kenny hodgart


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How The Spectator, and Milton Friedman, misconstrue Hong Kong

This article can also be read at Asia Times

It’s my understanding from meeting people who know him that the English journalist James Delingpole is a decent, thoughtful sort of fellow, despite being way further to the right than seems entirely compatible with possession of a full set of marbles. Personally, even when he is being wrong-headed, I rather enjoy his writing – for its honesty, its freewheeling attitude, its soft-pedalled erudition.

It was fairly obvious, though, from reading his September 24 column in Britain’s Spectator magazine, that he must have spent most of his recent visit to Hong Kong in the pub. Starting off with an anecdote about taxis is usually a giveaway sign that you’ve neglected to do any homework whatsoever. His piece descends from there into a Cook’s Tour of free-market phantasmagoria.

Milton Friedman spent his twilight years evangelizing about Hong Kong and how its economic success proved the irreproachability of pure free-market capitalism. Delingpole merely picks up the baton. Hong Kong’s laissez-faire, “red-in-tooth-and-claw” environment and its low taxes lead him to realise “how incorrigibly, nauseatingly socialistic most western nations are.” The only basis he provides for this realisation is that his step-son has a better job in Hong Kong than he could land in London, despite – I’m reading between the lines – not being especially bright.

The main problem with this narrative about Hong Kong’s development is that it was only partially true when Friedman was espousing it and it is even less so now. Sure, Hong Kong has very low marginal tax rates and, at around 18 percent, low state spending relative to GDP. Moreover, it consistently scores high on indexes measuring ease of doing business. These indicators can be misleading, though: Hong Kong, while spending nothing on defense, is far more statist than outsiders generally perceive.

For decades, the Hong Kong government has offered advanced social welfare services along vaguely European lines. It provides an excellent public health care system and funds education and social security. In public transport and utilities, it grants monopoly franchises and holds equity in them. And it imposes strict rent controls for the roughly 30 percent of Hongkongers who live in public housing, thereby indirectly subsiding labor.

There’s plenty of indirect taxation too. Exorbitant real estate prices have caused spiralling inequality but they also keep government revenues high even as income taxes remain flat and low. How this works is that the government owns all the land in the territory (capitalism, James?) and drip feeds it on lease to a small handful of developers, who in turn control the supply of housing to keep the market inflated for buyers and renters.

Without help from their families, households with two above-average earners can just about save for a deposit to buy a home – provided they don’t eat out much or go on holiday for a few years. (If they want to have children, their careers, mercifully, needn’t be interrupted: childcare is provided by an army of imported female workers from the Philippines and Indonesia who earn a pittance and have next to no rights.)

For those a rung below, there’s no chance. In the first quarter of this year, the average wage in Hong Kong decreased to HK$15,500 (US$2,000) a month. At the same time, a survey classified Hong Kong homes as being the “least affordable” anywhere, ever, with average flat prices surging to 19 times gross annual median income.

One might argue that it’s not the government’s job in a laissez-faire system to fix this problem, but the point is that the government’s role skews the market already and it’s not in favour of the vast majority of Hong Kong people, however hard-working and entrepreneurial they might be. Indeed, there is a case to be made that Hong Kong’s mantra of “positive non-interventionism” has never been more than a soundbite anyway.

In the banking sector alone, the history of Hong Kong since the 1950s onwards is one of repeated bailouts, government rescues and regulatory capture by HSBC and Standard Chartered to stop outside banks gaining licences. So much for Friedman’s notion of free and open markets. Interest rates were set by a cartel until 2001.

The reality of Hong Kong is that it has institutionalised cartels and monopolies in almost every sector of life. Those in political office work hand in hand with the same same business elites who make up a large part of the committees who appoint them. There are some 300,000 SMEs in the city and yet its economy is dominated by a handful of conglomerates. According to a Wall Street Journal report in 2013, the six biggest “take in at least 23 cents of every dollar that residents spend, controlling Hong Kong’s biggest mobile-phone network, its electrical system, its bus system, the vast majority of the buildings making up its iconic skyline, plus two-thirds of its private housing market and 90% of its supermarket sales.”

There’s no doubt that the ingenuity of the private sector helped Hong Kong to grow its per-capita income from 28 percent of Britain’s in 1960 to being almost on a level pegging with the United States by that measure today. But so too did government spending on the poor, the fact that Hong Kong is an entrepot economy and the surplus value it has attained from attracting global companies to make it their home.

As for Mr Delingpole, I get it: you need somewhere to hold up as a paragon of the ‘virtue of selfishness‘, because the “socialism” being foisted on Britain by its Conservative government is crap. But if you see it in Hong Kong, you’re mistaken.


