HONG KONG - The news, released last week,
that tiny Macau - a sleepy, underachieving
Portuguese enclave until its return to Chinese
rule in 1999 - has become the richest place in
Asia seems counterintuitive to anyone who has been
there recently. A closer examination of the
figures supplied by the Macau Statistics and
Census Service reveals that you should always
trust your intuition.
While chief
executive Edmund Ho Hau-wah may crow about Macau's
new, unrivaled place in the region, this gaudy new
status is actually more of an indictment than a
celebration of his nearly nine years at the helm.
Here is the good news - Macau's booming
casino industry boosted per capita gross domestic
product to US$36,357 last
year,
a rise of 26%. That surpasses perennial regional
gross domestic product (GDP) superstars such as
Japan, Singapore, Hong Kong and Brunei and means
the territory now ranks 20th on the list of the
world's top-performing economies, ahead of Italy
and just behind Germany.
That is where the
good news ends. This is neither an economic
miracle nor a model that anyone in Asia - or
elsewhere - should aspire to follow.
All
of Macau's newfound wealth has been generated by
casino revenue, which grew 47% last year, so GDP
figures present a false economic picture of the
city with a population of 538,000. Consider this:
the rise in median monthly salaries has not come
close to keeping up with Macau's soaring GDP,
increasing only 7.5% from a year earlier and now
standing at 7,930 patacas (US$990), well below the
earning power of its prominent Asian neighbors.
A look at personal consumption expenditure
also clearly puts Macau, which has a land mass of
only 16 square kilometers, in a far humbler place
than its garish GDP banner suggests.
Personal consumption accounted for only
21% of Macau's GDP last year. In Hong Kong, 60
kilometers northeast, personal consumption
accounted for 60% of GDP and personal consumption
expenditure per capita was $17,800, compared with
Macau's $7,500.
Where do you find the rest
of Macau's whopping GDP? Most of it has gone into
building a gambling mecca that has become the Las
Vegas of Asia. Indeed, last year Macau overtook
the Las Vegas Strip as the richest gambling market
on the planet.
Macau has long been known
as a haven for gamblers, but that reputation was
greatly enhanced in 2002 when the gaming market
was liberalized to include foreign players. Before
that, Hong Kong-born billionaire Stanley Ho
Hung-sun, now 86, had monopolized the industry for
four decades. Las Vegas gambling moguls seized the
opportunity and poured money into the city, which
now boasts 30 casinos. The Venetian Macau, which
was built by the Las Vegas Sands Corp and opened
last August, is the largest casino in the world.
While Macau's gambling dens have lured
millions of visitors to the city - most of them
from mainland China, where gambling is illegal -
those tourist dollars are going mostly into the
pockets of casino moguls, with ordinary citizens
left to pick up the scraps that fall from the
banquet table.
Making matters worse for
ordinary folk, inflation - as measured by the
composite consumer price index - raced along last
month at 9.47%, a 12-year high. Rents rose 15.6%,
and the cost of a doctor's consultation shot up
24.2%. Add to that sharp hikes in food prices that
have also hit Hong Kong and the mainland and the
reported 7.5% jump in median monthly income starts
to look like a negative.
Unemployment is a
mere 2.9%, but that, again, is due to the casino
boom. Alarmingly, Macau's younger generation is
increasingly choosing to drop out of school in
their teens to take casino jobs that pay as much
as $2,200 a month. Gambling revenue has allowed
the government to boost spending on education, but
at the same time casinos are snatching would-be
graduates away with the lure of easy money for
work that, most likely, will be a dead-end.
Predictably, the growing gambling culture
has also led to official corruption at high
levels. The poster boy for this trend is Ao
Man-long, the former secretary of transport and
public works who in January was sentenced to 27
years in jail after being convicted on 40 counts
of taking bribes, money laundering and otherwise
using his position to help property developers win
mega-dollar construction deals.
Prosecutors accused Ao of accepting
kickbacks for 41 public-works projects - most of
which were either linked to or inspired by the
expanding casino industry - leaving him with a
personal fortune of more than $100 million, an
amount 57 times his reported income as a minister.
His illicit wealth reportedly included not only
cash and bank deposits but also watches, jewelry
and an extensive wine collection.
Casino-related corruption has also seeped
into the police department, where one officer
turned loan shark was arrested for financing the
gambling habit of at least 15 of his colleagues
and another was charged with embezzling $36,000 to
pay off his gambling debts.
The city's May
1 Labor Day celebrations have in the past two
years turned into sometimes violent protests, and
official corruption is one of the sticking points
with the angry mobs. Another grievance is the
migrant labor that has been imported to support
the construction boom fueled by the proliferation
of casinos. This cheap foreign labor keeps wages
down for the average Macau-born worker.
Last May 1, 2,400 demonstrators turned out
to air their grievances, and police fired warning
shots in the air when the protest turned into a
riot. One of the shots apparently struck a passing
motorcyclist, who survived the ordeal. Since
economic and social inequality are getting worse,
not better, in Macau, the protesters should be out
in force again next month. One of their favorite
chants last year - "Edmund Ho step down" - is
likely to be popular again this year.
The
53-year-old chief executive is unlikely to heed
the call of the disgruntled masses. The former
accountant has clearly aligned his administration
with the rich and powerful and does not deign to
acknowledge the complaints of those who are the
losers in his distorted vision for the city.
Ho, however, must give up his office when
his second term expires in 2009, and he will leave
a tainted legacy. The lesson of Ho's single-minded
vision for his as-yet unnamed successor - is a
simple one: don't put all your eggs in one basket,
and dispose of the rotten ones.
Kent
Ewing is a teacher and writer at Hong
Kong International School. He can be reached
at kewing@hkis.edu.hk.
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