Monday, April 16, 2007

Hong Kong vs. Singapore

Singapore and Hong Kong are similar in many respects. Both experienced rapid development starting around 1970 and are wealthy, first-world economies today. Both are highly open economies, with trade exceeding total GDP due to re-exports. Both have a reputation for competent Government, and low levels of corruption.

But there are important differences. The Chief Executive of Hong Kong receives an annual salary of $376,248 USD. The President and Prime Minister of Singapore each receive more than $2 million USD! Bearing in mind that Hong Kong is approximately twice the size of Singapore (in terms of population, GDP, and land area), what justifies this huge salary discrepancy? This seems like a worthy topic for discussion.

The opposition "Democratic Party" planned just such a forum, to discuss the pay of Government officials, and invited a number of prominent outsiders including members of the European Parliament to attend. However, the Immigration and Checkpoints Authority rejected the visa applications of the intended guests. The website of the Ministry of Home Affairs provided the reason:

"Singapore's politics are reserved for Singaporeans. As visitors to our country, foreigners should not abuse their privilege by interfering in our domestic policies. Foreigners who abuse the privileges that Singapore accords to guests and visitors, and meddle in Singapore's domestic politics, are not welcome here."

Hong Kong is different. As a "foreigner" in Hong Kong for almost 6 years, I am free to "meddle." Non-locals play roles in local policy think-tanks, which by their very nature tend to "meddle" in local politics. Personally I have taught Macroeconomics to more than 2,000 students in my time here, and there have been plenty of opportunities to illustrate my classes with examples of Government mistakes around the world- including those made locally. It would be unwise to use local examples if I were teaching in Singapore.

Unfortunately, that's not even the end of the story. In addition, the police have barred the forum from even taking place. Again, this would not have happened in Hong Kong. For all its imperfections, Hong Kong's "One Country, Two Systems" position in China preserves freedom of expression. In this case, the likely furor that Singapore-type salaries would generate would prevent a wise Government from introducing them in the first place.

And that's the important economic point here. As Lord Acton said in 1887, "Power tends to corrupt, and absolute power corrupts absolutely." Freedom of expression can serve as an important check on the ability of those in power to act in their own best interests, instead of the interests of the populace. It serves Hong Kong well.



Luke said...

Do you think it appropriate to have speech freedom in mainland China? If so, is it something to do right now?

James Yetman said...

In the long run, yes. In the short run, maybe, although I'd rather see a large country like China moving steadily towards freedom of speech than simply adopting HK-style freedoms overnight.

Suppose people in Mainland China interpret what they hear as already being filtered by the Government, but the Government has changed the regime to allow complete freedom. Until people adapt to the new regime, criticism of the Government may be mis-interpreted, potentially leading to instability.

My argument here should not be interpreted as an argument in favour of no change. People face incentives to adapt to a changing environment quickly.

cksy said...

Do you mean the President of Singapore is receiving a much higher salary than the Chief Executive of HK because of the less degree of speech freedom there? To avoid government officers from corrupting?

James Yetman said...

My argument is that freedom of speech (and related rights) may be a useful tool in minimizing government excess.