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Hong Kong’s Human Development Policies: Secondary to Economic Growth?

Katia Görtz University of Erfurt Civic Exchange Intern 2005

1. Introduction Looking back on the achievements of the last century and marvelling at economic growth, political and social changes, and material riches that some enjoy, the new range of problems and challenges that went along with these accomplishments, such as poverty and environmental damage, two of today's most serious global problems, should not be forgotten. This is the time when the Human Development concept needs to be taken up, the core of which consists of the idea that development should improve the lives of all without damaging the choices for future generations. Individuals develop by increasing their capacity to achieve the goals they aspire to - regardless of whether those goals are physical health, economic welfare, freedom or political liberty. With the introduction of the Human Development Index (HDI), a way to measure human progress (both, in economical and social terms), there is a standard that can be used to for measuring well-being. In 1975, Hong Kong people were regarded as ‘medium developed’ but they have been considered to be ‘high developed’ for more than 15 years now. The HDI covers Gross Domestic Product (GDP), life expectancy at birth, adult literacy rate and the combined primary, secondary and tertiary gross enrolment ratio. Hong Kong is associated with economic success and a high quality of teaching. But what about democracy and human rights, two of the other not less important parts of the Human Development approach? Can Hong Kong people enjoy them? This deserves closer attention. This paper examines to what extent the Human Development concept is important to the Hong Kong Special Administrative Region Government of the People’s Republic of China (HKSARG) in shaping policies. The HDI has no legally binding force. This paper will first discuss the Human Development approach in broad terms, including how it is measured and then look at Hong Kong’s performance over the past two years. The next part of the paper will analyse the Human Development policies of the HKSARG. An overall evaluation of success and drawbacks will be made in the conclusion.

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2. The Human Development concept 2.1 Defining Human Development “Our gross national product … counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. . . . Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.”1 Already in 1968, Robert Kennedy stated that the Gross National Product (GNP) 2 alone does not provide sufficient information of human well being. The Pakistani economist and finance minister, Mahbub ul Haq, agreed. Income cannot be equated with Human Development - the concept of Human Development is much broader. It also includes the options people have to make their life worth living linked to the following issues: do individuals have political rights and freedom, do they live in a socially secure environment, do they have access to education and do they have a regular and sufficient income? In 1990, ul Haq realized that the international community paid more attention to the balancing of budgets than to the already raised questions. An attempt to change this attitude was the launch of the first Human Development Report (HDR) that year commissioned by UNDP. Since then it has been published every year. The HDR calls the attention of policy makers, media and Non-Governmental Organizations (NGOs) to human well-being as a comprehensive idea. It highlights shortcomings or achievements of domestic policy from an independent perspective. Hence, it hopefully has a greater impact on governments. Especially the National Human Development Reports (NHDR), which take the HDR approach to a national level and are prepared and owned by national teams, have a great impact. For example, the Nicaragua Report for 2000 showed opportunities for development, had a wide outreach and outcome, including being used as a teaching material in schools and academic curriculum in universities, and is regarded as one of the basic references for the National Education Plan.3 The HDR is as interesting for governments of developing countries as it is for governments, whose nationals are regarded as ‘high developed’. 4 They often respond positively to the report and are proud of their achievements as that could attract educated migrants or discourage potential emigrants from leaving. The HDI, a summary measure of Human Development, is a part of each HDR and has become influential during the past decades. It can challenge national policy. For example, if 1

Kennedy, Robert (1968): Address, University of Kansas, Lawrence, Kansas, March 28, 1968 Gross National Product consists of the Gross Domestic Product (the total value of all final goods and services produced for the market-place during a given year, within the nation’s borders) plus the income accruing to domestic residents from productive activities abroad, minus the income earned in domestic markets accruing to foreigners abroad; in: Hall, Robert E. / Lieberman Marc (2001): Macroeconomics: Principles and Application, Cincinnati, p. 93 3 United Nations Development Programme (2004): History, URL: http://hdr.undp.org/aboutus/nhdr/history.cfm, January 2005 4 which means that the HDI value lies above 0.800 2

