Big governments and small minds

Venky Vembu | Updated on August 23, 2019

The Hong Kong protests exemplify the ill-effects of wealth inequality and an iron-fisted approach, and hold lessons for India too

Last fortnight, when Hong Kong’s famously busy international airport was shut down for three days following ‘pro-democracy’ protests, I found myself an accidental witness to an uncharacteristic breakdown of law and order in the city that prides itself on its business-friendly character. As an Indian who has for long been inured at home to the sight of violent dislocations of normal life, in one political cause or the other, the experience was somewhat revelatory. It showed the downside of an iron-fisted response from a clunky ‘Big Government’, and the impact it has on business sentiments. Some of those lessons might apply to India, too, despite the many obvious contrasts in the styles of governance in the two geographies.

The prospects in Hong Kong were looking grim even before last fortnight: for close to two months, there had been frequent bouts of street clashes across the territory, between the protesters and the police, with the latter resorting to tear-gassing in a seemingly trigger-happy fashion.

And days before I touched down, a peaceful sit-in protest had been organised at the airport to sensitise visitors about the demands of the people of Hong Kong, which were centred around their keenness to protect their autonomy as a Special Administrative Region of China, and a world city that owes its prosperity and success to the economic freedom it fosters, its protection of private property rights, and the supremacy of the rule of law.

That went off peacefully, but a more vigorous protest, also at the airport — which had been called in response to other extreme instances of police brutality — turned violent, causing over a thousand flights to be cancelled and leaving tens of thousands of passengers stranded.

Tumultuous scenes

Such tumultuous scenes, of course, represent a normal day at the office in a vibrant democracy such as India, but are entirely out of character for Hong Kong. Central authorities in Beijing branded the violent outbursts as acts of “terrorism”; that sentiment was echoed by Hong Kong’s plutocrats, who have enriched themselves on the far-from-level playing field, which is as much a sobering reality of the city.

What such a characterisation overlooks, however, is that the protests initially began with a demand for the withdrawal of a criminal extradition Bill that the Beijing-loyal administration of Hong Kong had introduced. The legislative effort, which has since been held in abeyance, sparked justifiable fears that it would erode Hong Kong’s special status under the ‘one country, two systems’ model of governance promised in 1997, when the erstwhile British colony reverted to Chinese sovereignty.

It is the international financial community’s faith in that promise to Hong Kong — that China would not make intrusions on the rule of law, along with an independent judiciary and protection of private property rights — that has powered the city’s rise as a global financial centre. If the very real fear that Beijing authorities are chipping away at the institutional pillars that hold up Hong Kong are ever realised, it would have hugely malefic effects on the city, and by extension on China.

Defence of rule of law

Viewed in that light, some seeming counter-factuals become self-evident. The notion that a group of protesters — whose methods may have occasionally turned violent — are, in fact, the frontline defenders guarding Hong Kong’s rule of law against intrusions by Beijing may seem mind-bendingly bizarre. But that is, in fact, a more accurate descriptor than the monochromatic and reductionist name-calling of them as borderline anarchists who are damaging Hong Kong’s reputation as a city that means business.

In more recent days, Beijing’s long arm has intruded rather more actively into many other aspects of business in Hong Kong. Indicatively, China’s aviation regulatory authorities have been arm-twisting the top management of Cathay Pacific, the Hong Kong-based airliner, into disclosing names of its employees who sympathised with the protesters. The airline’s CEO Rupert Hogg chose to resign rather than yield to such pressures, but the episode bears all the mark of an overreaching Big Government, unmindful of the consequences of its actions.

In fact, the news of the CEO’s resignation was announced by state-owned Chinese media even before the publicly listed company disclosed it to stock exchange authorities; given that the Chinese government indirectly owns a slice of Cathay, this raises disquieting questions about the state’s role.

Growing inequality

The popular resentments that are manifesting themselves in Hong Kong today are also rooted in glaring income inequality, as measured by the Gini coefficient index. Last year, on a scale of 0 to 1, where 0 indicates equality, the figure for Hong Kong was 0.539. That reading, which is in some ways worse than India’s reading last year, was the highest in 45 years, a testament to the widening wealth gap. Another striking aspect of Hong Kong’s domestic economy is that much of it is controlled by a few family-run conglomerates, which have benefited immensely from the absence of a competition law.

It is in that context that the experience of Hong Kong holds lessons for India, even given the contrasts in their systems of governance. Political theorists who defend democracies often point out that the ‘one person, one vote’ principle — which does not apply to the people of Hong Kong — often acts as a ‘safety valve’ against the build-up of violent resentments.

That argument is not without merit, but it affords no room for complacency in democratic societies, particularly those like India, which are susceptible to a widening wealth gap, where the process of concentration of that wealth in a few family-run businesses is only getting more pronounced, and where the government has in recent years yielded too readily to the temptation to wield the big stick and has impeded business sentiments with its overreach.

Published on August 23, 2019

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