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The messiah friend of President Duterte

This article can also be read at Asia Times

Their Sunday service has just ended and I’m trying to talk to some of the worshippers making their way out of the Southorn Stadium in Hong Kong’s Wan Chai district. Sonny, a middle-aged man who calls himself a Preaching Club Member and wants to know my purpose, seems keen on stopping me. As it happens, he has quite a lot to say for himself – both about the church to which he belongs (‘The Kingdom of Jesus Christ, The Name Above All Names’), and about the prospects for my own salvation (basically, unless I become a “Kingdom citizen”, they’re not good, I think).

Sonny has known the sect’s leader, Pastor Apollo Quiboloy, for many years, he says. Pastor Quiboloy claims to be the ‘Appointed Son of God’ and has amassed considerable wealth and power in the Philippines in recent decades. So what kind of man is he, I ask. “He is just an ordinary guy, but there is something special from within,” Sonny insists. “Many, many people love the pastor. He is the one who encouraged our good president (Rodrigo Duterte) now to stand up and make the Philippines better.”

Earlier, video of a sermon given in Davao City by Pastor Quiboloy (who claims to have dreamt 17 years ago that Duterte, his long-time friend, would one day be president) had been relayed live on two large screens. As he waxed on about how it has pleased God to make him wealthy – when he had nothing in life, he shouldered that burden with equal grace – I couldn’t help but notice that many of the women around me seemed more concerned with browsing Facebook on their smartphones.

Admittedly, it’s an entirely different story when the music gets up. At the Kingdom’s Southorn services, a full choir and half an orchestra, perched in front of a giant print of two golden staircases ascending into the clouds, occupy one end of the basketball hall. The congregation, around 1,000-strong and composed largely of Filipina domestic helpers immaculately attired in pristine white dresses, can’t seem to get enough of the hymns – jaunty gospel numbers laden with endless euphoric key changes.

It would be tempting to describe the effect as Stepford-ish. In truth, there is something rather touching about the sense of personal and collective pride on display. And even if it’s hard to fathom the appeal of their curiously un-spellbinding figurehead, there’s no obvious sense of anyone having been actively coerced into attendance. Annabel Arroyo, a woman in her mid-30s from Mindanao who has been attending for four years but only submitted to being baptized last December, tells me: “The church is our community. I came because I had friends who came and they talked to me about it.”

Pastor Quiboloy’s ministry is, nevertheless, by most definitions, a cult. And like most cults, its unsavory facets – more of which at length – do not lurk far beneath the surface.

In Hong Kong, The Kingdom of Jesus Christ is listed, along with a legion of similar-sounding Christian churches, on the Inland Revenue department’s register of Tax-Exempt Charities, although it does not have a permit from the Social Welfare department to collect money in public. Nor indeed do either of two philanthropic concerns – The Children’s Joy Foundation and the Sonshine Philippines Movement – related to the church. Women claiming to collect for these programs are a common sight on the streets of Hong Kong Island’s busiest nightlife districts, but the church denies any knowledge of their activities and when approached by the Asia Times they were evasive about any links to Quiboloy’s sect. Rumors abound that they are “on the make”.

Quiboloy set up The Children’s Joy Foundation, its website states, in 1998, “to help feed, clothe, and send to school” destitute children. Meanwhile, donations to the Sonshine Philippines Movement are directed towards “the complete restoration of man and his environment” – and there are details online of its reforestation programs and rebuilding work in communities devastated by typhoons. What’s clear is that these endeavors are no mere ruse. “The pastor has helped many poor people,” says Rose, a member of the church for 18 years who says Quiboloy put her through school in Davao. “He paid for everything – because he is a very good person.”

Where his benevolence ends and his personal wealth begins is not so apparent. Suffice to say that, having risen from poverty, being the messiah has made Quiboloy a very rich man – besides occupying a large estate in the foothills of Mount Avo, near Davao City, he was able to lend Duterte his private jet and helicopter during the former Davao mayor’s recent, successful bid for national office.

As Quiboloy tells it, God came to his mother in the form of a cloud after he was born, declaring “That’s my son.” He left the United Pentecostal Church to start preaching his own gospel in 1985 and now claims to command the allegiance of four million tithed followers (meaning they give the church a tenth of their income) in the Philippines and two million more overseas, in addition to reaching 600 million viewers worldwide through his TV station.