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two countries with a similar GDP per capita are placed far from each other in the ranking, it may raise questions that could lead to changes in the domestic policy. The same applies for regions, provinces, ethnic groups and other socioeconomic groupings. The HDI highlights similarities and differences and can therefore initiate some kind of competition among countries, which may result in improvement in Human Development. A worldwide betterment is desperately needed because one out of five human beings lives with less than US$1 in terms of Power Purchasing Parity5 or one out of five can neither read or write - just to mention two of the greatest global iniquities. Unfortunately, the concept of Human Development has become the victim of the success of the HDI. The concept of Human Development is much broader but it has been reduced in effect to a number of the key HDI indicators. For example, the HDI does not take gender inequalities or income discrepancies into account and it does not incorporate other indicators of progress, such as human freedom or cultural achievements. The Human Development Report Office (HDRO) considered adding these factors but it decided that they are too diverse and country-specific, what makes it very difficult to quantify them. Nevertheless political freedom and participation are an important part of Human Development as people without political freedom have fewer choices in life. Besides highlighting the importance of investing in education and health and the promoting of economic growth, participation through democratic governance must be regarded as the third pillar of a Human Development strategy. All of these three Human Development virtues can be mutually reinforcing.6 Thus, the HDI can only serve as an introduction into the concept of Human Development. For explaining the whole concept further indicators must be constructed and analysed. The ultimate goal may be to design a mathematical formula, which shows how certain inputs produce a certain level of Human Development. But as this kind of “production function� does not exist, the best way is to stick to a simple index where each component reflects a broad social reality. The most serious shortcoming of HDR is the lack of enforcement authority as governments do not have to take action based on the recommendations. It must be pointed out that there are other UN mechanisms that are binding and progress in those areas can improve Human Development. These mechanisms related to the various human rights covenants that states sign on to, such as for civil and political rights, economic, social and cultural rights, the rights of the child, of women and so on. The HDR reports provide a sister report to the World Bank Development Reports, and the HDI can be considered as an alternative measure to GNP regarding a nation’s development. 2.2 Measuring Human Development The average achievements of a country are recorded by focusing on three basic aspects of Human Development: long and healthy life, being educated and having a decent standard of living. As these dimensions are hard to measure, indicators are used to operationalize them. The HDRO does not produce the data. It relies on the accuracy of international data agencies and national resources to collect data for specific indicators.

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Purchasing Power Parity: a rate of exchange that accounts for price differences across countries, allowing international comparisons of real output and incomes. At the PPP US$ rate, PPP US$ 1 has the same purchasing power in the domestic economy as $ 1 has in the United States. 6 United Nations Development Programme (2002): Human Development Report 2002, New York, p. 53

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Longevity is covered by life expectancy at birth. Estimates are published by the United Nations Population Division and are developed through linear interpolation based on five year averages. Knowledge is measured by the adult7 literacy rate8 (with two-thirds weight) and the combined primary, secondary and tertiary gross enrolment ratio (with one-third weight). Literacy rate assumptions are taken from the United Nations Educational, Scientific and Cultural Organization (UNESCO), which combines direct national estimates with its own calculations. Many high-income countries do not collect literacy statistics anymore and are hence not included in the UNESCO data. That is why a literacy rate of 99.0 percent is applied for these states. Combined gross enrolment ratio for primary, secondary and tertiary schools are acquired by dividing the number of students enrolled in all levels of schooling by the total population in the official age group corresponding to those levels. Naturally school enrolment does not say anything about the quality of teaching. Thus, this indicator can hide important differences among countries. Moreover the combined gross enrolment does not include students studying in another country. As especially citizens of small states may attend tertiary education abroad, the current data lead to a lower value.9 The Gross Domestic Product (GDP) measures the standard of living per capita in PPP-US$ terms. Therefore, the World Bank provides the data. Before the HDI can be constructed, an index for every dimension must be created. For calculating it, a minimum and a maximum value are chosen for each basic indicator. Performance is then expressed as a value between 0 and 1.10 The life expectancy index measures the relative achievement of a state in life expectancy at birth. Researchers agreed on the maximum value of life expectancy, which is considered to be 85 years. As a minimum value 25 years was accepted. Another index, which needs to be composed, is the one for education. It contains the adult literacy rate and combined gross enrolment ratio. The maximum value for each indicator is 100 percent with a consequential minimum value of 0 percent. For generating the GDP index adjusted GDP is used because a respectable level of Human Development does not require unlimited income. Accordingly the maximum value for GDP per capita is US$40,000 and the minimum value used is US$ 100-PPP. The HDI is then determined as the average of the three dimension indices.11 2.3 Human Development in Hong Kong On July 1, 1997 the whole territory of Hong Kong became the Hong Kong Special Administrative Region (HKSAR) of the People’s Republic of China. Although Hong Kong is 7

Adult refers to people aged 15 and above The adult literacy rate is defined as the percentage of people aged 15 and above who can, with understanding, both read and write a short simple statement related to their everyday life 9 United Nations Development Programme (2004): Human Development Report 2004, New York, p. 137 et seq. a ctu a l v a lu e − m in im u m va lu e 10 Applying that formula: D im en sio n in d e x = m a x im u m va lu e − m in im u m va lu e 11 United Nations Development Programme (2004): Human Development Report 2004, New York, p. 259 8

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officially part of China, it is still ranked separately in the HDI. The same applied for Hong Kong’s time as a British Crown Colony. Due to the fact that the HDI intents to give a worldwide review of Human Development it is reasonable that Hong Kong is analysed separately, basically because Hong Kong’s and China’s development are not comparable with each other’s with Hong Kong being more advanced.12 According to the HDR 2004 the development of Hong Kong’s citizens is ‘high’. It was ranked at place 23 out of 177 with a HDI value of 0.903 in the latest release. As the following illustration shows Hong Kong’s development is the furthest compared to other East Asia and Pacific countries and more advanced than the world at an average.13

Source: United Nations Development Programme (2004): Country Fact Sheets: Hong Kong, http://hdr.undp.org/statistics/data/country_fact_sheets/cty_fs_HKG.html, January 2005

