In his first second-term policy address in March 2015, Mr Chui Sai On gave the assurance that consultative bodies would from now on be better regulated. The pledge was twofold: limit the number of consultant positions concurrently held by the same person to a maximum of three and limit the number of years of service in such positions to a maximum of six. A brand new team of Secretaries having been sworn in, the rationale was that if much needed and imaginative public policies were to be put in place, cells of resistance and possible conflicts of interest had to be subdued within these consultative bodies.
When things are decided by the happy few, consultation processes become a life-line. During an official ceremony marking the 65th anniversary of the Communist regime in September 2014, Mr Xi Jinping himself praised “consultative democracy” as China’s unique way of allowing the people to participate in governance. Even if the President’s understanding of democracy was clearly derived from Marxism-Leninism, his urge for a well-established feed-back mechanism coming from the masses was genuine.
In Macao, dozens of public consultations concerning all kinds of governmental decisions have been organised, with varying degrees of soundness, relevance and legitimacy, despite a thorough revamping of the rules in August 2011. Moreover, consultative bodies have mushroomed, totalling now 47 such institutionalised gatherings [I had originally written 46, but forgot to add the newly appointed Urban Renewal Committee] placed under the direct authority of either the Chief Executive or one of the five Secretaries. With 17 consultative bodies under him, the Secretary for Social Affairs and Culture tops them all. These organs do not hold any actual power, but their members do influence the decision-making processes and ultimately the policies themselves.
In mid-March, All About Macau, a liberal-minded Chinese newspaper, came up with the story proving that prominent businessman Paul Tse was actually sitting on more than three such bodies, contrary to Chui’s commitment. Then, the same online outlet published a list of 24 personalities sitting on at least three boards of public agencies and consultative committees. Paul Tse was listed with seven such positions and so was lawyer-turned-legislator Vong In Fai, who was also Mr Chui’s chief campaigner in 2014. Chui Sai Peng, the very own cousin of Mr Chui Sai On and also a legislator, appeared on the list as well, and his name appeared again in the headlines on April 11 when it was discovered that an association he is heading had received important public funding to publish textbooks without going through a public tender. Possible conflicts of interest come in many guises in Macao but often originate in business circles, the Legislative Assembly and these consultative bodies.
Ever since the unravelling of the Ao Man Long scandal, the prevention of corruption at the highest echelon has been advertised as a priority: Chui Sai On’s first “real” policy address in November 2010 was all about “sunshine government” and “scientific administration.” If the enduring results of the latter had been always seriously doubted, the former was somehow being given credence, at least until February this year: the arrest of former prosecutor-general Ho Chio Meng on charges of fraud and abuse of power is now casting a long shadow on the system as a whole.
A conflict of interest – a personal interest taking precedence over the community’s – does not equate with corruption, but in the words of the European Parliament it can be “considered an indicator, a precursor and a result of corruption.” When the secretary for Administration and Justice Sonia Chan asserts that there are less than ten personalities who participate in more than three consultative bodies and that this is being taken care of gradually, should we trust her, especially when the time spent in any given position is not even questioned? What about the issue of patronage? Indeed, the very same Chui Sai Peng sits on a staggering 143 boards of associations! And what about a standing committee member of the CPPCC sitting concurrently on boards of three universities in Macao?
The “small world” excuse is just that: an excuse. After all, the Athenian Democracy was designed for a city half the size of Macao.
Published in Macau Daily Times on April 22 2016
Friday, April 22, 2016
Friday, April 08, 2016
Kapok: Legality vs. responsibility
Since the public unravelling of the Panama papers on Sunday, my nights have been significantly shortened. My, my! This is truly a gripping story!
First, because of its sheer size, as the wizardry of eye-catching data journalism and colourful infographics have made it clear: 11.5 million documents — including 4.8 million emails! — representing a massive 2.6 terabytes of data, and implicating 214,488 offshore structures as well as more than 14,000 banks and other intermediaries, over a period of roughly 40 years! That’s 10 times more than the 2013 Offshore Leaks and 1,500 times more than the 2010 Cablegate/Wikileaks!
Second, because although it originated from a single Panamanian law firm, Mossack Fonseca, the so-called leak has a global reach: it involves companies, banks and individuals across the seven seas – more than 200 countries and territories, and threatens people with varying degrees of accountability all over the world – 140 politicians and public officials, including 12 current and former world leaders. Equally global and hefty is the mobilisation of more than one hundred media partners and 370 journalists, working together under the umbrella of The International Consortium of Investigative Journalism, of which the first press outlet originally approached, the German newspaper Suddeutsche Zeitung, is a member.
And third, because at a time of ever-growing gaping inequalities, it allows to expose the hidden wealth of the rich and powerful, thus stigmatising the imperfections of our system of capitalist wealth generation. Hypocrisy and double standards are made obvious, and beyond the issue of legality/criminality emerges the one of responsibility – social, economic and political, in effect much more open to interpretation. The trial of failing oligarchies is thus set to start.
Yet, if size matters, not all documents are equal, and ultimately one has to be cautious in the exercise of finger pointing at high-profile tax evaders — President Putin and his 2 billion worth of hidden assets as the opening piecemeal — or nations — China, Hong Kong, Russia, the United Kingdom and Switzerland leading the pack if the sample from Panama is to be trusted. As an economist friend pointed out to me, the level of tax evasion should actually be “proportional” to GDP. And if one follows the 2015 study published by Gabriel Zucman about “The Hidden Wealth of Nations,” it is actually some 8% of the world’s financial wealth that is being held offshore. And Zucman is thus able to demonstrate that half of the foreign profits of US firms are booked in tax havens (the Netherlands topping the list!), and that the effective rate paid by US corporations has been reduced by one third since the late 1990s.
