Mannkal Economic Education Foundation

Mannkal Student Internship Blog

LRI

Bayley Novakovic – Revisiting Positive Non-Intervention | Week 7

Bayley Novakovic, 20 February 2017

The history of Hong Kong’s “positive non-intervention” made its reappearance this week with Laurence Pak (LRI Director of Operations) giving a speech at a TEDx event.

The event was at an international school and Laurence’s speech covered much of the lessons he gave me early on in my internship here at the Lion Rock Institute.

The TEDx event not only covered economics or politics but a range of topics from students and various leaders in Hong Kong.

Thus, it was great to see Laurence’s speech receive applause not only at the end as to be expected, but also midway through; the only speaker on the night to achieve this! Hopefully the crowd’s response reflects a widespread enthusiasm among the younger generation for freedom!

Laurence delivering his speech

Positive non-intervention continued to feature this week as I partook in a meeting with LRI Chairman Nicholas Sallnow-Smith. Today’s government of Hong Kong is casting aside positive non-intervention as “irrelevant” and as such much discussion during the meeting focused on progressing free market solutions in face of greater public policy interventions.

Mr Sallnow-Smith also outlined the next steps for my completed Electronic Road Pricing report in engaging with the public and key decision makers; further serving as a lesson for me on how to best engage in the public policy arena.

Working on some positive non-intervention!

Over the weekend I further explored South Island’s art scene. There are some bizarre exhibitions, the last resulting in me wearing a virtual reality headset while holding an artichoke!

South Island views

Also over the weekend I was fortunate enough to join in on a casual meet-up of local entrepreneurs. Everyone had their own angle from transport applications to boutique green tea exports. This is what I love about Hong Kong; with the city so highly interconnected you can get involved in something new at a moments notice!

Bayley Novakovic – When the referee becomes a player | Week 6

Bayley Novakovic, 13 February 2017

What is the importance of the rule of law in supporting economic freedom? Lawyer and long-time Hong Kong resident Stephen Crosswell gave a speech on this question at a dinner event last night.

He covered interesting aspects of law from common themes of independent judiciary to less common thoughts such as the actual source of law. Should it come from legislators or be developed in the courts?

Even though not trained in law myself it was an interesting and accessible address.

Stephen Crosswell presents his speech

Meeting and socialising with other attendees at the LRI event was most enjoyable. With every person I met came a unique and interesting conversation, being surrounded by people of such caliber is truly inspirational!

I was lucky enough to sit next to an individual very knowledgeable on the topic of expanding compliance requirements in the financial sector. His colourful firsthand accounts of the consequences of this regulatory expansion have re-affirmed the value of my research on this topic.

Dinner with outstanding company at the LRI rule of law event

This week I also visited the Science Park, one of the government’s multi-billion dollar efforts to make Hong Kong a center of tech and innovation.

Tax payer’s money is funneled into free accommodation and services for supposedly “innovative” private ventures; I was underwhelmed during my visit. Absent was the genuine hustle to be found in a real marketplace such as the central area in Hong Kong.

Chasing some legitimate innovation I attended a Bitcoin (alternative currency) meet-up and had a look at one of Asia’s early Bitcoin ATMs. Ironically neither was in the designated center of innovation, the Science Park.

Bitcoin ATM - innovation outside of "the plan"?

Another stark contrast of the government becoming a player in the market as opposed to being the referee; my discovery of the art scene on Hong Kong Island’s south side over the weekend.

I visited a number of commercial art galleries including a very edgy contemporary exhibition by Chinese artists. The exhibition “attempts to reveal the complex political tension between ideological control and the expression of individual will” through the medium of dance and physical expression.

The engaging works on display ranged from pleasantly thought provoking to chilling and disturbing, fitting, considering the theme of the exhibition.

These private commercial Art galleries should serve as a lesson to back home where any cuts to arts funding sparks outrage. After also visiting one of the relatively uninspiring government designated art and design centers, I can personally say I prefer the government to abstain from being a player in my own art experience!

Commercial galleries make use of old industrial areas

Bayley Novakovic – Just another tax | Week 5

Bayley Novakovic, 6 February 2017

Back in the LRI office after the Chinese New Year long weekend, I was back to work again on my Electronic Road Pricing (ERP) report.

Having submitted the report to the LRI board last week I received constructive feedback and have been giving the report a reworking. This week I was able to pull up data that I had previously overlooked.

