Hong Kong - Hong Kong food banks see rise in business

Late afternoon is the busiest time at the food bank in the Shek Kip Mei public housing estate. That is when mothers, having collected their children from school, drop by on the way home to pick up ingredients for dinner – rice, tinned fish in black bean sauce, fresh pork if there is any, spam if there isn’t.

Mrs Chow, a widow with a son and daughter aged nine and 11, is among an increasing number of low-income earners who have started using the service in one of Hong Kong’s poorest neighbourhoods because rising inflation has stretched her already meagre income to the limit.

 “We eat less now because everything from fish to rice has gone up in price. We never eat out. In fact, we hardly ever do anything apart from going to work and school. As our one special treat this summer, I took them to the botanical and zoological garden, which is free,” the part-time domestic helper says sheepishly.

Food banks like the one in Shek Kip Mei, which is run by the local St James’ Settlement charity, are reporting growing demand – it has seen a 25 per cent increase in the number of people to around 1,500 a month collecting food handouts since the start of the year. There are now around 16 non-government organisations running food banks. Yet, the economy is booming. Gross domestic product is growing annually at more than 6 per cent and unemployment is at 3.2 per cent, the lowest level since 1998. Hong Kong saw the world’s fastest growth in the number of US dollar millionaires last year.

But the bulk of that wealth is in the hands of a few. Hong Kong has the highest income inequality among developed economies, based on a 2009 report by the United Nations Development Programme. One in five – or around 1.5m people – live below the poverty line as defined by households earning less than half the median income and that ratio is not expected to come down.

“The gulf between the rich and the poor is likely to get worse as the cost of doing business in Hong Kong has forced many businesses to move out. As a result, many back-office jobs, for example, have been relocated to mainland China. What’s left is mainly a range of high-end services such as finance and luxury retail – where mainland China has no advantage over Hong Kong, yet.

“Unemployment may be low, but many people who are not suited for those service industries have been forced to take up poorly paid, menial jobs,” says Paul Tang, Hong Kong economist at the Bank of East Asia.

The Hong Kong government, which overcame years of fierce opposition from the business lobby to introduce a minimum wage of HK$28 ($3.60) an hour this year, is planning to provide transport subsidies to poor households and has set up its own food banks in recent months. It is also in the process of distributing HK$6,000 to every resident, including the wealthiest, to help offset the effects of inflation.

However, people like Mrs Chow say the government – which is sitting on a budget surplus estimated at more than HK$3.9bn – has not done enough for those literally at the end of the food chain.

What worries the authorities is the potential for unrest. Hong Kong has seen an increase in the number of protests against the wealth gap involving a younger and politically active generation.

“They were born into an already wealthy city, and they feel strongly about the fact that many people live in dire conditions when there is so much money about the place,” says Mirana Szeto, an academic and activist. “These kids are articulate, educated and they have harnessed the power of the internet. They are well informed, and very angry.”

Hong Kong’s reliance on food and commodities imports, its currency peg to the weak US dollar and the high level of rents in the city helped push inflation up to 7.9 per cent in July, the highest level since 1995. While the figure softened in August to 5.7 per cent, food prices are expected to stay high.

“Everything has become more expensive,” says Mrs Chan, another food bank user, aged 75. “My husband and I are both retired and our children are not in a position to help us.”

Like many impoverished retirees in Hong Kong, she has not taken up her share of social security, which can bring in a few thousand Hong Kong dollars a month. For her to do that, she would have to ask her sons to sign an official declaration saying they are not supporting their parents. In a society where filial duty is seen as sacred, it is considered shameful to have to admit that you receive no help from your offspring.

Younger people, too, avoid collecting government handouts. Mrs Chow says that while she has been forced to accept short-term help feeding her children she would never apply for social security.

“There are others more needy than myself. I want to set a good example for my children. I want to be able to say: your mother is working very hard. So should you,” she says proudly.

Copyright The Financial Times Limited 2011. 

Business & Investment Opportunities
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Consulting, Investment and Management, focusing three main economic sectors: International PR; Healthcare & Wellness;and Tourism & Hospitality. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programs. Sign up with twitter to get news updates with @SaigonBusinessC. Thanks.