XN000022-1991-04-27 — Page 5

SATURDAY, APRIL 27, 1991

ROBUST FINANCE STRATEGY PREPARES HK FOR FUTURE

HONG KONG CAN FACE THE FUTURE WITH SECRETARY, SIR PIERS JACOBS, TOLD THE BOARD OF GOVERNORS OF THE

AT ITS 24TH DEVELOPMENT BANK (ADB) CANADA YESTERDAY (FRIDAY).

SIR PIERS SAID HONG KONG'S BEEN FORMULATED TO ENSURE

WORLD

THAT IT UNCERTAINTIES ACCOMMODATE COMMITMENTS IN THE YEARS AHEAD.

CONFIDENCE, THE FINANCIAL

ANNUAL

MEETING

IN

ASIAN VANCOUVER,

STRATEGY FOR PUBLIC FINANCE HAS ONLY ΤΟ ROBUST ENOUGH NOT IS BUT ALSO TO MEET HONG KONG'S

1

EXTERNALLY-ORIENTED AND "WITH A SMALL ECONOMY WHICH IS HIGHLY

AND THUS EXTREMELY SUSCEPTIBLE TO FLUCTUATIONS IN THE WORLD ECONOMY,

WE ARE WITH LITTLE WE CAN DO TO ALTER THE COURSE OF EXTERNAL EVENTS,

PRUDENT MANAGEMENT OF OUR FINANCES IS ACUTELY CONSCIOUS THAT THE

DURING A PERIOD OF ALWAYS

PARTICULARLY OF CRITICAL IMPORTANCE,

THE PRESENT TIME," HE UNCERTAINTY SUCH AS THE ONE WE ARE FACING AT

SAID.

SIR

то

KONG'S HONG PIERS POINTED OUT

FUNDAMENTAL THAT

GROWTH RATE OF PUBLIC BUDGETARY STRATEGY IS THE PRINCIPLE THAT THE

ECONOMY AS EXPENDITURE SHOULD HAVE REGARD TO THE GROWTH RATE OF THE MEASURED BY THE GROWTH RATE OF THE GROSS DOMESTIC PRODUCT (GDP).

"IT IS, OF COURSE, NOT

RATES PRECISELY IN LINE WITH DESIRABLE TO DO 80.

"NEVERTHELESS,

ΤΟ PRACTICABLE

KEEP THE TWO GROWTH OTHER, EACH

NOR IS IT

NECESSARY OR

OUR AIM IS

TO

CONTROL PUBLIC

EXPENDITURE, OF YEARS,

PARTICULARLY RECURRENT EXPENDITURE, SO THAT, OVER A PERIOD

AND THE GROWTH RATE OF GDP THE GROWTH RATE OF PUBLIC EXPENDITURE REMAIN CLOSE TOGETHER.

TRENDS, AND IN THIS WAY, WITHOUT SUFFERING

"OUR EXPENDITURE PLANNING IS, THEREFORE, BASED ON NOT ON YEAR TO YEAR FLUCTUATIONS IN ECONOMIC PERFORMANCE. OUR EXPENDITURE PROGRAMMES CAN BE SENSIBLY MANAGED UNDULY FROM A STOP-GO CYCLE," HE SAID,

IS DETERMINED

FROM ANOTHER PERSPECTIVE, EXPENDITURE THE ECONOMY CAN AFFORD AND NOT SOLELY BY THE AMOUNT OF MONEY AVAILABLE, SIR PIERS SAID.

BY WHAT WE HAVE

APPROPRIATE TO ADD TO OUR "THEREFORE, SOMETIMES IT WILL BE

OTHER TIMES, IT RESERVES, AS WE HAVE BEEN DOING IN RECENT YEARS; AT

* HE ADDED. WILL BE APPROPRIATE TO DRAW ON THE RESERVES TO SOME EXTENT,

GOVERNMENT HAS SET FOR ANOTHER BUDGETARY GUIDELINE THAT THE ITSELF IS THE NEED TO MAINTAIN FISCAL RESERVES AT ADEQUATE LEVELS.

A

REASONABLE "OUR OBJECTIVE IS TO ACHIEVE NUMBER OF YEARS TOGETHER. THIS IN TURN REQUIRES A

SURPLUS TAKING CONSISTENT REVENUE

A

POLICY.

/"GENERALLY, WE