Kapok: Who is in charge?

Back in my student years, I wrote a short essay about the massive peasant demonstrations that took place in France in the 1960s, which started before the May 1968 social unrest: Common Agricultural Policy was just starting (1962); younger and more challenging famers’ unions were coming of age; and Charles De Gaulle, the tutelary figure who had given pride back to the French in 1940, had become the first-ever directly elected president in 1962, and yet he was getting old and his prestige was fast-eroding – political personnel, institutions and society were not in congruence anymore.
On the one hand, peasant demonstrations were pointing to a chasm between the demands of a significant part of the population who were confronted with a fast changing environment and disappointing answers given by a far too rigid domestic political establishment. On the other hand, these rallies were in effect strengthening the state as they considered public institutions as the necessary and exclusive intercessor, and this even when unloading rotten fruits and vegetables in the courtyards of the ‘préfectures,’ the symbols of the state in local administrative units. Challenging and yet legitimising!
What is presently happening with the Dore case in Macao and what occurred in May with the disgruntled construction workers taking to the streets to protect their rights are two instances of this tumultuous interplay between state, government policies, corporate practices and segments of the society being confronted with unfair situations. Not only are they revealing a lack of appropriate regulatory environment but also of a possible challenge to the legitimacy of the local state apparatus.
Both cases involve mainland workers or investors, and each time we were made aware of their pleas because the victims took their cases to the China Liaison Office.
In May, the number of people involved was in the hundreds and it lasted almost two weeks – images of disgruntled workers marching from Taipa and occupying the street in front of the Liaison Office were splashed across social networks as well as the pro-government and liberal Chinese press. At stake were large dismissals at several casino construction sites and claims of unpaid wages (up to seven months), and the realisation that with only one-month to settle their case, dismissed workers might be in for spoliation.
Lionel Leong, the secretary for economy and finance, had to step in heavily and openly state that instructions were being coordinated by his own secretariat as well as other administrative units, including the Human Resources Office and the Labor Affairs Bureau.
Still, one can wonder why disgruntled workers would turn to the Liaison Office. Could it be because they have more trust in the higher echelon of the Chinese state to protect them? Could it be because the labor laws are in Macao exclusively drafted by their employers? Or because these laws as they exist are conducive to many forms of discrimination?
Earlier this week, a handful of investors in the Dore junket who are not able to withdraw funds they placed with the company also ended up in front of the Liaison Office. Although there is a clear irony involved in these claimants concerns for the whereabouts of what they call their “hard-earned money”, the questions that arise are of the same nature. Why would they turn to the Liaison Office to protect their assets within the gaming sector? Could it be because the laws allow both the gaming operator – Wynn – and the gaming promoters to play dumb? Could it be because the regulator itself is in denial of the reality regarding the adequacy of the laws and the scale of money laundering that goes on unsanctioned? It was only last week that the legal advisor of the DICJ was recommending a mere Code of Ethics for junkets! Once again, Lionel Leong had to vehemently step in… only after.
In the end, legitimacy will be secured if the right tools and the right channels for mediation are put in place.