Yet again, most of these forms of tax mitigation, planning or optimisation are legal and somehow legitimate — secrecy has its virtues when it comes to industrial intelligence, for example. But clearly, the borders with tax avoidance or tax evasion (here, I am not even considering money laundering or criminal dealings with financial transactions from dubious origins) are blurry and ever-shifting. In China, up to 2011, tax evasion was actually one of the 68 crimes that was punishable by death, and in line with a Marxist perspective, the idea of “robbing” the people of their collective wealth was considered one of the most serious “substantial” offences.
One of the key findings as far as our region is concerned is that the country with the greatest number of Mossack Fonseca’s offices was China and that the Hong Kong office was the busiest of all: at the end of 2015, 29% of the companies Mossack Fonseca was collecting fees for had been incorporated through offices in Hong Kong and China, and Hong Kong was home to the highest number of intermediaries in operation. Family members of China’s Communist party elite have been exposed, and if there is now a total blackout on the Panama papers at large in China proper, trust over the genuine intent behind the anti-corruption campaign launched by Xi Jinping in 2012 is being tested. Will utter rejection or a mere claim to legality be enough?
Published in Macau Daily Times, April 8 2016
First, because of its sheer size, as the wizardry of eye-catching data journalism and colourful infographics have made it clear: 11.5 million documents — including 4.8 million emails! — representing a massive 2.6 terabytes of data, and implicating 214,488 offshore structures as well as more than 14,000 banks and other intermediaries, over a period of roughly 40 years! That’s 10 times more than the 2013 Offshore Leaks and 1,500 times more than the 2010 Cablegate/Wikileaks!
Second, because although it originated from a single Panamanian law firm, Mossack Fonseca, the so-called leak has a global reach: it involves companies, banks and individuals across the seven seas – more than 200 countries and territories, and threatens people with varying degrees of accountability all over the world – 140 politicians and public officials, including 12 current and former world leaders. Equally global and hefty is the mobilisation of more than one hundred media partners and 370 journalists, working together under the umbrella of The International Consortium of Investigative Journalism, of which the first press outlet originally approached, the German newspaper Suddeutsche Zeitung, is a member.
And third, because at a time of ever-growing gaping inequalities, it allows to expose the hidden wealth of the rich and powerful, thus stigmatising the imperfections of our system of capitalist wealth generation. Hypocrisy and double standards are made obvious, and beyond the issue of legality/criminality emerges the one of responsibility – social, economic and political, in effect much more open to interpretation. The trial of failing oligarchies is thus set to start.
Yet, if size matters, not all documents are equal, and ultimately one has to be cautious in the exercise of finger pointing at high-profile tax evaders — President Putin and his 2 billion worth of hidden assets as the opening piecemeal — or nations — China, Hong Kong, Russia, the United Kingdom and Switzerland leading the pack if the sample from Panama is to be trusted. As an economist friend pointed out to me, the level of tax evasion should actually be “proportional” to GDP. And if one follows the 2015 study published by Gabriel Zucman about “The Hidden Wealth of Nations,” it is actually some 8% of the world’s financial wealth that is being held offshore. And Zucman is thus able to demonstrate that half of the foreign profits of US firms are booked in tax havens (the Netherlands topping the list!), and that the effective rate paid by US corporations has been reduced by one third since the late 1990s.
Yet again, most of these forms of tax mitigation, planning or optimisation are legal and somehow legitimate — secrecy has its virtues when it comes to industrial intelligence, for example. But clearly, the borders with tax avoidance or tax evasion (here, I am not even considering money laundering or criminal dealings with financial transactions from dubious origins) are blurry and ever-shifting. In China, up to 2011, tax evasion was actually one of the 68 crimes that was punishable by death, and in line with a Marxist perspective, the idea of “robbing” the people of their collective wealth was considered one of the most serious “substantial” offences.
One of the key findings as far as our region is concerned is that the country with the greatest number of Mossack Fonseca’s offices was China and that the Hong Kong office was the busiest of all: at the end of 2015, 29% of the companies Mossack Fonseca was collecting fees for had been incorporated through offices in Hong Kong and China, and Hong Kong was home to the highest number of intermediaries in operation. Family members of China’s Communist party elite have been exposed, and if there is now a total blackout on the Panama papers at large in China proper, trust over the genuine intent behind the anti-corruption campaign launched by Xi Jinping in 2012 is being tested. Will utter rejection or a mere claim to legality be enough?
Published in Macau Daily Times, April 8 2016
Friday, April 01, 2016
Our great contribution to "greening"
The MIECF in Macao just opened (http://www.macaomiecf.com/miecf2016/en/) and "waste management" has just been made the top priority. Well, I guess "priorities", plural, would be more appropriate! Based on the latest statistics regarding the total consumption of electricity in Macao, it is now safe to say that Macao consumes 25% more electricity per capita than in Hong Kong! In an article that I published about infrastructures in Macao back in 2011 (Infrastructures 2.0 in Macao: The need for an outward push and inward improvements), I lamented: "our yearly consumption of electricity in Kwh per head is now above Hong Kong and still, big consumers don’t pay more than small ones"... Well, well, in Hong Kong, there is "a plan" (yes, a plan with public details, yearly targets, assessments and all) about reducing energy consumption by 40% at the horizon of 2025 (see http://www.enb.gov.hk/…/de…/files/pdf/EnergySavingPlanEn.pdf). In Macao, we keep breaking records of consumption and a Macao individual consumed about 7,700Kwh in 2015 whereas the equivalent figure for Hong Kong was about 6,160Kwh... in effect that's 25% more! And I thought that greening was one of the five priorities...
This is the graph for HK, where is Macao standing?
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