In today's world, "sovereign wealth funds" are very popular, which not only open up sources of public finances, but also promote the development of local industries - Singapore's Temasek, Norway's Global Pension, and Alaska's Permanent Fund are all successful examples.
In the past 30 years, 63 sovereign wealth funds have sprung up.
However, at a time when all parts of the world are making better use of fiscal surpluses, Hong Kong, which is sitting on US$441.7 billion in foreign exchange reserves but is mired in many social problems, is still debating the most basic question of "whether the Exchange Fund is a sovereign fund". The backwardness of public finance in Hong Kong.
The so-called sovereign fund generally refers to a cross-border investment fund established by a country or an economy. Since the fund invests with public funds, its investment income will also be used for public affairs expenditure, which is generally regarded as a longer-term and more profound investment fund. "Being richer for the people" means.
Hong Kong's fiscal reserves include "funds" such as the Exchange Fund, Land Fund, Future Fund, Capital Works Reserve Fund, and the Hong Kong Growth Portfolio. Hong Kong cannot use the word "sovereignty", otherwise it is "politically incorrect"; the second is that each fund must strictly abide by the "iron law of finance" and cannot be easily misappropriated.
However, in a substantive sense, the "sovereignty" in "sovereign funds" means that the government has fiscal sovereignty rather than political sovereignty. If the SAR government, which has always been financially independent, is limited by a name and abandons the pursuit of a more ideal public financial management, it will undoubtedly It's a blindfold.
Furthermore, as the economy develops rapidly, can the so-called "iron law of finance" not be reformed?
When governments around the world are actively exploring the infinite possibilities of public finance, shouldn't Hong Kong establish a "quasi-sovereign fund" that can truly be taken from and used by the people?
We try to find the answer for Hong Kong's public finance to get rid of passive defense from the stories of Exchange Fund, Future Fund and Hong Kong Growth Portfolio.
The details are published in the 331st issue of "Hong Kong 01" electronic weekly published on August 22, 2022.
Sovereign Fund.
1 | How far are we from the "sovereign wealth fund"?