Viewpoint, the HKMA's weekly opinion column, celebrates its first anniversary this week. Joseph Yam assesses the role it plays in advancing the HKMA's policy of transparency.
This is the 53rd Viewpoint article published. I started writing these weekly articles a year ago, prompted by one concern that had been bothering me. This is the risk of the credibility and hence the effectiveness of public policy being undermined because of the peculiar nature of Hong Kong's political system - there is neither a majority nor even a sizeable minority in the legislature that both enjoys the mandate of the people and speaks up consistently for the government. One of the prime responsibilities of any government is to get across to the people it serves the reasoning behind its policies. But this was proving to be an increasingly onerous task. And so, taking advantage of the convenience provided by the internet, I started this series of weekly Viewpoint articles. It has been one full year since then; this seems therefore a very good time to review the effectiveness of this initiative and to decide on where to go from here.
I am most grateful to the many friends in the media who have given extensive coverage to these articles, and in enthusiastically advising on the subjects that I might usefully tackle. They have also given helpful tips on the style of writing, in order to make the articles easily comprehensible to the non-specialist. They have given me very constructive comments on how these Viewpoint articles can be improved so as to serve the intended purpose more effectively. They have also given me clear encouragement to continue. Apparently, they have found the articles useful and they also think that this is the case as well for members of the public who are interested in these issues, particularly those in the financial sector.
But I was also given to understand that issues of money and finance are considered to be rather esoteric subjects by the majority of the community. I must say this is somewhat surprising to me. The coverage given to money and finance by the media in Hong Kong is much more extensive and prominent than in other jurisdictions. I have always thought that the knowledge and the interest of the Hong Kong people in these issues are noticeably deeper than that of the people of even the most developed nations of the world. In any case, money as a medium of transaction is something that the great majority of the community come across almost everyday. Money placed in the banking system as a mechanism for the store of wealth is also a matter of direct concern to all; so is the stability of the value of money, as a unit of accounting, in the exchange for goods and services, and for other currencies.
If, indeed, there is a lack of general interest among members of the community in issues of money and finance, one important question then is whether there is benefit in our promoting greater interest. This surprisingly is a matter of some controversy among the people that I have talked to. A few have advised discreetly that we might, in engaging in such promotional efforts, be inviting trouble for ourselves: the intensification of public debate that would arise out of our promoting greater interest, particularly on market sensitive issues, could, they say, if we are not careful, work instead to undermine confidence in our policies. Further, they argue, a monetary authority that is responsive to public opinions and concerns could well be seen, particularly by those who play the market, to be one that is more susceptible to political influence. The job of a monetary authority involves inflicting (or running a system that inflicts) short-term pain on members of the community in order to safeguard their long-term interest. Those responsible therefore cannot be too kind-hearted, they conclude. Others, who form the majority, have advised that greater understanding, especially if it is coupled with openness on our part in discussing and explaining issues of concern, and the costs and benefits of policy options, would in the end foster greater support. The community is likely to accept the necessary evil if there is a clear and convincing explanation on the basis of that necessity. The best course to take seems to be for us to continue with our recent promotional efforts, including the publication of these articles, while being alert to the downside risk of drifting, and being seen to be drifting, into blind populism.
The majority of those who have advised us are of the view that our drive to be open and transparent is a correct one, and that this is essential if we are to maintain the trust of the community. In fact, they see no alternative for us. We need to perform our functions in a manner dictated by the unique political environment of Hong Kong. That environment brings with it a tendency for the community and their elected representatives, ably assisted by a free press, to be highly alert in the surveillance of the activities of official institutions with authority over issues that affect the livelihood of the community. To be successful, we must embrace it with enthusiasm.
Joseph Yam
31 August 2000
More information on the HKMA's transparency policy can be found in the HKMA Annual Report 1999.
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