Hong Kong’s Crisis of Governability

Updated August 14, 2013, 4:44 p.m. ET

Hong Kong’s Crisis of Governability

Lack of democracy turns a kerfuffle into an uproar.

Tensions are running high in Hong Kong as the government dithers over how to implement full democracy by 2017. A coalition of citizen activists promises a showdown in the streets of the business district next summer if the promise to elect the chief executive by universal suffrage is not kept. One sign of just how acrimonious the city’s crisis of legitimacy could become is the way a minor dispute over a teacher’s foul-mouthed tirade against a policeman has become a tug-of-war between pro-Beijing and pro-democracy forces.Primary school teacher Alpais Lam buttonholed an officer last month during a stand-off between protesters from the Falun Gong religious movement and opponents. Ms. Lam was caught on video shouting obscenities at the police as they tried to calm tensions on a crowded shopping street. The teacher was initially criticized for using language unbecoming someone in her position, for which she apologized.

But her complaint that the police were unduly hard on members of Falun Gong, a religion outlawed in mainland China, struck a nerve with the public. Meanwhile officers seemed unwilling to control representatives of the sometimes violent Hong Kong Youth Care Association, an anti-Falun Gong group. That tapped into Hong Kongers’ growing fear that their supposedly autonomous government is ever more beholden to Beijing and has undermined police impartiality.

On August 4, supporters of the police gathered to protest Ms. Lam’s actions, and were met by pro-democracy counter-protesters. Former police Superintendent Gregory Lau, who participated in the rally, complained to the South China Morning Post of the stress faced by police officers caught in the political crossfire. That event became the subject of a debate in its own right, since officers are not allowed to participate in political rallies.

The police department ruled the event was not “political” under the meaning of the regulation, but appearances matter as much as technical adherence to the rules. Mr. Lau and others said they shouldn’t be bound by them anyway because they are on “near-retirement leave,” meaning they have surrendered their badges but still are technically on the police force.

This week Chief Executive Leung Chun-ying aggravated the situation when he weighed in on the side of the police. He also called for a further investigation of Ms. Lam by the territory’s education department, an unprecedented move targeting an individual teacher.

Mr. Leung was selected last year by a Beijing-approved committee of 1,200 and his administration’s approval ratings have already fallen below 20%, in part due to his perceived ties to Beijing. His effort to stifle pro-democracy dissent will only deepen mistrust of him and government institutions under his control.

Beijing clearly fears that universal suffrage will make the territory uncontrollable. But the hybrid form of government it is trying to maintain will make Hong Kong ungovernable. As the ongoing clash between supporters of Ms. Lam and the police shows, it is a society on edge where the smallest dispute threatens to escalate and corrode the public trust.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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