(CPJ/IFEX) – The continued vitality of Hong Kong as an international financial centre will depend on an unhindered free press, United States of America Deputy Treasury Secretary Lawrence H. Summers told a public forum on 23 September 1997, held in conjunction with the World Bank/International Monetary Fund annual meetings in Hong Kong. “Hong Kong has […]
(CPJ/IFEX) – The continued vitality of Hong Kong as an
international financial centre will depend on an unhindered free
press, United States of America Deputy Treasury Secretary
Lawrence H. Summers told a public forum on 23 September 1997,
held in conjunction with the World Bank/International Monetary
Fund annual meetings in Hong Kong.
“Hong Kong has an enormous chance to continue to prosper as it
has as a financial center, but its success will depend critically
on the sense that any and all information can flow freely and
accurately, whether it is convenient or whether it is
inconvenient,” Summers said.
Summers spoke at a forum on “Freedom of Information and Global
Financial Markets” organized by the Committee to Protect
Journalists (CPJ). In addition to Summers, leading bankers,
financial journalists and World Bank officials examined the role
of a free press in economic development in Asia and emerging
markets elsewhere in the world.
“In a real sense the central product of a modern economy is
information and, of course, journalists are on the front line in
the production of information,” Summers said. “A free and
undisturbed press is important because that is the vehicle
through which information is conveyed, and once conveyed, is
trusted. Information is at the center of what makes financial
markets work,” he said.
Mark Malloch Brown, vice president for external affairs of the
World Bank, said he was attending the forum as a statement of
support for the CPJ and efforts to promote greater freedom of
information in developing economies. “The bank is squarely on the
side of free flow of information,” he said.
“There are a number of countries in Asia who have toyed with
trying to limit the flow of information to their own financial
traders and who have painfully learned that it doesn’t work. It
puts their whole financial services industry at a disadvantage,
which proves very expensive,” Brown said.
Brown also argued that removing restrictions on financial and
economic information in developing nations soon leads to greater
freedom of information for an entire society. “This is a door
that once open, opens all the way.”
David C. Mulford, vice chairman of Credit Suisse First Boston and
former U.S. Undersecretary of the Treasury, said governments must
do more to provide access to detailed economic and financial
data. He said that developing countries such as China that
restrict access to information should not expect economic support
from industrialized nations in times of financial crisis.
“Information of good quality, that is accurate and that is
usable, increasingly, on a worldwide level, promotes the
efficient functioning of our markets,” said Mulford. “My own view
is that whether that information is positive or negative, in the
long run it is in the interests of the market to have it and it
is in the interests of those who want to use markets to provide
it.”
CPJ Executive Director William A. Orme, Jr. noted that business
journalists are increasingly at risk in emerging markets. The
governments of both Singapore and China, he said, have prosecuted
journalists as criminals for publishing accurate but unofficial
trade statistics, while the governments of Panama, Argentina,
Romania, and Vietnam have threatened reporters for their accounts
of local banking irregularities.
“If you do not wish to have a free flow of information, you will
pay a price,” said Karen Elliott House, president/international
of Dow Jones & Company. House, who supervises publications in
Asia that have had repeated run-ins with the leaders of Singapore
and Malaysia, said, “If you wish to be part of the global economy
then your people have to have access to the same information as
the rest of the world.”
Jim Rohwer, the Asia editor of “Fortune” magazine, noted that
while most bankers and investors endorsed the principle of a free
flow of information, in practice many often benefit from
restrictions on information. “There will always be those who
profit” from privileged access to confidential information, he
said, while major financial markets cannot flourish in an
atmosphere of censorship and rampant insider trading. Rohwer
noted that Hong Kong’s vibrant press has given it a competitive
advantage over its more restrictive neighbours as an Asian
financial center. “As long as China keeps its hands off the Hong
Kong press, places like Singapore and Malaysia will not have a
chance to get that business.”
The forum on freedom of information and financial markets was
prompted by the World Bank Group/International Monetary Fund
annual meetings in Hong Kong, which are taking place less than
three months after the 1 July handover of the former British
colony to China. During the transition period, considerable
attention has been focused on the interaction between Hong Kong’s
financial markets and the fact that it has become the Asian hub
for both the regional and international press.
CPJ prepared a report assessing the state of press freedom in
Hong Kong since the handover and was to release it at a press
roundtable in Hong Kong on 24 September.
Under the principle of “One Country, Two Systems,” China has
pledged to allow Hong Kong to continue to have a free press and
other civil liberties not found in China. Many observers see Hong
Kong’s future inextricably linked to Beijing’s willingness to
tolerate a critical press within what is now a province of China.
As well, U.S. Treasury Secretary Robert Rubin has said, “I think
Hong Kong can and will remain a major market center — as long as
Hong Kong continues to have the free flow of information and the
rule of law.”
The unfolding Asian currency crisis has shown again that timely
access to financial data and transparency in markets is vital to
the continued health of developing economies. With Southeast
Asian markets shuddering under the sudden weight of currency
devaluation and plunging stock markets, a free flow of financial
and political information will be crucial if investors are to
regain confidence in Asian economies. The CPJ forum was designed
to further discussion inside the financial community on the
positive role that freedom of information plays in the
development of prosperous economies.
For further information, contact CPJ, 330 Sevent
