Expressing his deep concern about the “gravity” of the global economic crisis at the World Economic Forum in Davos, Switzerland, Hong Kong Chief Executive Donald Tsang said he has “never been as scared as now”. He went on to urge European leaders to take decisive action to address the worsening sovereign debt problem that is threatening to trigger a financial meltdown.

Tsang reportedly told European leaders that they must try all means, even those deemed “overkill,” to “inspire” confidence. “That confidence must come from the decisive action of governments working together and doing it quickly,” he said.

That is the advice that the administration of the new Chief Executive who will take over the helm from Tsang later this year should heed. The problems that our external-oriented economy must face in coming years are scary indeed.

It is commonly known that all is not well with the global economic health. The continuous recovery of the United States’ economy from the financial crisis of 2008 is anything by assured. Whatever progress it has made since then could be wiped out by another global credit squeeze resulting from a European sovereign debt meltdown.

To address the unemployment issues, US President Barack Obama has said that fiscal measures will be introduced to bring manufacturing jobs back to the US. This could check the so-called “export” of jobs to lower-cost emerging markets and further reduce US imports of a wide range of consumer products. In fact, imports by the US and Europe from China and other emerging markets have slowed because of the economic downturn that has greatly depressed consumer demand in the developed economies.

What’s more, the struggling economies of many developed countries could take a further beating from the prospective surge in oil prices stemming from the conflict between the Western powers and Iran, which could result in an all-out war.

Against this dismal global economic backdrop, the specter of an economic hard landing on the mainland cannot be ignored. The fallout from such a possibility would almost certainly drag Hong Kong into a deep recession. While we share Mr Tsang’s fear, we also look to him and his successor for “decisive” action.

Of course, we understand the government’s limited role in Hong Kong’s free market economy. The necessary budgetary discipline also places a strict constraint on resources that can be deployed by the government to influence the economy. But these are virtues that should not be used by the government as excuses for hand wringing when confronted by social and economic issues of deep public concern.

In the past several years, the government has been facing increased public criticism for failing to produce a credible proposal to chart the direction of Hong Kong’s economic progress in the coming years. Although the government has identified the key economic sectors, which it considered the pillars of our economy, it is not seen to have proposed any bright ideas or introduced any concrete measures to facilitate their developments.

To borrow Mr Tsang’s words, the Hong Kong government must take “decisive” action, even at the risk of being seen as “overkill,” to restore the confidence of the public.

The author is a current affairs commentator.