Due to revisions to the data series for some or all of the components of the HDI, changes in the HDI methodology, or variations in the country coverage, the HDI values and ranks presented in the 1990 through 2003 editions of the report are not comparable. The yearto-year changes in the index often reflect data improvement, instead of real increase or decrease in the level of Human Development. However, the HDI trends make the HDI comparable as it uses the same methodology and match able trend data. 14 The HDI trends show that Hong Kong has continuously improved its conditions. Starting from a value of 0.760 in 1975 (identical with a medium Human Development), Hong Kong’s HDI was 0.903 in 2002. 15 This is an 18.82 percent enhancement in 27 years of time. By 2002, the median life expectancy at birth added up to 79.9 years. In the majority of cases women live longer by an average of 5.5 years than men (a women’s life expectancy at birth is 82.7 years).16 The probability at birth of surviving to the age of 40 is 1.8 percent of a cohort spanning 5 years (from 2000 to 2005, whereas the data refer to estimates for the time 12

The HDI classifies China as a country with a medium Human Development with an overall score of 0.745, which represents rank 94; Hong Kong on the contrary is ranked at place 23 because of a much higher life expectancy at birth and GDP and a higher literacy rate. Thus both have to deal with completely different challenges. 13 Not included in this statistic is Japan; it is a member of the Organization for Economic Co-Operation and Development (OECD) and is thus ranked separately; otherwise Japan would be the leader in this group with a HDI of 0.938. 14 United Nations Development Programme (2003): FAQs on the Human Development Indices, URL: http://www.undp.org/hdr2003/faq.html#29, January 2005 15 United Nations Development Programme (2004): Human Development Report 2004, New York, p. 143 16 Ibid., p. 217

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period).17 The same rules applied to the likeliness at birth of surviving the age of 65 show that 92.3 percent of women of a cohort and 84.4 percent of men will grow older than 65.18 The overall public spending on health amounted to 4.6 percent of the GDP in 1996/97. Public expenditures for health comprise 54 percent of total health spending in the same period. The remaining 46 percent were made up from the private sector.19 In 2002, 93.5 percent of adults were able to read and write and 73 percent of the total population in the official age groups for primary, secondary and tertiary enrolment attended school. All students in the first grade reached grade 5 later on. The net primary enrolment ratio was 98 percent and net secondary enrolment was 73 percent in 2001/02.20 Linking women and men who are able to read and write, it must be said that 7.53 percent more men are literate (their literacy rate totalled 96.9 percent in 2002). The same result is existent in combined gross enrolment for primary, secondary and tertiary level schools in 2001/02: 73 percent of the male population had the opportunity to attend classes whereas just 70 percent of women got this chance.21 For strengthening people’s knowledge, the HKSARG spent an estimated 23.2 percent of their total expenditure for education in the period from 2003 to 2004. That equals 4.7 percent of the GDP in the same space of time.22 Hong Kong could promote its development from 1990 to 2002 due to an annual growth rate of 2.2 percent of GDP. GDP per capita rose to US$26,910-PPP in 2002.23 The US-led slowdown of 2001-02 and the outbreak of the highly infectious Severe Acute Respiratory Syndrome (SARS) in early 2003 hit Hong Kong’s economy badly: compared to 2002 the GDP was 6.3 percent lower than in the second quarter of 2003.24 But already in the third quarter of 2003 GDP started to rebound and recorded remarkable growth, which resulted in an overall growth of 3.3 percent in real terms.25 In 2004, the economy continued to recover. From a gender related perspective, these data cover important discrepancies: the estimated earned income in 2002 of the male population was US$33,776-PPP while it was US$18,805-PPP for women.26

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Data refer to the probability of not surviving the age of 40, multiplied with 100. They are medium-variant projections for the period specified. 18 United Nations Development Programme (2004): Human Development Report 2004, New York, pages 147 and 168 19 Institute of Policy Studies (1999): Estimates of Domestic Health Expenditures 1989/90 to 1996/97. Hong Kong Special Administrative Region, p. 20, URL: http://www.hwfb.gov.hk/hw/text/english/consult/hcs/report01/hkdhar.doc, January 2005 20 United Nations Development Programme (2004): Human Development Report 2004, New York, p. 176 21 Ibid., p. 217 22 Education and Manpower Bureau, The Government of the Hong Kong Special Administrative Region of the People’s Republic of China (2004): Government Expenditure on Education, URL: http://www.emb.gov.hk/index.aspx?langno=1&nodeid=1032, March 2005 23 United Nations Development Programme (2004): Human Development Report 2004, New York, p. 184 24 Census and Statistics Department Hong Kong (2004): Gross Domestic Product (GDP), Implicit Price Deflator of GDP and Per Capita GDP, URL: http://www.info.gov.hk/censtatd/eng/hkstat/fas/nat_account/gdp/gdp1_index.html, February 2005 25 The Government of the Hong Kong Special Administrative Region: The Budget Speech 2004-05, para. 45, URL: http://www.budget.gov.hk/2004/eng/budget10.htm, February 2005 26 United Nations Development Programme (2004): Human Development Report 2004, New York, p. 217