The data from GPS navigation companies clearly shows that cities that have implemented ERP have experienced no long term benefits. Extra time traveled during peak hours relative to free-flow traffic situations has stayed more or less the same. The data also shows that the “time premium” a commuter must pay to drive during peak hours in ERP cities is the same as that in comparative cities that do not have ERP.

It has become apparent that ERP would be just another tax for Hong Kong commuters. With ERP implemented commuters would be charged to slowly traverse congested roads instead of only paying with their time.

The LRI hosted another small meeting this week, making further arrangements in developing a scholarship program. The program will send Hong Kong students abroad to intern at free market think tanks. It is great to see the LRI further expanding international efforts to expose students to free market ideas and libertarian ideals.

With the relentless hustle and bustle of Hong Kong, it is great to take advantage of the tranquility to be found in the city. Whether it be discovering a quiet shrine a little way up the peak or simply opting to take the tram to work instead of rushing through the MTR (subway), it’s easy to catch a breath!

Hong Kong's Trams

Incense burning at a hidden shrine

Bayley Novakovic – Chinese New Year | Week 4

Bayley Novakovic, 30 January 2017

With the Chinese New Year celebrations underway, my fourth week at the Lion Rock Institute ended attending an event on public housing policy. The Chatham House rule meeting was a debate among top stakeholders in the industry including public officials, economists, think tanks and the private sector. I was given the task of taking notes to be used in compiling a report for all stakeholders of the meeting.

The debate was really interesting as those attending were not limited to only free market advocates. This led to a well balanced discussion. I came away having learned much more about the issues and possible solutions to Hong Kong’s public housing difficulties.

Year of the Rooster begins tomorrow

This week I also started a side project looking into a widely reported problem that SME and startups are having difficulties in opening a bank account here in Hong Kong. To establish if this is a problem unique to Hong Kong I contacted local firms and professionals to gain a consensus. Word on the street is that this is a serious issue here, more so then in other global finance centers.

Banks have cited new global regulations to fight money laundering and terrorist financing as the source of this issue. Reading up on regulations has been eye opening to see the regulatory risks banks face in simply opening a new account. However, my research continues to identify any regulation unique to Hong Kong that is creating a barrier to obtaining banking services.

It is not irregular to see political activists set up stands in busy shopping precincts and with microphone in hand address those walking by. Some of these are very radical and it is a testament to Hong Kong’s strong freedom of speech that they are not shut down! On a more conservative note, my new friend Laurence and I enjoyed lunch at a trendy Japanese bar midweek. With conversation ranging from the contemporary politics and markets to personal banter, it’s the little experiences like these that really make you feel part of Hong Kong!

Lunch with friends

Street politics

As the New Year long weekend kicks off it’s a great time to reflect on the first half of my time here at the Lion Rock Institute. I cannot thank Ron Manners and everyone at the Mannkal Foundation enough for the opportunity to be here. The Mannkal scholarship has been truly enriching experience and I look forwards to another four weeks at the Lion Rock Institute!

Bayley Novakovic – Politics heat up as the election race begins | Week 3

Bayley Novakovic, 23 January 2017

This week has been most eventful for Hong Kong politics, with two more candidates formally announcing their bid for Hong Kong government’s top job of Chief Executive, bringing the race from two running and two assumed to four candidates formally running.

My next project at the Lion Rock Institute is to analyse the economic policy of those contending for Chief Executive, with the successful candidate leading the government of Hong Kong from July this year. While it was assumed both John Tsang and Carrie Lam would run for Chief Executive, their public announcements this week had significant importance as they are seen as the two most likely candidates to win the election.

Neither outlined their economic policy initiatives during their announcement speeches so my research has been limited to analysing the history of both candidates. They are included alongside Regina IP and Woo Kwok-hing who are also running. John Tsang with his celebrity-like status here in Hong Kong, was until last month the Financial Secretary and is the candidate who is closest to LRI’s mandate of free market public policy

John Tsang - The election race begins!

One of the most astounding factors of the government here in Hong Kong is that as written in the constitution, the government is to run a balanced budget. Despite having one of the lowest income taxes in the world at 15% and no tax on dividends or capital gains, the surplus is large enough that it could continue to operate without taking on new debt or collecting a single dollar in taxes for two years! In contrast to the norm of unsustainable fiscal policies and burgeoning government debt, Hong Kong leads the way on responsible government budgets!

I was fortunate enough this week to have lunch with Bill Stacey, board member and one of Lion Rock’s directors. It was great to hear Mr. Stacey’s perspective and insights on finance, economics and business in the Asian region. This brings me to one of the best points about interning at the Lion Rock Institute and living in Hong Kong; every week you can count on meeting the most interesting and thought provoking people!

