MACAU BUSINESS
The economist believes that diversification “hasn’t happened yet, nor will it, by a simple decree”. While trying to identify possible paths – such as gaming related activities or services, or in other areas such as cultural industries or Chinese traditional medicine – he warns that the conditions just don’t exist yet. “We’re thinking of activities aimed at small and medium enterprises, a sector which is currently struggling against high rents and the job market. As long as we don’t provide objective conditions for new companies to appear and for non-gaming related businesses to be created, especially companies that are not subject to the effects of the natural expansion and contraction cycle that the gaming sector feels, the diversification just won’t happen”, he states. On the other hand, economist Jose Sales Marques feels that, in the first phase, the economic diversification will be “intimately linked with the gaming and tourism industry”, and he goes back in the History of the Macau Special Administrative Region: “Macau’s a very small society and its past was strongly influenced by monopolies, which is a legacy from the 19th Century when the Portuguese ruled the territory”. According to him, the solution is to open the
market, including the importation of foreign labour. He considers that the exclusivity afforded locals when it comes to croupier positions is a “complicated situation” which should remain untouched for the next five years of government. “Why is the Chief Executive so adamant in denying outsiders access to these positions? Probably because the political costs of saying yes would be much higher. There is a contradiction between the social forces that [clamour] for a more open system and what the system itself is able to accept and accommodate”, he says. Sales Marques also mentions the problem of scaling: “The creative industries are a clear bet by the government and that’s why they have their own fund. Still, even when these projects materialise and fully accomplish their potential we cannot expect them to significantly contribute towards the SAR’s GDP. What is the exact number – 1 percent, 2 percent, 5 percent? – of these industries’ contribution to the economy that would be enough to finally claim economic diversification as a reality?”
have its consequences but Macau enjoys full employment and boasts one of the planet’s highest ‘per capita’ revenues, so there’s no reason to panic when the first bad news arrives”.
Not putting all the eggs in one basket
Nevertheless, Duarte underlines the weaknesses: “No- one knows when the largest [item of] infrastructure currently being built – the light railway – will be finished. We can follow that with a bridge but that’s not what economic diversification is about. It’s simply a measure to keep the economy going during a period of contraction by resorting to public investment”.
22 OCTOBER 2014 Space to grow Joey Lao’s analysis concludes that Macau is limited
“up to its neck” by the lack of land, which is essential for development and to finally reach the sunny uplands of international entertainment and leisure centre. “Diversifying is not enough”, he warns, while mentioning that, for example, there is a real need to facilitate the movement of tourists and non-resident workers on the main border with China (Border Gate). “Opening the border 24 hours a day is a change that the city must face. If that doesn’t happen, Macau’s ability to receive people will face very serious problems, with additional social costs for residents”, Lao says.
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