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When measuring the access to the resources needed to have a decent standard of living, not only inequalities among men and women are taken into account but also the share of income. Results of the 2001 Population Census computed a Gini Coefficient27 of 0.525. The disparity rose from 0.476 in 1991 and 0.518 in 1996.28 From 1991 to 2001, households with the lowest income have shown no sign of improvement in share of income, whereas there is a sign of decrease in the actual income of the low-income households. The median income of the lowest income 10 percent households dropped from US$400.5 in 1991 to US$386.6 in 2001.29 3. Challenges After examining the present situation of Hong Kong regarding its Human Development and highlighting positive and negative trends, the question is - does the government take measures to improve the situation of the people living in Hong Kong in accordance with the HDR? Promoting Human Development is an economic, social and political challenge. To enrich the lives and freedoms of all people is a multi-sectoral and interconnected task because the improvement of human welfare must reflect the complexity of human life, the concerns people have and the many differences in people's lives. 3.1 Economic and social challenges In his 2005 policy address the former Chief Executive (CE) Tung Chee Hwa mentioned the importance of economic progress for safeguarding Hong Kong’s long-term development. He said that growth was the foundation of a stable society as it allowed people to make use of their capabilities. Thus, the government’s most important task was to promote economic expansion. He went on to note the economy was recovering very well from the 2003 crisis and Hong Kong obtained a 7.5 percent growth rate in 2004. Due to a positive growth rate of the global economy and an increase of the Mainland’s economic activity, the domestic economic outlook for 2005 was seen to be promising.30 But Tung failed to make any concrete remarks on how to transfer economic into human growth. This was a serious shortcoming, as there is no automatic link between economic growth and Human Development. Although growth in income and an expansion of economic opportunities are critical aspects of Human Development, but equitable distribution of income is also important, which requires well-structured social expenditures over time to achieve. That is why the aim should be growth that also enables income inequalities to be reduced, growth that is participatory (allowing for private initiative and broad-based people’s involvement) and sustainable (since raising future production may demand current sacrifices).31 In Hong Kong, growth is not shared in a fair way and can therefore neither be

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Gini Coefficient is based on the Lorenz curve, which measures inequalities over the entire distribution of income. A value of 0 represents perfect equality, and a value of 100 perfect inequality. 28 The Government of the Hong Kong Special Administrative Region (2002): Second Report of the Hong Kong Special Administrative Region of the People’s Republic of China in the light of the International Covenant on Economic, Social and Cultural Rights, para. 11.9 29 Hong Kong Human Rights Commission (2004): Submission to the United Nations Human Rights Committee on the Report of the Hong Kong Special Administrative Region of the People's Republic of China in the light of the International Covenant on Economic, Social and Cultural Rights (ICESCR), URL: http://www.hkhrc.org.hk/content/publications/UN_reports/2004icescrreport/icescr2004.htm, March 2005 30 Tung, Chee Hwa: The 2005 Policy Address. Working Together for Economic Development and Social Harmony, Hong Kong Special Administrative Region Government, para. 13, 34 and 69 31 United Nations Development Programme (ed.) (1991): Human Development Report 1991, New York, p. 13

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participatory nor sustainable. Increasing economic development is not distributed well among the sexes or among the population. First of all gender inequalities have to be taken seriously because Human Development is the development of all. The government addressed this problem and adopted the Sex Discrimination Ordinance in 1995, which defines certain kinds of sex discrimination as unlawful. For promoting the well being and interests of women an Equal Opportunity Commission (EOC) in 1996 and a Women’s Commission in 2001 were set up. The United Nations Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) was extended to Hong Kong in 1996 as well. Nevertheless there are still gender differences in the economic and political life: the earned income of men is much higher than the income of women, which is mainly due to a disproportionate number of women, who work in the lowest wage levels. Just a few women work in higher wage levels. In Hong Kong’s civil service, for example, women make up only 34 percent of all the civil servants and only about 25 percent of them hold the senior directorate posts.32 Regarding political life, women play a minor role. Out of the 60 members of the Legislative Council (LegCo) 11 are female although Rita Fan, the President of LegCo, is female. In the cabinet, the Executive Council, only two of the ministers with portfolios are women. 33 Besides the official members, the cabinet is made up of seven non-official members. Two of them are female.34 It is very likely that the current situation will change to a more equal arrangement in the near future. With the introduction of nine years free, universal and compulsory education in 1978, the cornerstone was laid. By now there are more female than male students graduating from tertiary institutions in Hong Kong, which means that more and more women should reach the upper echelons of various professions. This should close the gap between the earned income of men and women as women are entitled to the same wage for the same work under the Sex Discrimination Ordinance. Additionally, the overall illiteracy rate should decrease and the discrepancy between women and men who are able to read and write should lower since this variable exists among the oldest people, when fewer girls were educated. Nevertheless, the issue of ‘equal work, equal pay’ cannot be taken for granted that it will materialize on its own. Policy effort must be made. Economic development should satisfy everyone’s needs, so that everybody can play a full role in economic, political and social life. That does not apply to Hong Kong. Although macroeconomic variables like the growth rate of income show a positive development, mesopolicies, which influence health, potable water and other social services, are at a low level.35 According to “The Second Report of the Hong Kong SAR of the People’s Republic of China in the light of the International Covenant on Economic, Social and Cultural Rights” the government spent 1.7 percent of the GDP on social security in 2002-2003.36 Meso-policies play a decisive role, as they are central instruments of the government for directly affecting 32

