Wednesday, February 23, 2011

No long term commitments

The Hong Kong government is very rich.  It is unique among governments, in the way it has been accumulating surpluses year after year.  It is HK$71.3 billion for 2010-11. There is probably no other government in the world which has built up a reserve equal to such a high percentage of its GDP. 

So it must spend some of that surplus. 

But it is extremely reluctant to increase recurrent expenditure, which has to be spent every year.  Since it does not want to make any long term commitments, it can only resort to giving one time handouts. 

It is better than doing nothing.  But it does not really help Hong Kong build for the future.   


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