Over the weekend I enjoyed a day trip with Lion Rock alumni Wilson Li to Macau, one hour jet-boat from Hong Kong. While neither of us was selfless enough to make a donation to the casinos (gamble), we did see some tourist attractions and indulge in the best coffee in Macau! Walking the streets and observing everyday life and business was what I enjoyed most of visiting Macau. Known as the Vegas of Asia, the former Portuguese colony is also rich in its own unique Asian-Euro fusion of culture!

Jet Boats to Macau!

Macau's best coffee in great company

Sights in the former Portuguese colony

Bayley Novakovic – A lesson in positive non-intervention! | Week 2

Bayley Novakovic, 16 January 2017

With my second week at the Lion Rock Institute underway, my work on analysing the proposed electronic road-pricing scheme continues. My research has moved from an international perspective to a local focus, analysing traffic statistics and identifying causes of traffic congestion unique to Hong Kong.

This week I also learnt much about Hong Kong’s history of positive non-intervention. When Hong Kong was taken as a British colony at the end of the opium wars Englishman Henry Pottinger laid down three ground rules. They were; no direct taxes, open port with no restrictions on trade (even with enemies of the state) and respect for local customs.

These conditions led to revolutionary and founder of modern China Dr Sun Yat Sen choosing Hong Kong as his financial base while he gathered support to topple the Quing dynasty and set China on the path of industrialism. I was able to visit a museum dedicated to Dr Sun Yat Sen. It illustrated his fascinating story and really showed how Hong Kong’s openness has historically played a role in the history of greater China.

Making the most of the clear weather over the weekend I was lucky enough to enjoy a hike around Hong Kong’s iconic peak overlooking the city. I was joined by my friend Neil who was passing through. With tourists crowding for the tram Neil and I instead opted to hike our way up which was a much more rewarding experience! Throughout our trek up we enjoyed lively conversation ranging from entrepreneurial thought to Ayn Rand’s Atlas Shrugged before reaching the peak and being rewarded with the most amazing view of Hong Kong!

Trekking the Peak

The best views in town!

The revolutionary

Bayley Novakovic – Welcome to Hong Kong | Week 1

Bayley Novakovic, 9 January 2017

Stepping into the streets of Hong Kong for the first time is an experience I will never forget! The fact this global city is open for business is immediately on display with commerce carried out as far as the eye can see. The energy and sheer density of people is far greater than that experienced in Perth! Known as the city where East meets West, it is also the city where the new co-exists with the old. Modern skyscrapers stand next to heritage buildings that give way to street vendors below, selling traditional Cantonese cuisine along streets where vintage trams share the road with the latest luxury cars.

My first week at the Lion Rock Institute has been both informative and thought provoking. Upon meeting full time Lion Rock staffer Laurence Pak, we discussed many of the challenges Hong Kong faces and the effect of public economic policy on these issues. One such issue is traffic congestion in the central business district.

The government is planning to introduce an electronic road pricing system to charge road users during peak periods. My first task has been to evaluate similar systems implemented in other global cities and consider whether such a system would be suitable for Hong Kong. Questions arise as to whether pricing peak road usage may cause further problems such as overloading of public transport.

With Hong Kong heralded as one of the most free markets in the world, my first week at the Lion Rock Institute has given me a greater understanding of how small government and minimal market intervention played a role in this achievement. I have seen firsthand the importance of the work Lion Rock does, in both safeguarding Hong Kong’s free market status and pursuing new heights for this bustling mega metropolis!

Starting at the Lion Rock Institute

Hong Kong's skyscraper studded skyline

LRI office views

Andrew Thomson – Week 5

Andrew Thomson, 3 August 2016

I have been at the Lion Rock Institute for five weeks now and it has gone way too fast for my liking, which still surprised me despite numerous people warning me that this would happen. Next week Laurence and Andrew will be presenting the Public Housing Exchange Scheme to the Lion Rock Institute board so my main job this week was to iron out any flaws in the proposal. We also threw a small event at the office inviting most of the previous LRI interns and a few members of the board. The Chairman of the LRI board Nick Sallnow-Smith was there and I had the chance to talk to him about his experiences working in Hong Kong and my internship at LRI.  It was definitely a fun night filled with good pizza, strange Hong Kong deserts (like pineapple buns) and interesting people who each had a funny Andrew Shuen story.