Hong Kong Special Administrative Region Government (2004): Women in Hong Kong, URL: http://www.brandhk.gov.hk/brandhk/e_pdf/efact11.pdf, March 2005 33 Ms. Elsie Leung, the Secretary for Justice of the HKSAR, and Dr Sarah Liao, the Secretary for the Environment, Transport and Works of the HKSAR. 34 Mrs. Laura Cha and Mrs. Selina Chow. 35 which means that the share of budgetary expenditures in GNP or GDP on the social sector are less than 6 percent 36 The Government of the Hong Kong Special Administrative Region (2002): Second Report of the Hong Kong Special Administrative Region of the People’s Republic of China in the light of the International Covenant on Economic, Social and Cultural Rights, Hong Kong, para. 9.5

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Human Development. Through targeted meso-policies particular groups of society, e.g. the poor or elderly, can benefit.37 But at the same time it must be said that high government expenditures are likely to harm growth prospects (particularly through ineffective public programs and a huge bureaucracy). The low level of meso-policies in Hong Kong contributes to the high occurrence of poverty: assuming the poverty line is drawn at an income level of less than HK$4,000 a month [a figure used by NGOs] there were 800,000 people considered to be living below this line in 2000.38 Those living in poverty are mainly unemployed, new migrants, women and elderly persons. The Committee on Economic, Social and Cultural Rights (CESCR) noticed Hong Kong’s serious poverty problem in 2001 already. It urged the government to take action on “the widespread and unacceptable incidence of poverty in HKSAR … so that all residents have a standard of living consistent with articles 9 and 11 of the Covenant.”39 In response to these concerns the government expressed their belief in economic growth, which, together with Human Development and social investment, would improve the situation of the poor.40 But just supposing that economic growth will trickle down to the whole society and only taking very few active measures to fight poverty did not work out: according to a 2003 survey conducted by the Hong Kong Council of Social Service 1,122,000 people live in poverty now.41 This figure testifies that the government’s social policy is ineffective and that the Comprehensive Social Security Assistance (CSSA) Scheme does not provide a decent standard of living. But the government clings to it as the safety net in Hong Kong although not every needy person acquires financial support. At the end of December 2002, half of the persons living in poverty did not receive any financial support under the Scheme (as just about 467,000 persons obtained assistance).42 The new enactment, which prescribes 7 years of residence for recipients to become entitled to apply for CSSA has a serious negative impact on new immigrants from the mainland. The rates of CSSA were cut in 2003 by 11.1 percent because the government adjusted the standard rates due to the deflation in 2003 and before.43 The decrease of rates should not affect the buying power of beneficiaries to meet their basic needs. However, these arrangements meant a budget-reduction in real terms as for example the salary of Civil Servants was deducted by just 6.0 percent and divided into 2 years for implementation. 37

compared to other political entities Hong Kong has a higher absolute spending per capita on social welfare although the level of meso interventions are low 38 Oxfam Hong Kong (2000): Farthest Corner – Country Profiles, URL: http://www.oxfam.org.hk/english/cyberschool/world/032.htm, March 2005 39 United Nations Committee on Economic, Social and Cultural Rights (2001): Concluding observations of the Committee on Economic, Social and Cultural Rights: People’s Republic of China: Hong Kong Special Administrative Region, para. 18, URL: http://www.hab.gov.hk/file_manager/en/documents/references/papers_reports_others/human_rights/report.doc, March 2005 40 The Government of the Hong Kong Special Administrative Region (2002): Second Report of the Hong Kong Special Administrative Region of the People’s Republic of China in the light of the International Covenant on Economic, Social and Cultural Rights, Hong Kong, para. 11.37 41 Hong Kong Human Rights Commission (2004): Submission to the United Nations Human Rights Committee on the Report of the Hong Kong Special Administrative Region of the People's Republic of China in the light of the International Covenant on Economic, Social and Cultural Rights (ICESCR), chapter 6, URL: http://www.hkhrc.org.hk/content/publications/UN_reports/2004icescrreport/icescr2004.htm, March 2005 42 The Government of the Hong Kong Special Administrative Region (2002): Second Report of the Hong Kong Special Administrative Region of the People’s Republic of China in the light of the International Covenant on Economic, Social and Cultural Rights, Hong Kong, para. 9.6 43 Ibid., para. 9.13