Published in Macau Daily Times, September 25th 2015

Kapok: The art of the meaningful

I am no economist, and yet I have enough interest in political economy to figure out when something is right or not. Such is the case with the dramatically loaded use of the word “austerity” by the government. Is it right – in both its rational and moral senses – to use the word “austerity”? And if it’s not, why use the word despite its dreadful adverse effects?
One can always blame translation. Should we translate 緊縮 (jinsuo) as “tightening” rather than “austerity”, which is better rendered by 撙節 (zunjie), that better conveys the notion of frugality? But then, jinsuo is also clearly used to express a “drastic” reduction, such as “credit crunch”, so it does not seem to be an overstretch to translate緊縮計劃 as “austerity plan”, and Macau Daily News indeed refers to 緊縮政策 when it describes “austerity policies” put in place in debt-ridden European countries.
When did we start talking about “austerity” for Macao? Back in June 2014 at the very start of the dwindling of the gaming industry? In December 2014 when the Budget Law for 2015 was passed? Nope.
Only in April 2015, precisely when the budget of the government was being re-examined and revised. At the time, a vaguely worried Chan Chak Mo, the president of the second permanent committee of the Legislative Assembly in charge of supervising public accounts, raised a pale orange flag to say that if monthly gross gaming revenues (GGR) fell below MOP17 billion then Macao could face a budget deficit by year-end. By his sophisticated calculation, MOP20 billion in GGR per month would total MOP240 billion for the year, and given the tax on gambling of 35%, that would in turn translate into MOP84 billion in government’s revenues… almost exactly the amount envisioned by the revision of the Budget Law in May!
Why the MOP17 billion threshold? Because then, we might really have a deficit – a “crisis” in Chan’s vocabulary – but no explanation (other revenues? actual execution of the budget?) was given regarding the MOP3 billion discrepancy. In the new Budget Law, prospective revenues were revised downward, from MOP154.7 to about MOP120 billion, but then expenses went up slightly (!), from MOP83.72 to MOP83.76 billion…
Ultimately, if need be, Chan revealed that expenditures could “easily” be cut across the board by 5%, without affecting social welfare-related spending or heavy investments. This is, albeit slightly pumped up regarding minor investments (-10%), what was announced on September 1st and Chief Executive Chui Sai On has confirmed that these cost-cutting measures were here to stay.
By any account, the seemingly resolute acts taken in the wake of the bad results of the first eight months of 2015 – we are now below the not-so-thin red line of MOP20 billion per month – do not equate to austerity, which is defined as a set of policies aiming at, by way of spending cuts or tax increases or a mix of both, the reduction of government budget deficits. In the case of Macao, this is an (inflated) “anticipated” deficit: we ran a surplus in 2014 and then we have more than MOP350 billion accumulated in fiscal reserve – not even impacted, so we are told, by the ongoing financial turmoil now affecting Shanghai and Shenzhen. Moreover, the government expects these cuts to save MOP1.4 billion, a mere 1.7% of the budgeted expenditures – so much for the rigor of the measures!
Finally, the Execution of the Budget is only 60% – if we rely on the 2013 figures as the most recent ones have yet to be examined by the Assembly – meaning the government spends, in any case, less than 2/3 of the money it said it would!
Taking a stand and publicly explaining what these spending cuts actually mean – the shy first steps in eliminating waste within public administration and restoring trust of the citizenry in its public service – can only benefit Lionel Leong. Resolutely and personally taking the lead in pushing through the ongoing revision of the new Budget Law framework, thus positioning himself as a manifest proponent of greater transparency and efficiency regarding public finances, might not hurt either.

Published in Macau Daily Times, September 11th 2015

Kapok: Better Tomorrows

Schizophrenia seems to be a pathological feature of our modern time, and present-day Macau is no exception. On the one hand, gaming revenues have been taking an ever steeper dive for a continuous nine-month streak; on the other, the body of citizens appears to be unfazed by this fairly distressing situation – at least it would be distressing in any other part of the world – and still professes to be mainly and overly concerned by social and welfare issues in anticipation of the Chief Executive’s policy address of March 23. What is wrong with the people, some ask? Is it blindness? Are people too spoiled? Have they lost track of reality and become impervious to imminent danger because of recent (tremendous) successes? Or is it the confidence that they have in the government? Are the soothing words of Chui Sai On and Lionel Leong Vai Tak that powerful? Or is this unfazed reaction due to the casino tycoons’ take on the situation that everything is “according to expectations” and in line with the necessary “adjustment”, which seems to be the new fashionable buzz word accommodating the “new normal” formula for Macao? Could it be the situation itself – not as catastrophic as some would want it to be, but still more challenging than some would like it to be?

