social welfare spending in hong kong's economic growth
TRANSCRIPT
How to Bite an Apple
Social Welfare Spending in Hong Kong’s Economic Growth
Mark Raygan E. [email protected]
The Rosy Picture
On the outside, economic growth misleads. It doesn’t always mean social development.
A Bite into GDP
Social Welfare
Agriculture
Infrastructure
Military/Defense
Foreign Affairs
Sci-Tech
Debt Financing
(for aging population)
How big should it be in HK’ 20%
GDP max spending?
The Ideal Equation Economic Growth = Improved Social Welfare Spending
Some concepts: • Address disparity/income gap;
provide “catch-up” mechanism• Promote “well-being” (physical
and social dimensions; self-assessment variable)
• Redistribution (left vs right thinking)
The Actual Equation Economic Growth ≠ Improved Social Welfare Spending
Some considerations: • Concept of “investment”(education for
young vs healthcare for aging population)• Inequality within equality (fruit allowance
- same amount for rich and poor elderly) • Reactive vs proactive (i.e. non-
contribution, no-mean test allowances) • Enhanced governance through market
mechanisms (i.e. Singapore) • Socio-political, socio-cultural ideologies
(strong family culture)
The Welfare State Fundamental principles:Key role in the protection and promotion of economic and social well-being of its citizens • equality of opportunity • equitable distribution of wealth • public responsibility for those
unable to avail themselves of the minimal provisions for a good life
Key Indicators in Welfare State
Modeling
1. Economic (sustained, steady growth)
2. Ecological (green investments & practices)
3. Social (social services & social welfare)
Economic Growth & Social Welfare
Some concepts: 1. Economic growth — a
necessary condition (core driving force), not a sufficient condition for development
2. Economic growth — a primary factor and material condition for solving social problems
3. Demand driven by cash enough to back need for supply
Economic Policy & Social Policy
Some debates: • Social policy (+) — ‘productive
factor’, investment dimension; contributes to production and wealth generation (EU); generates social capital
• Social policy (-) — burden on the economy; extractive; state intervention towards social legitimation in wealth generation; distorts capitalist orientation
• (HK context) Economic policy influences/dictates/constrains social policy
So which actually supports what?
Contextualizing Hong Kong
Economic Growth (Plus): • One of four ‘Asian Tigers’• Ranked 1st — World’s
Most Economically Free (since 70s)
• Ranked 2nd — World Competitiveness
• Ranked 7th — World Competitiveness Index
Economic Growth Ironies:• Ranked highest in income
inequality (world’s most developed economies)
• Surging housing prices (30% higher than NYC)
• Declining quality of life index• “Third-world” standard social
spending (myopic view of social security)
Social Welfare Spending vs GDP
Social Welfare Spending vs Aging Population
Upward HK Social Welfare Spending?
Conclusions Questions Analysis
Does economic growth translate to more resources for
poor people?
In the ideal context: Yes. The conditions capacitate government to translate income to economic activities and social services for marginalized sectors. But achieving dynamism requires a combination of government intervention and market mechanisms.
In the Hong Kong context: Not enough. While there can be a conservative upward trend in social welfare spending, the same is (a) marginal with respect to its strong GPD; (b) insufficient in relation to its counterparts in the same economic competitiveness ranking; and (c) short-sighted with respect to its fast aging population and low fertility rate.
What influences the relationship
between economic growth and social
welfare?
In the case of Hong Kong, where economic policy influences social policy, the extent to which economic growth impacts social welfare can be influenced by: • Keen interest to maintain reputation as world’s freest market, further encouraging
investments and competitiveness through low taxes; • Chinese culture that imposes social welfare responsibility on family; one that views
acceptance of social welfare as admission of being “lazy”; one that highlights hard work (devaluing the concept behind non-contributions in certain social services)
• Diverse yet dominating political interests in policy-making