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Up to now it seems like the government did not have great success combating poverty. A new attempt was undertaken in 2005 with the establishment of a Poverty Commission, which was strongly recommended by the CESCR in 2001.44 But already in their first meeting the Commission refused to set an official poverty line. Many NGOs and social groups are demanding such a line for years now as it could help monitoring poverty and evaluating policies. Probably this is the reason that the government denies the setting of the line, as they would have to admit that there are thousands of poor people in Hong Kong and that their policy failed. A more active policy in this particular field and a broader participation of the civil society is desirable as the current situation hampers thousands of people to develop, a fact that is totally unacceptable from a Human Development perspective. Especially children suffer from the consequences of a life in poverty: their state of health and general capabilities are worse when compared to children with a better social background. In order to improve the chances of children under five in poor families, the government will launch a Head Start Programme. It shall offer needy parents the chance to receive information on health and educational activities and counselling service. For increasing the potential of all children, the government spends almost one quarter of their total expenditures on education because they believe that in an increasingly knowledge-based society, education of all is the key factor to success.45 As already mentioned Hong Kong introduced universal and compulsory free primary and junior secondary education to all children in the relevant age groups. Access to education is not constrained on grounds of race, religion, sex, age or language. But as the world becomes more and more interconnected problems that everyone encounters are increasingly complicated and diverse. For coping with these challenges students need more knowledge. With the 2002/03 school year the government made subsidised senior secondary education or training available to all students, who are willing and able to continue studies. As tertiary education plays a critical role in providing higher education and carrying out research, the former Chief Executive, Tung announced in his 2000 policy address the goal that until the year 2010, 60 percent of senior secondary school leavers must have the chance to have some form of tertiary education. Up to now there are already 53 percent of students who receive tertiary education.46 Nevertheless figures about participation do not provide any information on the quality of education, which must be the real objective. Hong Kong appears to be doing well by comparison. The Programme for International Student Assessment (PISA) organized by the Organization for Economic Co-operation and Development (OECD) noted that compared to over 40 countries and regions worldwide, Hong Kong students performed well in comparison

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United Nations Committee on Economic, Social and Cultural Rights (2001): Concluding observations of the Committee on Economic, Social and Cultural Rights: People’s Republic of China: Hong Kong Special Administrative Region, para. 38, URL: http://www.hab.gov.hk/file_manager/en/documents/references/papers_reports_others/human_rights/report.doc, March 2005 45 Tung, Chee Hwa: The 2005 Policy Address. Working Together for Economic Development and Social Harmony, Hong Kong Special Administrative Region Government, para. 55 46 Ibid., 56

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to students in most other countries. They ranked first in mathematics, third in science, and sixth in reading.47 Despite the good performance of Hong Kong’s students, classes of 40 students bar students from unfolding their full potential. A class size of 20 to 25 students could help to identify and meet the needs of each student better. In particular, two groups of students need extra support. The first group of students are those whose mother tongue is not Chinese and who do not speak a certain level of English. Many of the ethnic minority children face severe difficulties in schooling, especially learning Chinese. The students need special attention and encouragement, which the parents cannot give to them either because do not speak Chinese or they cannot read and write Chinese. The second group are those from needy and poor families. Their parents might not be able to help them with their homework due to various problems, such as poor education level of the parents, lack of time due to pressure of looking for work, suffering from illnesses etc. In addition, these parents cannot invest on educational resources such as a desk, a calculator, a dictionary and a quiet place to study. In many cases, new immigrant families suffer poverty. The government should give pupils from these families opportunities to receive education. Tung’s policy address sets out a new goal: the government wants to make sure that all children between 6 and 15 go to school. Therefore they want to allocate more resources in the coming financial year to schools and youth organizations.48 The allocation for education in 2005-06 represents the biggest share, or nearly one quarter of the recurrent expenditure (the estimated total government expenditure will be HK$ 247.8 billion).49 Alongside, the government wants to increase the provisions for additional fee-waiving places of the after School Care Programme to facilitate members of low income families to work. Also, in collaboration with schools, they want to provide school-based after school learning and other support services for needy students.50 The idea to provide all children with education will move forward the goal of a life free from poverty. The abilities to read, write and calculate will help them to find a job thus allowing them to participate in the economic, political and social life. 3.2 Political challenges The purpose of the Human Development concept is to increase people’s choices. That is why freedom is an important component of Human Development. People who are politically free can take part in planning and decision-making. Freedom can also release people’s energies so that they will participate in economic and social life - which leads to even higher levels of income and human progress. Although some scholars have argued that economic development would be more rapid if freedoms were cut down,51 the link between freedom and development is rarely in dispute. Empirical

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The Chinese University of Hong Kong (2003): Hong Kong Programme for International Student Assessment (PISA) Results Released, URL: http://www.cuhk.edu.hk/ipro/pressrelease/030703e.htm, March 2005 48 Tung, Chee Hwa: The 2005 Policy Address. Working Together for Economic Development and Social Harmony, Hong Kong Special Administrative Region Government, paragraph 38. 49 The Government of the Hong Kong Special Administrative Region (2005): The 2005-06 Budget, URL: http://www.budget.gov.hk/2005/eng/ebudget.pdf, July 2005 50 The Government of the Hong Kong Special Administrative Region (2005): The 2005 Policy Address. Policy Agenda, p. 25, URL: http://www.policyaddress.gov.hk/2005/eng/pdf/agenda.pdf, July 2005 51 because a strong state can maintain stability and predictability, which both are important preconditions for economic development

