If Singapore and Hong Kong want to be centers of financial innovation, attitudes need to change.
What makes a city a financial center?
Investopedia says it requires “international connectedness, diversity and expertise in a variety of financial products and services.” In Asia, Singapore, Hong Kong and Tokyo risk falling short on measures two and three because of their backward attitude toward gay rights.
In failing to recognize LGBT rights, each risks losing talent to places such as New York and London. That’s something the cities can ill-afford as they strive to lead in areas like fintech, cryptocurrencies and IPO venues.
None of the three recognizes gay marriage. Homosexuality was illegal in Hong Kong until as recently as 1991, and while consular officials were allowed to bring in their same-sex spouses two years ago, most other gay couples have had to be content with a visitor visa 1 for the dependent.
Singapore, meanwhile, has kept a colonial-era sodomy law and has banned foreigners from attending the nation’s annual Pink Dot Rally.
Tokyo is perhaps the most advanced, with some of its wards issuing symbolic “partnership certificates” to same-sex couples. But these aren’t legally binding and confer none of the legal rights of marriage, including custody of children and tax benefits.
A legal challenge in Hong Kong that’s been dubbed the “QT case” has thrown light on the issue after around 30 international financial and law firms voiced support for a British woman fighting for a visa for her same-sex partner. The companies included Goldman Sachs Group Inc., Credit Suisse Group AG and Linklaters LLP, according to a statement from Davis Polk & Wardwell LLP. Hong Kong’s highest court struck down the companies’ bid to back her battle in late April and on Monday began hearing the final appeal of the case.
Also in the city, the Court of Appeal last week overturned a landmark judgment requiring the government to grant the same spousal benefits to employees in same-sex marriages as those enjoyed by their heterosexual colleagues. The court ruled that the government had a legitimate aim to protect the institution of traditional marriage as a “custodian of Hong Kong’s prevailing socio-moral values.”
Such setbacks are surprising considering Hong Kong recently won approval to host the 2022 Gay Games. The former British colony beat out Washington, D.C., and Guadalajara, Mexico, to become the first Asian city to be awarded the Olympics-style event, which is held every four years.
There’s an economic and social cost, too.
Mental health issues and suicide rates continue to be higher among LGBT persons than in other communities, while non-inclusive work environments tend to have a negative impact upon productivity.
Free and Equal, a United Nations initiative, found that in a study of 39 countries, marginalization of LGBT persons was causing a substantial loss of potential economic output. In India, for example, as much as $32 billion a year is forfeited.
Stories abound, also, of financial firms losing talent because of a country’s policies. A lawyer with direct knowledge of the QT proceedings said he is aware of multiple instances where employees at American and other foreign banks in Hong Kong left to work in competing cities because their partners had to keep seeking renewal of their visitor visas every three months.
Others cite examples of bankers recruited to Hong Kong from London and New York who were legally married at home, but who have refused to move until their partners receive extended visitor visas. Some spouses have even had to apply to be a student at a university in order to be allowed in.
Not all of Asia is so far behind.
Australia legalized same-sex marriage in December, while Taiwan’s constitutional court in May last year ruled that the island’s laws must be changed to allow gay marriage within two years. But neither’s major city ranks as a top global financial center, with a list published in March by the China Development Institute and London think tank Z/Yen Partners putting Sydney at No. 9 and Taipei 30th.
If Hong Kong and Singapore truly want to win the war for talent and excel in innovative areas such as fintech, being more open when it comes to diversity is a crucial first step.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To renew these visas, the dependent spouse generally must make a trip to China or Macau.
by Nisha Gopalan
Source – Bloomberg