XN000022-1988-04-21 — Page 5

4

THURSDAY, APRIL 21, 1988

DR SOHMEN SAID THAT WHILE THERE WAS A SERIOUS LABOUR SHORTAGE, HONG KONG IN THE MEANTIME KEPT ABOUT 10,000 VIETNAMESE REFUGEES IN CLOSED CENTRES AT A COST OF $1 BILLION OVER THE LAST FIVE YEARS. AND HONG KONG REFUSED THE SELECTIVE IMPORTATION OF FOREIGN LABOUR BECAUSE OF FEARS OF SOCIAL CONSEQUENCE.

ΤΟ

"THE ADMINISTRATION IS STILL NOT KEEN ON A MORE WIDESPREAD INTERCHANGE OF PERSONNEL BETWEEN GOVERNMENT AND THE PRIVATE SECTOR CREATE MORE FLEXIBILITY, SUCH AS I HAVE REPEATEDLY RECOMMENDED, SAID.

HE

BUT

HE ADDED THAT INSTEAD OF SHOWING IRRITATION AT THE RISING NOT SURPRISING INCLINATION OF CIVIL SERVANTS TO CONSIDER FILLING THE MANY VACANCIES IN THE COMMERCIAL ARENA, THE GOVERNMENT SHOULD MAKE A VIRTUE OUT OF THE NECESSITY TO ATTRACT LOCAL EXPERTISE INTO THE CIVIL SERVICE, AT LEAST FOR TEMPORARY PERIODS.

**

THIS MIGHT ALSO HELP TO OVERCOME THE "GOVERNMENT BY CONSULTANCY WHICH HONG KONG WHICH WAS ALSO QUITE EXPENSIVE, HE SAID.

INCREASING INCIDENCE OF WAS NOW WITNESSING AND

DR SOHMEN ALSO QUERIED WHY PRACTICALLY ALL MAJOR POLICY DECISIONS NOW HAD TO BE PRECEDED BY OUTSIDE CONSULTANCY STUDIES.

REFERRING TO THE PROBLEM WHICH THE U.S. TAX REFORM ACT 1986 POSED FOR HONG KONG-BASED SHIPOWNERS, DR SOHMEN SAID THE TECHNICAL QUESTION WAS WHETHER THE GOVERNMENT WAS WILLING TO EXCHANGE A RELATIVELY INSIGNIFICANT SOURCE OF REVENUE FROM THE TAX ON U.S. SHIPS LOADING IN HONG KONG HARBOUR, AGAINST AN AMERICAN EXEMPTION FOR FREIGHT TAXES ON HONG KONG-REGISTERED AND/OR HONG KONG-BENEFICIALLY OWNED VESSELS TRADING TO U.S. PORTS.

THE MORE FUNDAMENTAL QUESTION WAS WHETHER THE GOVERNMENT WAS WILLING TO CONSIDER THE SHIPPING INDUSTRY AS ONE DIFFERENT ENOUGH TO MAKE CERTAIN ALLOWANCES WHICH RECOGNISED ITS INTERNATIONAL CHARACTER AND MOBILITY, AS WELL AS THE RCONOMIC AND FISCAL CONTRIBUTION A STRONG SHIPPING ESTABLISHMENT AT LEAST INDIRECTLY MADE TO HONG KONG.

HE SAID THAT IF THE ANSWER TO THESE QUESTIONS TURNED OUT TO BE IN THE NEGATIVE, HE BELIEVED THAT ANY ENTHUSIASM NOT ONLY FOR THE HONG KONG SHIPPING REGISTER BUT FOR THE TERRITORY AS A PLACE OF OPERATIONS FOR SHIPOWNING AND SUIP MANAGEMENT WOULD QUICKLY DISSIPATE.

"I CAN ONLY STRONGLY URGE THE GOVERNMENT YET AGAIN TO WEIGH ALL FACTORS IN THE BALANCE AND RITHER SEEK AN ACCOMMODATION WITH THE AMERICANS, OR TO TAKE THE UNILATERAL ACTION OPEN TO IT BY REMOVING THE TAX ON FOREIGN SHIP'S IN THE PORT HERE WHICH WOULD ACHIEVE THE SAME RESULT WITHOUT THE NEED FOR THE FEARED COMPLICATIONS OF A TAX AGREEMENT, HE SAID.

44

ON AIR SERVICES, DR SOHMEN SAID HE BELIEVED THAT RESPONSIBLE FOR THE DELAYS IN THE PLANNING AND CONSTRUCTION REPLACEMENT AIRPORT WOULD BE HELD TO TASK AT THE LATEST BY 1993 RUNWAY CAPACITY LIMITS WOULD BE REACHED AT KAI TAK.

THOSE OF A

WHEN

/"LIKE THE