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evidence indicates that the economically better-off countries today also have large measures of freedom.52 The most systematic codifications of rights can be found in the United Nations Declaration of Human Rights, the International Covenant of Civil and Political Rights (ICCPR) and the International Covenant of Economic, Social and Cultural Rights (ICESCR). Together with the First Optional Protocol to the ICCPR, they have become known as the International Bill of Rights. The ICESCR defines the right of everyone to self-determination, to work in just and favourable conditions, to form and join trade unions, to social security, to an adequate standard of living (including food, clothing, and housing), to the highest attainable standard of health, to education, to take part to cultural life and to enjoy the benefits of scientific progress. According to Article 39 of the Hong Kong Basic Law, the ICESCR shall remain in force and shall be implemented through the laws of Hong Kong. However, the ICESCR does not have any legal binding force as it has yet not been implemented in the domestic legal system because the government has maintained reservations to certain Articles of the Covenant, e.g. on Article 6. Hence, there is no law protecting workers from long working hours and guaranteeing them a minimum wage, which affect the right to just and favourable conditions of work except for Foreign Domestic Helpers who must be paid at least a minimum wage. Contrary to the ICESCR the ICCPR has been transformed into Hong Kong law in the form of the Bill of Rights in 1991. The ICCPR includes the right to life, to be free from torture and slavery, to liberty and security, to freedom of movement, association, thought, religion and expression, to equality before the law, to privacy, to equality within marriage, and to the enjoyment of culture. It prohibits all forms of discrimination in the enjoyment of these rights, including on the basis of sex, and requires that countries ensure the equal rights of women and men. To some extent the implementation of ICCPR in Hong Kong must be regarded critically: the 1997 Amendment of the Public Order Ordinance (POO) for example causes for concern as it can be used to restrict the right of free expression. Section 7 of the POO states that organisers of demonstrations with more than 30 people are required to obtain a “notification of no objection” from the police at least seven days before a demonstration.53 Although it is doubtlessly important to notify the police of a planned rally (in the interests of national security or public safety), the fact that the police can prohibit demonstrations interferes with Article 5 and 21 of the ICCPR as Article 21 of the Covenant says that “The right of peaceful assembly shall be recognized. No restrictions may be placed on the exercise of this right other than those ... which are necessary in a democratic society in the interests of national security or public safety.”54 Despite the law, it did not prevent 500,000 people from protesting on 1 July 2003 against the government’s handling of the plans to to implement a new national security law required under Article 23 of the Basic Law and 200,000 people marching for democratic reform a year later.

52

United Nations Development Programme (ed.) (1992): Human Development Report 1992, New York, p. 27 Hong Kong Ordinances (2005): Public Order Ordinance, URL: http://www.hklii.org/hk/legis/en/ord/245/, March 2005 54 United Nations (1976): International Covenant on Civil and Political Rights, URL: http://www.ohchr.org/english/law/pdf/ccpr.pdf, March 2005 53

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The HKSARG has also consistently refused to establish a Human Rights Commission (the EOC does not have a broad enough mandate that a Human Rights Commission requires). So there is still no domestic monitoring mechanism of the international instruments, to which Hong Kong has to report. Both committees for the ICCPR and the CESCR urged the government to establish an independent institution with a mandate to promote economic, social and cultural rights and could monitor the overall status of human rights in Hong Kong. People without political freedom have far fewer choices in life. Political liberty allows people to participate in the rules and institutions that shape one’s community and to hold decision-makers accountable. A more participatory governance can also be more equitable as policies need to response to people’s needs. Hence, good governance is democratic governance. The word democracy originated from the Greek words “demos” (people) and “kratein” (to rule) and stands for the rule by the people. Government by the people includes that citizens have the chance to vote in elections for determining all members of the legislative and executive institutions and for holding the decision-makers accountable. The current arrangements for the election of Hong Kong’s Legislative Council (LegCo) and the Chief Executive include some undemocratic features, which restrict the full enjoyment of economic, social and cultural and political and civil rights. The community is very well aware of their rights (partly specified in Hong Kong’s constitution) and supports democratic reforms: on 1 July 2003, more than half a million people protested, among other things, the government’s handling of the plans to to implement a new national security law required under Article 23 of the Basic Law. On 1 January 2004, more than 100,000 citizens rallied for the implementation of universal suffrage in the 2007 Chief Executive election and the 2008 Legislative Council election. A further 200,000 citizens participated in the march on July 1, 2004 for more democracy although on 26 April 2004 the Standing Committee of the National People's Congress (NPCSC) of the People’s Republic of China had interpreted relevant provisions in Annexes I and II to the Hong Kong Basic Law and had ruled out the possibilities for introducing universal suffrage of the Chief Executive and LegCo elections in 2001 and 2008 respectively.55 An undemocratic feature of Hong Kong’s legislative election is the functional constituencies (FCs). This electoral system gives a small number of voters 56 based on membership in a social, economic, industrial, commercial, political, professional bodies or sectors the right to vote in FCs. Voters may be an artificial (as a corporation) or a natural person depending on the membership rules of a specific constituency. There are 28 FCs, each selecting one representative for LegCo, except for the Labour FC, which elects three representatives. The remaining 30 LegCo seats are elected through five directly elected geographical constituencies (GCs), where the election is based on universal and equal suffrage. As there is neither universal nor equal suffrage for FCs, the electoral system for LegCo contravenes Article 21 (2) of the Hong Kong Bill of Rights, which states “Every permanent resident shall have the right and the opportunity … to vote and to be elected at genuine periodic elections which shall be by universal and equal suffrage and shall be held by secret ballot, guaranteeing the free expression of the will of the electors.” 55

