XN000022-1973-10-17 — Page 85

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Wednesday, October 17, 1973

grip of a world shortage of commodities and we can only hope that forecasts

of the easing of this trend will prove correct.

The main contribution the Government can make towards containing

inflationary trends is through its social policies: cheap subsidised housing

for those least able to afford commercial rents, and the control of rents

themselves; free primary education, and heavily subsidised secondary and

tertiary education; social services and relief for the handicapped and

destitute, and charges for medical care which are so subsidised as to

be almost free.

Inevitably the rise in prices will tend to put pressure on wages.

In considering the effect on our competitive position, what has happened

elsewhere is relevant; and you will appreciate that our competitors have

not been confronted with the same rise in prices of perishable foodstuffe due

to climatic conditions that we have. It is true that the trend has sharply

increased recently, but a study of comparable figures elsewhere shows

that up to May, which is the last month for which we have a complete set,

the rate of inflation in Hong Kong was no worse than elsewhere and I refor

both to our competitors and our markets. This is not at all to say that

present prices here do not press hard upon the population, or that in the

last months the comparative trend may not have been against us.

―

Apart from rising prices two other major problems have beset the

economy during the past year. One has been international currency instability.

This has created many difficulties for our manufacturers and traders,

particularly since so much of our trade has always been transacted in US

dollars and sterling. I wish that it were possible for me to suggest that

international currency stability is near at hand, but it seems clear

/that

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