Hong Kong's move away from non-interventionism should be judged on its results, not intentions
Hands-off approach has served the city well, but Hong Kong must also move with the times
Chief Executive Leung Chun-ying has publicly ditched the city's long-held fiscal policy of positive non-interventionism in favour of an appropriately proactive policy.
Back in the 1970s, as a young administrative officer, I cut my teeth on the old policy in the Finance Branch, headed by Sir Philip Haddon-Cave, a strong proponent of positive non-interventionism.
Backed by the rule of law, this policy was also buttressed by pillars of strength such as:
- A dutiful and efficient bureaucracy, which was also humble enough to respect the good business sense of businessmen.
- A low tax regime productive of revenue.
- An open government with prudential supervision to ensure a level playing field and a free flow of information.
Much admired for his powerful intellect and steadfast strategies, Haddon-Cave steered this city through choppy economic waters to achieve the proud status of an "Asian dragon", alongside Singapore, South Korea and Taiwan.
Milton Friedman, a Nobel Prize winner and architect of the famous "no free lunch" realism, praised this city as exemplary of a free economy.
This economic tenet meant the government neither sustained a market nor devised a false market through incentives or manipulation. It picked no winners, and let high flyers fly high. This approach kept interventions to a minimum.
Even so, the government took dynamic action whenever necessary to resolve problems and provide the required social conditions for maintaining the city's prosperity, stability and upward social mobility.
