The Good, the Bad and the Ugly of Macau

The Gaming Capital of Asia Has Tied Its Image to Casino Projects, Says Macau Business Magazine's Paulo A. Azevedo

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MACAU ( -- In 1995, Cotai was -- and still is -- a stretch of land in Macau joining the islands of Taipa and Coloane. Land reclamation turned the two islands into just one. Back then, however, the idea was to create a new city, one that would allow Macau to grow from half a million to 1 million residents.

With schools, hospitals, thousands of apartments, services and maybe even some back offices from Hong Kong. It was no secret that the governor's think tank wanted to attract Hong Kong companies. The goal: to diversify the services sector so that Macau wouldn't remain dependent on gaming.
Paulo Azevedo
Paulo Azevedo
The project was destined to never see the light of day. Forget about schools and a public hospital. After the handover, he "hip" thing, according to the political guidelines of Macau's strongly capitalist system is just that -- capital.

From Grand Waldo to Galaxy to the Las Vegas Sands and the mammoth Venetian Macao -- Cotai is already a symbol of the "new" Macau, a new gambling city with billions of U.S. dollars in investments. The popular concept is megascale business through conferences, exhibitions, retailing and, of course, casinos.

Liberalization of gambling licenses in Macau was one of the sharpest political decisions ever in the history of this city, which possesses no natural resources, no territorial waters, no agricultural fields and perhaps even fewer noble intentions.

For many, gambling has been a blessing, now that the toy factories are gone and textiles are no longer a vital part of the local economy. Both industries moved to mainland China long ago to reduce costs.

In the end of 2006, Macau's gambling revenues surpassed those of the Las Vegas strip. Six months later, in the first quarter of 2007, it topped the combined revenues from the strip and downtown Las Vegas -- around US$7 billion. Last year, it topped Las Vegas and Atlantic City combined. Soon, Macau will surpass all of Clark County in Nevada.

Does this unprecedented wealth mean all is well in Macau? Far from it. No one in Macau was prepared for this unheard of growth. Not the civil society, and certainly not the government.

The temptation of illicit profits seems too big, which is evident in the case of our former secretary for public works and transportation, who is now in jail after receiving a 28,5 years sentence for corruption, unlawful enrichment and money laundering.

After almost 10 years of new government, Macau's population, who almost have no access to the cadre of decision-makers, is unhappy.

Quality of life has decreased drastically. Traffic is unbearable. Inflation is far more serious than the estimates provided by our government. Few Macau residents can afford to buy real estate because prices have become so prohibitive. Small and medium enterprises are unable to compete with casinos for manpower, which will cause family businesses to close their doors.

Manpower turnover is almost unbearable. Macau lacks tens of thousand of capable workers, so the existent workforce changes jobs at an incredible speed. Only big integrated resorts have the ability to retain staff. Even those, however, are firing thousands because of the global crisis and the credit crunch.

Every day, local newspapers talk about the billions and trillions of dollars moving through Macau, where one in every five residents still lives below the poverty line.

There are good leaders in Macau. Unfortunately, they are not the rule but the exception. Insufficient preparation, a fear of making decisions and Macau's lack of a total transparent legal and political system have undermined the city's capacity to make decisions in a timely fashion. In nearly all instances, the government is being towed. It doesn't act, but merely reacts and accomplishes little.

Despite this, I am optimistic. Macau is unstoppable. Even the greed of some and the incompetence of others is unable to slow the fast pace of investments, particularly in gambling. But imagine what Macau could become 10 years from now if development is well-planned and framed by prudent policies and strategies. Macau could become a true partner in the Pearl River Delta, rather than a peasant city of little significance.

As executive director of Macau Business magazine, which he launched in 2004, Paulo A. Azevedo has reported on Macau's tumultuous development since it was returned to China in 1999.

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