Session B: Raising Competitiveness – “Quality of Life” Sectors

Moderator: Mr Vincent Chow Panelists: Dr E K Yeoh, Chief Executive, Hospital Authority Mr Martin Barrow, Chairman, Hong Kong Arts Festival Prof Michael Enright, University of Hong Kong Themes: Arts & Culture Leisure & Entertainment Basic Education as Service Sector Enhancing Healthcare Tourism – Challenges ahead

Improving quality of life is an important driving force behind social, economic and environmental development. The concept of quality of life has been evolving over the decades. It used to be depicted as an objective measurement of standard of living but is now accepted as a subjective perception of various life domains. However, physical and mental health, materialistic provision and social welfare remain major factors affecting the subjective perception of quality of life. The World Health Organization defines health not just as the absence of disease but also the physical, social and psychological wellbeing of an individual. Health is an enabling resource for achieving quality of life. It embraces the appreciation of values, goals, ethical standards and life concerns on top of physical health. Informed decision has become a key consideration. The value of medicine is not just defined by the physicians but increasingly by the patients and the community. A 1997 survey shows that Hong Kong people rated health ahead of monetary rewards as the most important ingredient of a happy life. Medical and health care is recognised as an investment in human capital. A healthier population boosts productivity and competitiveness. Maximising health requires better integration of public health efforts and individual health interventions, as well as collaborative innovations in preventive, curative, rehabilitation, psychosocial and palliative care.

The presentation of arts and cultural events is a risky and competitive business susceptible to changes in the prevailing economy, audience composition, market conditions and funding policies. While aimed primarily for the local people, cultural events can also play a key role in enhancing Hong Kong as a tourist destination. It is crucial for the arts sector to stay competitive by taking care of three major types of customers – the audience, the artists and the sponsors and funding bodies. Audience support makes the creation of arts satisfying and worthwhile. Artists’ performance provides excitement and enrichment of our cultural lives. Financial support from the sponsors and funding bodies ensures the arts remain accessible and affordable to the community as a whole. Global developments in the arts are staggering as communities around the world strive to strike a balance between traditional arts and pop culture. Value today is defined by demand, which is dictated by mass taste and thus determined by the lowest common denominator. With a deeper esthetic and philosophical foundation, the arts should challenge society and provoke thinking. The imminent Government reorganisation offers a challenge in promoting our own culture of Hong Kong, the cultural values of China together with the international cultural perspective.

The global economy is now knowledge-based and built on professionals who can move from place to place. To attract these mobile professionals, cities have to compete against one another in terms of quality of life. About half of the Hong Kong’s workforce is in managerial, administrative, professional and clerical positions. Hong Kong does not stack up as well as other centers in the region, particularly Sydney and Singapore who are using their quality of life as a weapon for competition. The environment, housing, schooling, health care, arts and other amenities will determine where executives choose to locate themselves and their families. The cost structure, including high land costs, has rendered it difficult to set up viable commercial ventures. The cost of setting up a private medical facility or an educational institution to compete with the public sector is daunting. The economics of a stand-alone graduate school, for instance, will not work in Hong Kong. The Government is having a much larger say over quality of life sectors than the people probably want it to be. Subvented world class facilities are losing talented people because they are not open for every one in the world. Entry restrictions are sometimes used to stifle competition rather than enhance standards. Hong Kong students are remarkably isolated, as 98% of the student population are local. Collective action is required, for example, to clean up the environment and turn quality of life a weapon for Hong Kong to compete better with others.

The Environment

A business consultant noted that staff sickness arising from poor air quality was rampant among businesses in Hong Kong. He called for actions to tackle the pollution problem not just in the SAR but also across the border in Guangdong. According to Prof Enright, pollution had driven people to quit Hong Kong. He suggested that legislation control on vehicle emission be accelerated. Mr Barrow testified to the pollution problem by pointing to the haze coming from the North. An Environment Bureau official replied that the mainland authorities had been cooperative in this respect. Studies are underway and the Environmental Protection Department has been discussing the issue with the counterparts on the mainland. A key point, he said, was to engage the public in the decision process.

Long-term Planning

A Hong Kong University professor noted that the population in Hong Kong was projected to grow by 1.5 million by the year 2011. He challenged officials to be more imaginative in meeting the expected demands, especially in public hygiene. Dr Yeoh shared the view and pointed out that good research was essential in quantifying the issues so that actions could be taken both locally and across the border. Food poisoning, contagious flues and other public hygiene problems that have a greater impact should be given priority. A City University professor suggested that Hong Kong should scrutinise Guangdong’s five-year plan so as to come up with a better understanding and working relationship with our neighbouring province.

Taxation

Professor Enright opined that the current economic downturn might offer an opportunity for the Government to widen its tax base. A Finance Bureau official noted that events over the past 12 months had put into focus whether the current low tax rates and narrow tax base could sustain some of the heavily subsidised services, such as medical and health. She noticed that there had been a lack of consensus on this and other issues, including retirement protection. The Government Economist noted that there was an alternative to complicating the existing taxation regime. He was convinced that the public was willing to pay for quality services. The Government, therefore, should better identify the underlying demands so that the “user pay” concept could be better applied. A participant asserted that another option was to run a budget deficit. Mr Barrow was of the view that any form of a value-added tax as a means to broaden the tax base was doomed to be rejected by the Legislative Council.

Tourism

A participant complained that Hong Kong had done a poor job in welcoming tourists and visiting businessmen. He said visitors would get lost because of poor signage. A Hong Kong Tourist Association officer pointed to a 1995 consultancy report which recommended ways to make Hong Kong more appealing in the five domains of infrastructure, facilities, attractiveness, services and events. She reported that the Tourist Association had been working on these proposals. Immigration policies, language ability, transportation, the environment as well as private sector involvement were listed as other areas of concern. Another participant felt that the cost of living in Hong Kong was no longer higher than that of Singapore or Tokyo. He proposed that the SAR should concentrate on developing local and international events. Mr Barrow raised the idea of a greater Hong Kong by integrating the SAR with Southern China to become a more competitive tourist attraction. He found the lack of venues for performance embarrassing, adding that it was disgraceful for Hong Kong not to have an opera house.

Land Policy

An academic from the Chinese University of Hong Kong suggested that a win-win situation could be forged by offering incentive to developers so that they would take care of cultural facilities in their development projects. The Government Economist, however, noted that the hidden price for community infrastructure would ultimately be reflected in the cost of private development.

Quadripartite forum

The importance of bringing the political parties on board was highlighted in both the forum and the dinner discussion. Mr Barrow noted that the Legislative Council should not be bound by its “close shop” mentality. An entrepreneur observed that there should be better representation from the business sector in future tripartite forums. A senior executive noted that some of the proposed actions might not be palatable to the public. An attitude change was in order and politicians should be brought on board to broaden the tripartite forum into a quadripartite dialogue.