Red-Shirt Rally - Day 5

[Guest fountainhall]

There is a standard measure of living standards: GDP/per capita.

In HK in 1960 it was 3021 USD, in 1970 5946 USD. In Thailand in 2009 it is 3946 USD.

The data regarding Thailand is taken from Wikipedia which compares three different sources. The Thailand is ranked 91. One should take into account that US dollar of 1970 was worth much more than US dollar of 2009. Thus, Thailand should be compared with HK in sixties

when, in fact, fast economic growth just started in HK. I stated obvious:Corruption cannot be effectively fought in society with high poverty level. Hong Kong example just confirms it . . . You still have no clue...

With respect, it is you who have little clue of the true situation in Hong Kong - and yet again your conclusions are twisted. Check http://gsociology.icaap.org/reportpdf/World_Economic_Growth.pdf and look at Figure 3. This lists the countries in Asia with the highest GDP growth between 1969 and 2007. Look at the period 1969 - 1975. Although the graph is not very clear, it is obvious that Hong Kong achieved little growth in those years. Then look at the period after 1975 and you see the growth curve starting to rise.

 

Since you quote from wikipedia (but do not name the source file), let me quote for you from wikipedia’s remarks about the decade of the1960s in ‘History of Hong Kong’.

 

While Hong Kong started out with a low GDP, it would use the textile industry as the foundation to boost the economy

but then crucially adds

 

Family values and Chinese tradition would be challenged like never before as people spent more time in the factories than at home. Other obstacles include water shortages, long working hours coupled with extremely low wages were all trademarks of the era

In your comparisons of GDP, you assume that annual income per head of population is related directly to GDP. This may be true now, but you will find no-one who can give you any accurate figure for Hong Kong’s population in the 1960s. Most sources, including the official government census then held every ten years, agree that the population rose from 600,000 in 1945 to almost 4 million in 1970 – a staggering increase of almost 570%.

 

The reason for the increase was massive immigration from mainland China, despite a strengthening of the border in the 1950s. Official figures include those immigrants who had been legally accepted and become part of the population. What they do not show until near the end of the 1960s are the hundreds of thousands of illegal immigrants who had managed to breach the border security and were then hidden by their families who would bribe the police and government officials if they were found out. So to the “long working hours and extremely low wages” of the mass of the population, you have to add a vast underground network of underpaid, illegal sweatshop workers who did not officially exist, all of whom helped swell the pockets of the increasingly wealthy business barons.

 

Inevitably, these poor people were the targets for all kinds of corruption. But they continued to come in their hundreds of thousands. So ineffective were the border controls that by 1967 the Hong Kong government was forced to institute a “touch base” policy. Effectively this meant that if an illegal immigrant finally made it to their families in the city, they would be granted citizenship.

 

The policy was adopted principally to find out exactly how many had actually touched base, and then find a way to feed, house and clothe them. But all that work took the government years to sort out and led by the early 1970s to the world’s largest urban development programme to house more than 2 million people. If voldemar had been in Hong Kong even in the late 1970s and early 1980s as this development was underway, he would still have seen the many shanty towns dotting Hong Kong’s hillsides, all similar to the favelas one sees today in Rio.

 

So, Hong Kong was totally unable to estimate its population in the 1960s with any degree of accuracy. Thus translating GDP into per head of population income is totally meaningless. You seem to be a new breed of historian, voldemar – you piece together a few isolated facts and then just make it up. Your ideas of Hong Kong’s socio-economic development in the 1960s are way off the mark. Hong Kong certainly proves that corruption can be very effectively fought in societies with high poverty levels amongst the mass of the population.

 

How possibly can I start explaining you a solution (that was your original question) if you do not understand the problem?

Yet again, you evade my question by asking another!

 

You stated that you lived in HK for 20 years. How many years do you live in Thailand?

Since 1999. How long have you lived here?

[Guest voldemar]

This lists the countries in Asia with the highest GDP growth between 1969 and 2007. Look at the period 1969 - 1975. Although the graph is not very clear, it is obvious that Hong Kong achieved little growth in those years. Then look at the period after 1975 and you see the growth curve starting to rise.

 

 

 

 

 

In your comparisons of GDP, you assume that annual income per head of population is related directly to GDP. This may be true now, but you will find no-one who can give you any accurate figure for Hong Kong’s population in the 1960s.

 

 

So, Hong Kong was totally unable to estimate its population in the 1960s with any degree of accuracy. Thus translating GDP into per head of population income is totally meaningless.

