CONFIDENTIAL

Corruption

11.

The Anti-Corruption Commission has been set up but is not

yet in operation. It is too early to say what success it will

have. The men at the top of the Commission are able and determined

but neither they nor the Governor have any illusions about the

size of the problem.

Urban Council

12.

I think the Governor somewhat overstates the success of the

reorganisation. Members of the Council who visited Britain and

others in Hong Kong have expressed dissatisfaction with their

declining role, particularly in the housing field. The Urban

Council are jealous of their position as the sole partly-elected

body in the colony, while the members of Executive and Legislative

Councils are apt to look down on them as a talking shop. The

conflict remains unresolved.

Reform of the Machinery of Government

13.

What I think the Governor is hinting at is that senior

officers, particularly perhaps the Financial Secretary, have been

unwilling to follow through the McKinsey reorganisation and to

delegate authority down the newly-constructed chain. This criticism

is almost certainly true. It is a matter of personalities and is

unlikely to be resolved quickly.

Popular Attitudes to Government

14. This is the crux of the problem of Government inside Hong

Kong - how to involve the local population in the actions and

decisions of Government without representative institutions;

dictatorial government on Singapore lines; and without a sense

of nationhood for the future. At the moment it is still true that

without

/almost

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