Inside Asian Gaming

INSIDE ASIAN GAMING | April 2008 2 Editorial Editor and Publisher Kareem Jalal Director João Costeira Varela Business Development Manager Matt Phillips Operations Manager José Abecasis Contributors Michael Grimes, Desmond Lam, Steve Karoul, Richard Marcus Graphic Designer Brenda Chao Photography Ike Inside Asian Gaming is published by Must Read Publications Ltd Suite 1907, AIA Tower, 215A-301 Av. Comercial de Macau - Macau Tel: (853) 6646 0795 For subscription enquiries, please email [email protected] For advertising enquiries, please email [email protected] or call: (853) 6646 0795 www.asgam.com Printed by Icicle Print Management (Macau) Ltd Tel: (853) 2871 2818 Fax: (853) 2871 2898 www.icicleprint.com Kareem Jalal We crave your feedback. Please send your comments to [email protected] Quite the Turnaround Before Macau embarked on a heady tourism and gaming-driven economic boom in 2003, in- ternational journalists describing the city unfailingly drew on the stock adjectives “sleepy”,“seedy”, and“tiny”to describe the city. Macau is now decidedly not sleepy and reports on the city these days are dominated by its dynamic gaming industry, rather than its seedy side, which has become less visible and a lot less violent after China regained sovereignty of Macau in December 1999. However, Macau will always be tiny—even the ongoing reclamation, which has increased the city’s land area from a mere 12.7 square kilometres in 1912 to almost 30 sq km now, can only go so far. Soaring visitor arrival numbers and gaming revenues along with massive investment to create sprawling casino resorts and other ambitious tourism infrastructure led to 26%year-on-year growth in Macau’s gross domestic product (GDP) in 2007, with GDP per capita reaching US$36,357—the highest of any Asian economy. Media reports have been disdainful of Macau’s newfound prosperity,however,highlighting the worsening wealth gap and other social problems created by the growth, which has been largely concentrated in the powerful gaming and tourism sectors.Inflation reached a 12-year high of 9.5% in February, with housing in particular having become unaffordable to many.The median monthly salary has significantly lagged overall growth (and is barely keeping up with inflation), increasing only 7.5% year-on-year to around US$990—well below that of other more diversified Asian econo- mies with less impressive GDP per capita figures. Macau’s growing dependence on the tourism and gaming sectors itself is a problem, leaving the city increasingly vulnerable to external shocks. Diversification is being hindered by a worsening labour crunch and other shortages,with small and medium-sized enterprises struggling to compete for resources with the casinos. The GDP per capita figure belies the actual spending power of Macau’s population. While personal consumption accounted for only 21% of Macau’s GDP last year, it accounted for 60% in Hong Kong, where personal consumption expenditure per capita was US$17,800, compared with Macau’s US$7,500. Although unemployment in Macau is a mere 2.9%, and only about 9,500 workers are with- out jobs, the labour force is becoming concentrated in the casino sector, with the younger generation increasingly opting to forsake higher education for high-paid dealer positions— dealer salaries have skyrocketed owing to the government’s ban on casinos employing foreign workers as dealers. Political discontent is also on the rise in a city long known for its political apathy. In addition to the economic and social problems listed above, public dissatisfaction with government adminis- tration and corruption is growing.On February 6th,former secretary for transport and public works, Ao Man-long, was sentenced to 27 years’ imprisonment on charges of accepting bribes, money- laundering and abuse of authority. However, Mr Ao’s harsh sentence has not entirely reassured the public that the government is serious about tackling corruption, especially given the widespread perception that the corruption of which he was convicted was likely to have involved other mem- bers of the government. Pro-democracy advocates have derided Mr Ao’s trial as a show, claiming that corruption in the city is so endemic that it would not be affected by the verdict. Notably, prior to his conviction,Mr Ao was one of the possible candidates to fill the chief executive position,when the term of the incumbent, Edmond Ho, comes to an end in 2009. Even confidence in the police force has been rocked following a spate of recent scandals, in- cluding revelations of loan-sharking, theft and gambling in the ranks. It comes as little surprise, then, that the city is witnessing a series of unprecedented protests. Most recently, a march was held during the eighth anniversary of the handover of Macau’s sover- eignty to China on December 20th—the first time a demonstration was held on the anniversary of the handover—with protestors demanding universal suffrage as well as a crackdown on cor- ruption and illegal workers in the city. The next protest is likely to be held during the Labour Day holding on May 1st. The past two Labour Day protests (also unheard of prior to the boom), have been marked by violence. At the close of China’s National People’s Congress last month,President Hu Jintao issued a stern reminder to the Macau government to maintain calm in the lead up to the Beijing Olympics and avoid another messy Labour Day protest. This is a marked shift from four years ago, when Macau appeared incapable of doing wrong in Beijing’s eyes. While Hong Kong’s then chief executive, the beleaguered Tung Chee-hwa (who stepped down in disgrace in 2005), was berated for failing to quell mounting discontent in his city, Macau chief executive Edmund Ho was praised for leading the reversal of Macau’s economic fortunes. Last month, President Hu warned Mr Ho to “deal properly with ‘new situations’ and ‘new problems’ the region faces in its development,”while Hong Kong’s current chief executive, Donald Tsang, was praised for guiding his city’s development“in a good and right direction.”

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