CONFIDENTIAL
5.
(7) End the moratorium on new bank licenses, and establish new forms of bank license, including limited banking licenses.
(8) Break up the larger banks by ordering them to divest themselves of subsidiaries,
(9) Require banks to publish information on non-residents' deposits, government deposits and foreign currency holdings. (10) Avoid 'ad-hocery' in reforming the banks and in future maintain a healthy distance from them.
(11) Encourage small manufacturers since they have the highest job/acre ratio.
(12) Quantify the costs and benefits of subsidies in land prices (which are given to encourage certain foreign firms).
(13) Concentrate on exports to Japan, particularly textiles. (14) Change the way of administering export quotas since it favours old established firms who are not necessarily the most efficient introdúce, in the long run, some form of quota auction.
(15)
(16)
(17)
Introduce more management training schemes.
Reassure investors about the security of assets after 1997.
More information is needed on capital flows in the B.O.P.. and on the performance of the domestic and financial sectors of the economy.
(18) More staff are needed for economic policy analysis.
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COMMENT: I am delighted it's what you have been saying for years. We deny absolutely that Hinkle and Boret were 'knobbled' before they commenced the report it wasn't necessary, because we were so sure of our ground. We are thankful for the economic theory in the report since it debunks many policies which we in the post criticised, and for the same reasons.
There is very little
6. I strongly endorse the report's recommendations. in it that can be used against our current proposals and recommend nothing more than that Hong Kong should be asked for a substantial comment on the report.
Mark Hull
Mark Hull
10 November 1977
Economists Department
CONFIDENTIAL
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