2
CONFIDENTIAL
2. 1977 saw further and rapid progress in Hong Kong's social programmes and legislation, in economic conditions that were comparatively good-real growth in the Gross Domestic Product was 12 per cent in spite of a growth of only 5 per cent in exports. This growth was largely sustained by unexpectedly strong domestic activity, particularly in the construction industry.
3. The end of the year was darkened by the prolonged and bitter textile negotiations with the EEC, and by a near-mutiny in the Police. Hong Kong has come through these difficulties with remarkably little loss of confidence. The trend towards more pragmatic government in China and the demonstrably good relations between Her Majesty's Government and China over Hong Kong, have helped. So too has a slight upturn in exports at the turn of the year. A Hong Kong fearful of China, or of its end of year accounts might not have got over this difficult ground so easily so far.
4. I will return to the Police and to the EEC negotiations, but the main, if less newsworthy, and I hope less ephemeral, feature of the year, has been the rapid progress made on the social and domestic fronts. These can be summarised as follows:-
(a) A greater volume of more substantial labour legislation was enacted or implemented than in any previous year of Hong Kong's history. The fields covered included holidays with pay, sickness benefit, severance pay, protection of wages, workmen's compensation and four major sets of industrial safety regulations. The exclusion of able-bodied un- employed from eligibility for public assistance was cancelled.
(b) Universal free and compulsory secondary education was announced. It will become universal and free as from this Autumn, and will be made compulsory one year later, when the employment of children under 15 years of age will also be prohibited. To implement this programme 52 schools have been completed or will be completed this year, and 34 more will be completed by 1981.
(c) With the help of a UK expert, a complete review of the social welfare arrangements introduced in 1973 was undertaken under the three headings of payments (i.e. social security), services to the elderly, and services to youth, and Green Papers were published on each. These complemented an earlier review of services for the handicapped whose findings were finalised in a White Paper in the Autumn. These reviews covered all aspects of social welfare and its administration. The Government is assuming that all recommendations will be adopted and has written into the new Budget and the three-year expenditure forecasts the additional $800 million over the next four years which they involve. Though the proposals for the handicapped were the most complicated, and probably have the widest long-term implica- tions, the proposal in the Green Papers which has attracted most attention has been a semi-compulsory contributory scheme to provide sickness, death and retirement benefits, and possibly mortgage facilities.
(d) The housing programme has reached a stage at which building contracts have already been let which will produce housing for over 250,000 people in a single year (1979/80). A long pipeline of planned and timed resumptions, clearances, site formations, provision of services, and lettings of piling and building contracts ensures that this figure will be maintained each year for the subsequent five years. These years will at last drastically change the demographic map and housing standards of Hong Kong.
(e) Construction of 40,000 Government flats for sale under a Government Home Ownership Scheme has started. The special terms offered are
CONFIDENTIAL
No comments yet.
Private notes are available after approval.