Well, I do not know where to start. Obviously, you are thinking human being and entitled

to your opinion. But you are not historian, economist or anyone with scientific credentials. I am not aware of any scholar who expressed doubts in ability of HK bureau

of census and statistics to estimate GDP per capita in sixties. On the contrary, there is

a general consensus that the data pretty accurate. My data is from there (but recalculated

in 1993 US dollars).

A very well known scholar C. R. Schenk (University of Glasgow) in her paper "Economic history of Hong Kong"notes that from 1962 to 1973 (onset of oil crisis) the average growth rate of GDP per capita was 6.5 percent per year. Of course, there were negative periods

1967-1968 (riots related to cultural revolution in PRC and 1973-1975 oil crisis.

That will account for your table 3 but has nothing to do with anti-corruption activities.

I quote her further: "The Open Door Policy of the PRC announced by Deng Xiao -ping at the end of 1978 marked a new era for HK'economy." That is where the real acceleration starts.

Nobody denies that anti-corruption campaign in HK was very successful. But it was not the first one. The detailed history is described in classical monograph "Political change and crisis of legitimacy in HK" by Ian Scott. Previous commissions did not succeed because the time was not right.

[Guest voldemar]

Returning to Thailand, the living standards in BKK and certain areas in the South (e.g. Phuket) are definitely higher than average in Thailand. That is precisely the places

where highly demagogical Yellow movement found some support playing on unhappiness of rising middle class with the level of corruption. I would say that the analogy between urbanites in BKK and HK of seventies makes some sense but comparison with the whole of

Thailand does not. Where, for the god sake, do you see a progress in Thailand with respect to corruption? Even new government (just few monthes in the office) already mired in corruption scandals. Or ask farangs on Sukhumvit highway who pay bribes every day.

I will just repeat my point: there is no empirical evidence anywhere in the world that is possible to fight corruption successfully in the presence of widespread poverty.

On the contrary, time and again it was confirmed that corruption is function of economical and social organization of society. It is restricted successfuly under certain concrete cirmustances:

1. Decent salaries for government employers

2. Incompatibility with further economic growth

3. Lack of gap between living standards of various groups of population

[Guest fountainhall]

Thank you for your comment and for your reasonable posts. I will respond likewise and trust that we will soon end this discussion, at least as far as Hong Kong’s economy and its relationship to Thailand is concerned.

 

First, with all respect to Catherine Shenk’s distinguished scholarship relating to Hong Kong, I have several friends who held senior positions in the Hong Kong government in the 1970s, 80s and 90s. Each one will tell you that official statistics for population figures in the 1960s bear little resemblance to reality – because no-one knew what that reality was! It was just plain impossible to do other than guesstimate income per head of population. I assume that Prof. Shenk somewhere qualifies such statements to this effect, perhaps in her preface.

 

You are absolutely correct in saying that Deng’s 1978 open door policy was crucial to the huge economic transformation of Hong Kong. But you may not be aware that it set off alarm bells amongst Hong Kong businessmen and investors who started to fret about uncertainty over the 1997 question. So, early in March 1979, Hong Kong’s governor, Sir Murray Maclehose, met with Deng in Beijing to open the dialogue which was to end some years later in the one country/two systems solution – again a Deng initiative. On Maclehose’ return, he informed the media that Deng had made two important comments to him: “Tell Hong Kong businessmen to put their hearts at ease”, and “It doesn't matter if a cat is black or white, so long as it catches mice.” That opened the floodgates to new investment in Hong Kong and by Hong Kong businesses in China. There was a major hiccup between the time of the UK/China agreement in 1984 and Tiananmen Square in 1989, but Hong Kong’s economic prosperity had well and truly taken off by 1984.

 

In my view, the four main factors were –

 

1. the establishment of the ICAC in 1974 and the creation of a level playing field for international business;

2. the rooting out of corruption helped advance the development of a middle class;

2. Deng’s initiatves;

3. the outcome of the Deng/Maclehose meeting.

 

Much credit has to be given to Maclehose, arguably the finest governor Hong Kong ever had, I had the pleasure of dining with him several times and thought him hugely impressive. Politically a socialist early in his career, I believe part of the reason for his success is because he brought his socialist principles to the job, even though he was supposed to flow with the UK government of the day.

 

How does this relate to Thailand? As I have said, I believe you can impose stringent anti-corruption measures here and now – so voldemar and I will just have to agree to disagree. Hong Kong did have major poverty amongst the mass of the population in the 60s and early 70s, plus a massive difference between the income levels of the fat cats and top civil servants compared to the rest of the population. Yet I accept its colonial model is very different from the political situation in Thailand. It would therefore require massive political will by a ruling party here to go the Hong Kong route. But I still believe most strongly that Thailand cannot begin to take-off economically until effective steps have been taken to root out the most blatant corruption - not the other way around.