I was sad to leave Hong Kong as I have had such a great time and made so many new friends. It was particularly hard to say goodbye to the people at LRI like Laurence and Andrew as they have treated me extremely well and taught me so many important lessons. For example, how if a policy is outside the the window of policy possibilities then it won’t be implemented or how Pokemon Go seems to have been more successful in getting people exercising outside then several Hong Kong government initiatives.

I’m extremely grateful for this opportunity given to me by the Mannkal Foundation, big thanks goes to Paul and everyone at the Mannkal team for all their hard work organising this internship. It has been without a shadow of a doubt a worthwhile experience which has changed my view of the world and left me a more rounded person then I was before I left.

Andrew Thomson – Week 4

Andrew Thomson, 25 July 2016

It has been an interesting week to say the least, we had a Brexit panel discussion in Hong Kong, a failed coup in Turkey and the Republican Convention in the states. I’m still surprised by how many events that occur in far away places like Turkey and the United States affect local markets in Hong Kong. We hosted a Panel discussion and dinner on Wednesday which was interesting to say the least. We welcomed guest speaker Professor Paque, a liberal economist and former Saxony Finance minister who spoke a few words in favour of Britain remaining with the EU. It got heated at one point where the Remain speaker Professor Paque got into an argument with a Leave member of the audience. The Leave member kept going on about EU regulations of lightbulbs, of all things, I had to agree that the EU excessively regulates though I’m not completely convinced that leaving the EU was the best option. I found it very interesting to hear the different perspectives of Professor Paque, Andrew Shuen and Bill Stacey as well as various members of the audience. It was a great opportunity to meet students, expats and various members of Hong Kong’s financial industry. I also had the chance to talk with Bill Stacey, a board member of both the Mannkal Foundation and Lion Rock Institute.

Back at the Institute I was given the job of making an advertisement to promote the Public Housing Exchange Scheme. I started on a script this week and found it was tough because I haven’t really done anything like this before. The script had to be engaging but something I could realistically film and produce.

This week my friend Rose from Australia came to Hong Kong on a university summer course, I had a lot of fun showing her around the night markets on Temple Street and eating some great Chinese street food.

It’s been a busy week but I still found time to hike the Dragon’s Back down to the beach, perhaps one of the best hikes in Hong Kong with it’s fantastic views over the southern part of Hong Kong Island. The beach for some reason was called ‘Big Wave Bay’ which was funny considering the water was as smooth as glass. It was a beautiful beach with some really great food stalls selling everything from cheeseburgers to grilled scallop skewers.

I have had another amazing week in Hong Kong filled with great experiences and interesting people, its hard to believe that I have already been here for a month! Big thanks go out to the Mannkal Team and the people at the Lion Rock Institute.

Andrew Thomson – Week 3

Andrew Thomson, 18 July 2016

It’s hard to believe that I have been here for three weeks, the time has gone ridiculously fast. This week I finished the proposal for the Public Housing Exchange Scheme, I found it to be a tricky task but learnt a lot about the most effective way to write proposals. The basic idea is too make it short and simple but retain all the necessary information. As Andrew Shuen says the key is to write it so an eleven year old can understand it. It took me eight attempts but I got it in the end. On a side note I had a very entertaining conversion with Andrew and Laurence about how Pokemon Go works, they were shocked by Nintendo’s stock increase and were wondering if it was going to come out in Hong Kong.

I was lucky enough to experience two different sides of Hong Kong this week. I was invited to a birthday party hosted by some expats I had met through friends that worked at Price Waterhouse Coopers. On another night a local friend showed me some of the local hangouts in Sham Shui Po and tried my hand at electronic darts, which my friend absolutely thrashed me at unfortunately.

The various political parties in Hong Kong have also begun their campaigns for the legislative elections in September; the general opinion at the LRI is that the people of Hong Kong are generally politically apathetic. This may be due to the impression that the Legislative and Executives councils are undermined by Beijing’s influence.

I took a day trip to Macau, a former Portuguese colony that was home to many stunning European style buildings and old churches. In my first week at the LRI I had been instructed in the historical and social development of Hong Kong, so I was very interested in learning how Macau had developed differently due to the Portuguese influence. Most exciting for me was visiting the Grand Prix Museum which showed many different Formula 1 cars and motorbikes.

It’s been a fun week and I’m looking forward to next week where the LRI will hold a Brexit Panel discussion and I will work on various ways to inform the public of our Public Housing Exchange Proposal.