19
HE term rollercoaster ride is of-
the economy will almost certainly not grow, but Fung Kwan,
head of the Department of Economics of the University of
ten overused but the fairground Macau, is not so pessimistic.
metaphor is a perfect fit for the
He said: “We will be able to keep our economy moving and
probably have single digit growth.’’
last few months of Macau’s economic
Nevertheless, the long time Macau-based economist Alba-
cycle. Skyrocketing economic growth,
no Martins admits, in line with Tam’s forecast, that the econo-
my may not grow at all or manage only a very low increase.
no more, the cacophony of pile drivers
The recession, zero growth or slowdown of the GDP will be
and jack hammers, no more. This is
the result of two two major factors. Decreasing gaming revenuea—
Deutshe Bank analysis predicts they will plunge 14 percenta— nd
the new face of boom-town Macau.
falling investment which has been a key driver behind the double
digit growth since the gaming industry was liberalised.
S
ince September gaming revenues have been decreas-
ing year-on-year and according to all the analysts, 2009 Higher unemployment
promises at best zero growth and probably falling rev-
enues for the gaming industry. The whole economy will suf- During the recent policy address to the legislative Assem-
fer, with the most vulnerable sector being the Small and Me- bly, Francis Tam warned that we should be prepared for a time
dium Enterprises (SMEs), who face obstacles in getting access of adjustment.
to loans as confidence within the banking sector continues to “Macau will face important challenges following the de-
plunge as a result of the international financial crisis. crease in external demand in the export market. Slower growth
But apparently there’s some good news for Macau, com- in the mainland and neighboring regions will have an impact on
pared to many other countries and regions, the SAR Govern- Macau’s tourism,’’ said Tam.
ment has enough reserves to keep the economy ticking over In other words, manufacturers and the gaming and en-
relatively well for at least the next two years. Macau has an tertainment industries will feel the pinch of the recession in
MOP80 billion budget surplus saved for a rain day since the Europe and the US and the resultant slowdown of East Asian
handover. As the dark clouds gather over Macau, the govern- economies.
ment has announced a raft of measures including support for In this scenario, unemployment will increase not only in
SMEs, new public works projects, handouts and a subsidy for the big casinos, hotels and construction companies but also in
every resident. the SME sector. Fung Kwan considers the problem may not
be serious as most of the fired workers will be non-residents.
Low growth “Workforce cuts must be done firstly in the non-resident sector.
This will prevent a significant increase in the unemployment
During a recent meeting of Portuguese-speaking countries, rate,’’ he says.
the director of the Monetary Authority of Macau (AMCM) Fe-
lix Pontes said: “The Macau economy is already feeling the Help for SMEs
pinch of the international financial crisis, but 2009 and 2010
will be worse”. At this time of adjustment, the government will be more
However, Pontes does not believe that the MSAR’s GDP proactive in offering retraining courses for the unemployed.
will plunge next year. “Growth will be quite low but we will not During the policy address debate in the Legislative Assembly,
face a recession,’’ he said. lawmaker Chui Sai Peng said: “Not only do the workers need
Secretary for the Economy and Finance, Francis Tam, says training but also the entrepreneurs need training in order to
cope with the challenges.’’
The SMEs are especially fragile in this context. Tong Noi
“Workforce cuts must be
Tong, coordinator of the Macau SMEs Association (MSMEA),
sees dark times ahead: “Next year will be very very difficult,’’
done firstly in the
he says.
Mr Tong expects that nearly 1,000 small businesses will
close due to problems in getting bank loans from the banks and
non-resident sector.
the limits imposed on the importation of foreign workers.
“SMEs need more imported labour because locals won’t
This will prevent a
accept the salaries we can offer,’’ says Mr. Tong.
The government relief package for SMEs has pleased the
small businesses but the head of the Macau Small and Medium
significant increase
Sized Enterprises Association (MSMEA) fears it will not be
enough.
in the unemployment rate’’
In his 2009 policy address Chief Executive Edmund Ho
Hau-wah announced a big increase in the budget for the fund to
Fung Kwan
support business from about MOP600 million in 2008 to more
than MOP2.1 billion in next year.
december 2008
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