansion of Chinese influence in the city’s economy will affect Hong Kong’s reputation as an investment safe haven that is governed by the rule of law. In a similar way, the continued success of its close rival Singapore also depends on politics.
GETTING THE POLITICS RIGHT
Singapore’s current success as a financial centre and its reputation as a highly liveable city hinges upon good governance, which is a function of inclusive politics and administrative efficiency. Investors value Singapore’s political stability, strong rule of law and the insulation of its bureaucracy from political pressures.
[Would the Commercial Columbarium in Sengkang reversal undermine this claim? The land was sold under tender with clear rules (albeit the rules were rather open). Subsequently, the decision was protested by the people and the Minister is now trying to unwind this legal agreement. Does this qualify as political pressure and influence reversing a open and transparent process?
The tenderer/bidder would have done their math and homework to see if they can make money, while meeting URA planning and land use requirements. It would have been better to let the winning bidder show how they can meet the land use requirements in accordance with their tender/bid.
It may well be that after the public furor, they would not be able to partner with any Chinese Temple, or entice any customer for their commercial columbarium.
Or they would have had to severely lower their prices to attract customers and partners.
Or they decide that they cannot make a go of it and return the land to URA (like the aborted motor sports hub).]
Having regular elections and the presence of government feedback channels also allows citizens to have their say or vent their frustrations without always having to resort to public protests.
However, good governance is not simply about politics. It is also about the Government’s ability to address problems and deliver solutions through an efficient bureaucracy. Given the complexity of the policy environment, policymakers are increasingly faced with problems that are linked with other issues such as public transport congestion and high cost of living.
While the Singapore Government has sought to solve each issue separately, it also consolidates policymaking to tackle various emerging problems by establishing cross-functional agencies such as the Municipal Services Office, Smart Nation Office, and most recently, the Cyber Security Agency.
Hong Kong, on the other hand, needs to reconcile a growing conflict between its economic freedom and a lack of political autonomy, to enhance liveability and maintain vibrancy as a financial centre. This requires negotiating a new political consensus with the Chinese central government and Hong Kong citizens. But the Hong Kong government must first gain the trust of its citizens and communicate its position before it seeks to regain its political autonomy within China’s One Country, Two Systems model.
Liveability is inherently a political endeavour. It may also mean different things for expatriates and local residents. As the social unrest in Hong Kong shows, the attractiveness of a city hinges upon ensuring liveability for both residents and expatriates.
Establishing the right balance of social and environmental conditions requires robust political institutions, a keen understanding of citizens’ concerns and aspirations, and the ability to effectively implement policies.
Good governance is after all predicated upon both inclusive politics and administrative efficiency.
ABOUT THE AUTHOR:
Woo Jun Jie is a postdoctoral research fellow in the Singapore University of Technology and Design.
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