George S. Patton, one of World War II’s most celebrated generals, had this to say about early planning: “A good plan today is better than a perfect plan tomorrow”. This comes to mind as people from all walks of life wonder how we can recover from what is arguably Hong Kong’s most destructive postwar catastrophe.
In response to the COVID-19 pandemic over the past six months, Hong Kong has demonstrated to the world its highly coordinated policy capacity supported by an outstanding medical system. From sourcing and wearing masks, washing hands and sanitizing, temporarily shutting down entertainment venues, and limiting participants in public gatherings, to finally restricting travel across the border, different sectors have gone all out to act in consort with the government’s directives. Let us hope we can transfer our abilities in coping with COVID-19 to staging a successful recovery from it.
While prevention measures will continue to be in place in the near future, and even stepped up as has happened following a recent resurgence of cases, it’s not too early to start considering a strategic recovery plan. We will need to adapt to a new working environment with certain restrictions as well as newfound flexibilities and opportunities; in particular, the efficacy of working from home, and at the same time, find sustainable ways to rejuvenate our economy.
The pandemic has exposed the shortcomings and vulnerabilities in the old system, which relies very much on consumption. It unduly stresses biodiversity, depletes resources and accelerates climate change and associated risks. In addition, with the enlarged gap between different social groups under the old system, the disadvantaged are the ones who have suffered the most in this pandemic. The traditional development path is by no means a solution. The new engine of growth needs to center on balancing relations between the people and the planet, and to reduce inequality and enhance resilience. This desire to build a sustainable future has been voiced out and echoed across the world but the pandemic experience makes the call ever more pressing. In the foreseeable post-pandemic era, sustainable investment must be prioritized. We must ensure that green development and green finance are mutually complementary and reinforcing.
Hong Kong should set its own targets in this upcoming sustainability transition. As a first step, it needs to reopen and re-engage with the outside world; and the second step is to design a strategic plan for transitioning into a greener economy.
A major area deserving of special attention in Hong Kong’s post-pandemic relaunch is the health-code system. Challenges of testing capacity and cost in launching the system can be resolved if stakeholders including public hospitals, research laboratories, universities, and insurance companies agree to join forces. The cohesiveness in fighting the pandemic is equally needed in bringing Hong Kong out of the lockdown. With more institutions enrolled in the plan, testing centers will be scattered across the city. Insurance companies may usher in new business and help those who are in need. The decentralized network that multiple stakeholders help form will become a shield that protects Hong Kong.
But reopening Hong Kong alone will certainly not be the panacea. We are facing alarming signs of losing our global competitiveness. In March, Hong Kong’s ranking in the Global Financial Centers Index has dropped from third to sixth — the lowest since the index was created in 2007. Hong Kong’s global ranking in overall competitiveness also dropped from third place in September last year to sixth this May. It is also the first time that Hong Kong fell out of the top three since 2017. Hong Kong’s conventional advantages need to be upgraded with a renewed and clear strategic direction for economic development.
With its proven strength and established reputation in finance, and the backdrop of sustainability transition, Hong Kong is presented with an unprecedented opportunity to transform into a green finance center. Furthermore, the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area published in February last year supports the development of Hong Kong into a green finance center in the Bay Area. The Opinions Concerning Financial Support for the Establishment of the Guangdong-Hong Kong-Macao Greater Bay Area released in May this year reiterates such support. What currently is missing is Hong Kong’s own initiative and commitment to take this forward.
Hong Kong must grasp this opportunity to position green finance at the core of its plan for post-pandemic recovery and green economy development. The government issued its inaugural green bond in March last year. The new green finance strategy should envision a comprehensive system that goes beyond green bond issuing and certification and includes various financial instruments and related institutional arrangements.
Hong Kong now is standing at the intersection of an overhaul of its traditional four pillar industries and a green economic transformation. If it were to play its cards right, Hong Kong would leverage our current crisis to launch itself into greater successes befitting its can-do spirited people and efficient government. It’s never too early to plan ahead.
Dr. Coco DU is a research associate at the Institute for Public Policy, the Hong Kong University of Science and Technology, and a fellow of Global Future Council on Agile Governance, the World Economic Forum.