In a rare interview with a mainstream media outlet, he told ABC News, in 2010, that every member of his Kingdom shares in his wealth and is welcome to stay at his mansion. In explaining, however, that the Almighty had revealed to him in 1983 that he wanted Quiboloy to own a jet, he also made it clear that each of us ought to accept what is apportioned to us. “If it is not God’s will for me to have these things I have, you can take it away,” he told his interviewer. “It is God’s will that we follow… If he wanted me to live like a rat, if he wanted me to live in wealth or in poverty, it does not matter to me. Put me there and I’ll be happy as long as it’s God’s will.

My own attempts to score an interview with Quiboloy were met with friendly suspicion then ultimately rebuffed after I complied with a request to submit a list of questions to his office. I’d wanted to sit in a room with someone who describes his state of spiritual perfection as being similar to that of Adam before the Fall and who has convinced several million self-identifying Christians that he is justified in putting himself on an even footing with Jesus Christ. I’d wanted to ask him about his conversations with God – and about allegations against him of brainwashing and of holding a young woman against her will.

I’d wanted to ask, too, about stories linking him to intimidation and land grabs against indigenous peoples in Mindanao – including an episode that resulted in the death of the Bagobo K’lata tribal leader Dominador Diarog, who was gunned down in 2008 shortly after refusing to sell Quiboloy two hectares of land near the so-called Garden of Eden Restored on the Pastor’s grounds. At the time, Quiboloy was able to call on Duterte – himself widely suspected of overseeing extrajudicial killings during his tenure in Davao – to dismiss rumors of his involvement.

In the end, I have to make do with watching him preach on a big screen. Quiboloy made one of his semi-regular appearances at the Southorn in June, but on my visit his presence was virtual. He’s fatiguing to listen to – by turns straw man-denouncing demagogue, late-era Elvis impersonator and used-car salesman – and I’m unable to discern the “something special from within” that Sonny alludes to. Maybe it’s simply stamina, or conviction. “No other pastors or preachers have the knowledge that he has,” says Rose. “He teaches us to work hard and make money for the Father’s glory and to pay for the ministry and its work.”

As I look around the hall, I get the sense I’m witnessing a show of strength that thrives on vulnerability. Maybe that’s how all religion works. Maybe not. Maybe I’m just too cynical. I can’t help but suspect, however, that the greater cynic is Pastor Quiboloy himself.


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It’s always rush hour in Hong Kong

This article can also be read at SCMP.COM

I don’t expect it’s a hugely controversial observation for a foreigner to make that for all their many virtues Hongkongers are possessed of a certain impatience. People here seem to be in a constant hurry: to get out of the lift, to get on the train, to put in more hours at work, to make sure their lunch doesn’t run off its plate. Everything is time lost or gained; results must be instant. There’s a problem? Sack the helper. Send in a tutor. Fire off a dozen instant messages.

The other day, out on my rounds, I took a phone call from an unrecognised number – something I’m usually careful not to do because nine times out of ten when I pick up I’m met with a snatch of music, followed by a couple of rings and then someone saying “wai?” (Which puts me in a distemper, because whoever is on the end of the line made the call, not me). But no – this time it was a member of our much-loved public relations community phoning me about a story. Had I received her email? Possibly… When had it been sent? Just now. Awkward pause. What did it say? Oh, maybe you need to read it and reply to me. Yes, OK. I checked: it asked me if I could acknowledge receipt of an attached document. Dutifully, I did.

Perhaps I do Hong Kong a disservice by imagining things are different elsewhere. Certainly, the proliferation of channels of instantaneous communication, all jammed into your smartphone, means that unless you throw the damn thing away it is harder, wherever you are in the world, to attain serenity. But, really, we’ve arrived at an appalling state of affairs, as a society and a race. Take Whatsapp, for example. It shows when you’re online – so if you’re already having a conversation and someone else starts in with a whole other thread of messages, it’s impossible to duck out without seeming like you’re deliberately ignoring them.

The contention, of course, is that all of this “connectivity” means people are getting on with their lives more efficiently, that they’re doing things quicker and better and with fewer misunderstandings. Rubbish. All it means is that you spend half your waking hours responding to demands for updates and worrying about whether it’s bad form not to reciprocate emoticon usage.

For some people, responding to emails at midnight, or 6am, or two minutes after their out-of-office ping-back has informed you they are on annual leave, shows how hard-working and committed they are. They’re suckers. But it’s also not really their fault: they’ve simply internalised all the angst governments and corporations go about spreading to make us all feel like we’re personally responsible for slackness in the economy. You might spend your days recycling information in the hypomanic mills of the post-industrial knowledge economy. You might labour as a mere pusher of digital pens. But you’re a lazy bastard and anaemic growth is your fault. Got that?

