Hong Kong is undeniably one of the greatest free market experiments in Asia. It is certainly not a 100% free market economy, but it is one of the freest, if not the freest and most capitalistic, economies in the world. Despite imposing limited restrictions and regulations (such as limited restrictions on foreign ownership of land), which technically make Hong Kong a mixed economy with a higher degree of economic freedom, the HK government has the most liberalized investment policies in Asia, enticing local and foreign investors to put up businesses and provide jobs. Its success led to economic surplus and job surplus, allowing it to offer employment and countless of opportunities to expats from its Asian neighbors, particularly the Philippines. This is why Hong Kong, which is way smaller than Cavite, is one of the richest and most stable economies in Asia.
This Chinese territory’s s free market experiment proves that limited natural resource is not an obstacle to economic success. It is higher degree of economic freedom, which fosters ingenuity, resourcefulness, foreign involvement, productiveness and innovation, that made Hong Kong prosperous and become China’s ‘golden goose’. This is why China would never let go of Hong Kong, and that it didn’t force Hong Kong to adopt communism after reacquiring it from Great Britain in 1997.
Forget about the “racist” and “ethnocentric” Hong Kong nationals. The truth is, they actually share the mediocre, close-minded nationalistic sentiments and ethnocentric mentality of the leftists and protectionists in the Philippines.
Now here are some factual, realistic observations Hong Kong’s free market experiment can teach Filipinos about politics and economics:
- Philippine’s so-called “rich” natural resource is NOTHING– or has no economic, scientific or even social value– without economic freedom. Unless you expect your state-subsidized leftist academics to produce our very own inventors, scientists, technical experts and industrialists (who would be wiling to stay) within the next 5 to 10 years. Who worked for Marcos’s multi-billion dollar BNPP? They were foreign scientists and experts, not Filipinos! That strategy is called “producing things with American brain and using Filipino (borrowed) money”. It’s the same as building cities and skyscrapers with “British brain but using Chinese money”.
- Levying customs tariff on imports and exports won’t help the Filipino poor or our ailing economy. This is actually one of the biggest scams produced and popularized by our very own statist economists and state-funded institutions. HK’s free port does not impose any customs tariff on imports and exports. This is why Hong Kong attracts multi-billion dollar investments and has a booming tourism industry. Good economic policies has good economic consequences. By the way, the PH government’s centralized importation of rice (under the DA and NFA) and other goods is as stupid and socially, economically destructive as its planners and proponents in the academia. It actually hurts mostly poor Filipinos, including the country’s middle class, who were tricked into believing that this mediocre policy would help the poor and our own industries and agriculture sector. Indeed, ignorance is bliss.
- Hong Kong has a relatively limited government and less role in its economy compared to the Philippines and other poor Asian countries. Limited government means less bureaucracy or bureaucratic gridlock, which causes corruption, bribery, poor public services, incompetence and abuse of power. One good example of this is the $30 million MRT extort case that implicates people close to the president and other government officials.
- More taxes and higher tax rates do not necessarily lead to higher tax revenue collection and economic success. Know the concept of Laffer curve. At present, Hong Kong applies low and simple tax regime. Despite levying 15% salaries tax (the equivalent of our income tax) and property tax, HK government does not impose sales tax or VAT, withholding tax, tax on dividends and estate tax. The Philippine government wants to help the poor? Well, it should start simplifying our tax code, scrapping certain taxes, and drafting a flat tax system.
- Type of government or administration (e.g., presidential or parliamentary) is not the ‘base’ or ’cause’ of economic success. HK’s free market experiment proves that the ‘base’ of prosperity is limited government and economic freedom.