The Government of the Hong Kong Special Administrative Region (2004): Decision of the Standing Committee of the National People's Congress on issues relating to the methods for selecting the Chief Executive of the Hong Kong Special Administrative Region in the year 2007 and for forming the Legislative Council of the Hong Kong Special Administrative Region in the year 2008, URL: http://www.info.gov.hk/cab/cab-review/eng/basic/pdf/es5200408081.pdf, March 2005 56 Hong Kong has 3.2 million registered voters who are entitled to vote for the directly elected seats, whereas there are only a total of 199,000 functional voters; see Loh, Christine (2004): Functional constituencies and Hong Kong's LegCo elections, URL: http://www.asianresearch.org/articles/2301.html, March 2005

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In spite of the NPCSC’s decision to deny universal suffrage for determining LegCo and the CE, the government should make use of the remaining space for reforms. Particularly, the FCs need to be reformed. There are ways to make the FCs more democratic even within the NPCSC’s decision.57 One feature that should be abolished is the corporate vote as only natural persons should have the vote. Regarding the election of CE, who is selected by a body of 800 people from various sectors,58 a more democratic poll could enhance the public support and acceptance of the CE. A broader electorate in terms of membership and representation will introduce more views from different levels and sectors of the public into the EC, which, in response, will better reflect the public views. Freedom and political participation are part of Human Development, both as development goals in their own right and as means for advancing Human Development. Additionally, all of them are more a journey than a destination; there is no defined end point. A society can never be completely free and democratic or fully developed. What matters is moving forward, and not slipping back.

4. Conclusion People must be at the centre of Human Development as Human Development is the process of enlarging people’s choices. Hence, it must be development of the people, for the people, by the people. The HKSARG’s policy in various areas meet the requirements of the Human Development concept: Hong Kong's economy is expected to achieve growth in 2005, with GDP forecast to grow by 4.5 to 5.5 percent59 and the education and health care spending increased massively compared to previous years. These are only the indicators covered by the HDI. The variables excluded from the HDI (e.g. income equality) are problematic areas in Hong Kong. People can develop when their basic needs are met, including sufficient nutrition, basic health care, education and social well being. Unless everyone’s basic needs are satisfied and an essential social safety net provided, development cannot be said to be fully ‘for the people’ because people cannot play their full role in the society’s economic, political and social life. One group whose needs do not appear to have been met is the poorest group in society. The HKSARG should therefore focus on models to promote economic growth, which prime objectives are to eliminate poverty. In the short run, the CSSA should be reviewed in order to ensure a basic standard of living of unemployed persons, low-income families and retired persons. The recently established Poverty Commission should collaborate with NGOs to define a Poverty Line. Additionally, this committee should continuously carry out research on poverty and provide recommendations for the reduction of poverty. The widening of the poverty gap and ways to tackle it should be on their agenda. Minimum wage legislation should be introduced to protect low-income workers. This step will help to close the income gap between women and men. Combating poverty is in the public interest in the long run. Societies with great social differences are more likely to suffer from greater political volatility. 57

See: Civic Exchange (2004): An Alternative Policy Address 2005-2006, URL: http://www.civic-exchange.org/publications/2004/apa05e.pdf, March 2005 58 the elected Chief Executive must then be approved by the Central People's Government 59 The Government of the Hong Kong Special Administrative Region (2005): The 2005-06 Budget, para. 81, URL: http://www.budget.gov.hk/2005/eng/budget27.htm, March 2005

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The HKSARG should work with the Chinese Government to remove the restrictions relevant to Hong Kong in the ICESCR. The HKSAR Government should also pass domestic laws to fully implement the ICESCR in Hong Kong in stead of relying on the possibility of the so-called trickle-down effect of economic growth.60 Having a participatory decision-making structure is a part of a society’s overall development. Therefore, the ‘ultimate aim’ stated in the Basic Law to achieve ‘universal suffrage’ must be pursued.61 Before universal and equal suffrage is achieved, the HKSAR Government needs to greatly expand the Election Committee that selects the Chief Executive, as well as reform the most undemocratic aspects of the Functional Constituency election system. Political participation of citizens is an essential human right, without which the people’s choices are restricted. To fulfil this aspect of development, Hong Kong will move closer to achieving higher Human Development.

Acknowledgements Many thanks to Christine Loh, Yan-yan Yip, and everyone at Civic Exchange for giving me the opportunity to work with them and for their advice in writing this paper.

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Tay, Simon S. C. and Yen, Goh C. (2000): Economic, Social and Cultural Rights in ASEAN: A Survey, URL: http://www.fes-geneva.org/ReportsFrame.htm, March 2005 61 The Government of the Hong Kong Special Administrative Region (1990): The Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, URL: http://www.info.gov.hk/basic_law/fulltext/, March 2005

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