Over the last few decades, time-saving plant and machinery has increased “productivity” in ways that make the sweat of our brows like unto driblets in the ocean. My guess is that we feel a sense of collective redundancy and guilt about this – anxieties which the dismal, and dismally inexact, science of economics can easily be mobilised to bolster. Growth is one thing, productivity another. But productivity growth must also be maintained.

Not all technological innovations are equal, though. And while instantaneous information might be useful in battle, or for nailing criminals, it is not always. Twitter consists entirely of media folk preening themselves and not doing any actual work. Rolling news is increasingly just people talking about what’s in tomorrow’s newspapers, which ruins the fun of buying a newspaper. And real-time market information (at least according to the Wall Street Journal’s ‘Intelligent Investment’ columnist Jason Zweig) is a terrible idea that probably leaves investors worse off over the long run.

Now if you’ll excuse me, my phone is making all kinds of noises and I must go to it – if only to maintain the illusion of productivity.


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Hong Kong politics – the basics

This article can also be read at SCMP.COM

I am often struck by how well-informed Hongkongers are about stuff happening elsewhere. After the referendums on Scottish independence and Brexit, for example, many here seem to have more of a grasp on Britain’s complex constitutional affairs than large swathes of the people who voted.

The complexity of Hong Kong’s own affairs is of a different order, however. For a city so inhabited and visited by foreigners, it seems to me that its political situation is not well-understood by onlookers and harder to grasp than most. No doubt this is partly due to a lack of curiosity, and partly because international media take only superficial notice. It’s also because politics here is a conversation that tends to defy the outsider points of access.

Here, then, ahead of next month’s Legislative Council elections, is my stab at a 10-point guide to Hong Kong politics for the ingenue and the bystander – and the hordes on social media baffled as to why the city has its own Olympic team.

1. Everything in Hong Kong revolves around the Basic Law, the city’s mini-constitution. Whenever any action is proposed, someone will protest that it is against the Basic Law.

2. The Basic Law is much-cherished. Disagreement is rife, though, as to what large chunks of it mean, and, more importantly, who gets to decide. Lawyers argue as to whether its legitimacy derives from the Sino-British Joint Declaration on Hong Kong, of 1984, or from the National People’s Congress. The smart money will always be on the NPC making its own mind up. The internet tells me that these days the word “basic” can mean “thoughtless and vapid.”

3. A number of rights and freedoms are protected under the Basic Law, in-keeping with the principle of “one country, two systems”. The two systems it refers to are i) cadre capitalism in mainland China, and ii) crony capitalism in Hong Kong.

4. Article 45 of the Basic Law enshrines the “ultimate aim” of having the city’s Chief Executive elected via universal suffrage. There has been something of a hold-up with this. Last year, lawmakers sank proposals that would have allowed Beijing to pre-screen candidates, reasoning this would be against the Basic Law. The proposals’ sponsors argued, meanwhile, that the breach would be in allowing candidates who opposed the Central Government to stand.

5. There are political parties of the left and of the right in Hong Kong, liberals and conservatives. These distinctions pale, however, against where they each stand on the issue of what to do with the Basic Law.

6. Whenever Hongkongers have time to do anything, they form a new political party. The result is more parties than anyone can count, far less remember the names of. There are currently 16 parties represented in the Legislative Council, alongside 10 independent lawmakers. In the upcoming election, at least three dozen parties have put candidates forward.

7. The largest single party in Legco since 2004, The Democratic Alliance for the Betterment and Progress of Hong Kong, does everything it can to block democratic reform. The Liberal Party is not liberal on social issues and also opposes democracy. It is in accord with the pan-democrat parties, however, in seeking to defenestrate Leung Chun-ying, the city’s current Chief Executive. The pan-democrat camp tends to splinter every so often, like a Roman candle.

8. The last few months have seen the pace of party formation accelerate, primarily under the banner of “localism” – a reaction, in large part, to the stalled delivery of democratic reforms. Polls suggest more and more Hongkongers view themselves solely as Hongkongers, and not as citizens of China.

9. Most localist groups adopt an openly hostile stance towards towards the Central government. The most radical call for full independence for Hong Kong, with some suggesting a period of transition involving return to British rule. It is unclear as to whether Britain has been party to discussions. The English names of localist parties – Demosisto and Youngspiration, for example – often sound like 1980s pop groups.

10. Controversially, six intended localist candidates have been disqualified from running for election, while localist organisations have had difficulty registering as companies. According to the Electoral Affairs Commission, arguing in favour of full autonomy for Hong Kong runs counter to the Basic Law.

All perfectly clear, now? As I thought…