We need talents

(Next Magazine, 2015/5/28, A002, Second Opinion, Andrew Work)

We need talents

Hong Kong, as Lord Palmerston famously declared, was “a barren rock with nary a house upon it.” We have transformed into a great world city by importing the essentials for survival: water, food, construction materials, power and above all, human capital. If we don’t learn how to better import people, our garden will wither and die.

Recent trips to Japan and Singapore show the choices before us in stark relief. Conversations with the intelligentsia in Japan are about the one in seven houses standing empty with no hope of rehabilitation or future occupancy. Inherited homes are not a windfall, but a curse as elderly inheritors struggle with demolition and disposal costs.

Reports are of peak price 140 million yen houses in posh Yokohama districts shedding 80 percent of its value yet left unsold. The government is considering a vacancy tax at six times the market value on residential properties to force owners to deal with them.

Municipalities compete, by handing out cash to families, to ‘steal’ people from each other. For the nation as a whole, this is a zero-sum game.

The antidote to low birthrate is, of course, immigration. But in Japan, accusing a politician of having hidden Korean or Chinese ancestry, hence divided loyalties, is an effective smear. The mass immigration that it would take to reverse population decline is not in the cards.

Indeed, importing talents is an alien concept to the Japanese. In a discussion at Setsunan University, the audience questioned the wisdom of Singapore’s immigration policy, wondering ‘wasn’t it ‘crowded’ with all those new arrivals.’ Switched-on Japanese, however, must be looking curiously at this city state that has, by all accounts, done well by mass immigration with its rising income. The Merlion City’s explicit policy to attract young, educated foreigners has been made possible by a government with no opposition, and a penchant for no-nonsense technocratic solutions for thorny issues. Even then, this policy has provoked a backlash that forced a rare change of policy direction by slowing immigrant intake.While Hong Kong has not exactly kept an open door for immigrants, it is relatively easy to get a visa if you have a job offer and a university degree. Obtaining permanent residence is a fairly painless process after seven years of continuous residence. However, an aging population means we still face a decline in our working population in just a couple of years.

This will handicap our ability to fund both the growing health care need for our aging population, and the education for a future workforce that must be increasingly productive as our neighbors catch up on us.Attracting – and keeping — talents is therefore vital for our competitiveness. We cannot reverse a drop in our work force by attracting billionaires alone. We must welcome middle-class immigrants, too. A lack of appropriate school places and soaring rent have discouraged new immigrants.Politically, immigration is a sensitive issue, especially when too many new arrivals come from the same place. Large groups are visible and scare those who feel either their jobs or welfare payments are under threat.

In this, places like Singapore and Canada seem to have gotten it right by attracting (or allowing) a mix of people from different parts of the world. In a perfect world, free movement of people would allow everyone to go where their dreams – and best economic potential – could be realized. In reality, people’s fears must be addressed, if not indulged, so as to allow for maximum freedom. That means smart choices made through a honest and transparent democratic process. Hong Kong shares the fears that most nations, rich or poor, have about too many immigrants. Add to these the fears about economic and political dominance from our most natural source of immigrants, China, and we have a potent challenge on our hands. However, if we do not get smart about more people movement freedom, we may find ourselves in a position of declining affluence right when we need it the most.

Andrew Work

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