Let’s be honest, the results of a survey that was conducted by the Association of Macao New Vision (澳門新視角學會) about the concerns of the people and what they expect from the coming policy address came as a bit of a surprise. The ten most pressing issues, in order, are: First, a hastening of the construction of public housing; second, the strengthening of the supervision of bus services in order to solve traffic congestion issues; third, the extension of measures to control the real-estate market; and thereafter, in order, the acceleration of healthcare reform, measures to rein in inflation, controlling labor imports and protecting local employment, increasing social welfare spending, strengthening people’s training, improving education and (lastly!) promoting a diversification of the economy. When probed according to categories, people want public policies addressing social issues (72.4%), with economic policies coming a distant second (16.6%) and political and legal demands a very distant third (3.6%). As the survey was conducted in February, before the official announcement of the February plunge in gross gaming revenues (the worse drop in the past nine months), one could reasonably assume that the results could prove slightly different if the survey was to be conducted now.

Lionel Leong, being the Secretary for Economy and Finance, was the first one to react and downplay the flashing red numbers on March 3: What is characterized as a simple “decline” is said to be “in line with expectations” and a recovery – deemed not so miraculous – should occur “within one or two months.” The next day, it was Chui Sai On’s turn to comment, with the CE strongly insisting that the decline was not a threat to state capacity, and that sufficient fiscal reserve would allow the government to allocate public expenditure to welfare measures as budgeted (as if anybody doubted that, given the fact that Macao’s government is endowed with the equivalent of eight years of expenditure at constant spending, and that without even receiving any revenue). Then, of course, casino moguls, most of them in Beijing for the “two meetings” (兩會), commented that the “adjustment” was needed and that no sacrifice would be sufficient for making the dream of transforming Macao into a “world center” (for tourism and entertainment) and a “platform” (for cooperation, both regionally and with Portuguese-speaking countries) come true.

Ultimately, with an actual unemployment rate desperately locked at 1.7%, the prospect of some 20,000 new jobs created by Galaxy Phase II and Macau Studio City, and with the number of visitors having passed the 30-million threshold – why would the people worry that much about a few junkets closing down (there’s clearly too many of them anyway) and plummeting gaming revenues, when in this miserable month of February 2015 these are still roughly the same as the whole year of 2002? And then, it is very fine for Macao residents to have (on paper) the fourth-highest GDP per capita in the world, and yet only be endowed with public services that are not even a match for, let’s say, the capital city of Guangxi, Nanning. Confidence in the government, as shown in a Hong Kong University survey back in December, was in the doldrums, so it does not seem that much of a surprise that people would now trust the new team, which was ushered in two months ago, to take the right steps in addressing some very pressing issues.

Published in Macau Daily Times, March 6th 2015

Kapok: Expected Expectations

Nobody can deny it: the announcement of the new government line-up last Monday did not come as a surprise, quite the opposite. Secretaries’ and other senior officials’ names had been the talk of the town since early November. First on social media platforms, and then splashed on the web-based liberal Aamacau.com (All About Macau, 論盡媒體) on November 8th and ultimately confirmed, in a Pravda-like announcement, on November 11th as the masthead of the front page of the Macau Daily News. Interesting to note that the city’s main pro-government and pro-China daily has lost part of its edge—it was late compared to new electronic media—and yet journalists and commentators only went berserk after the list had been anointed by the establishment’s mouthpiece, here trusted almost like the “official gazette”—can anybody imagine the Ta Kung Pao or the Oriental Daily News announcing the new government beforehand in Hong Kong and everybody else taking it for granted?
Before the summer, rumours were rife as to who would be the chosen ones, but the idea of a complete fresh start was remote, to say the least. The retirement perks bill, despite its fiasco, had confirmed that some kind of musical chairs game was at play, and the names of Lionel Leong Vai Tak as well as that of Alexis Tam Chon Weng were in the mind if not on the lips of everybody slightly interested in Macao politics. But then, the rationale was that continuity would be preserved, and that “good soldiers”, even though they had proven themselves dully unimaginative, would stay on. Even Lau Si Io, the secretary for Transport and Public Works, most probably the most unanimously derided high official, was believed to keep his portfolio. Truly, who would accept the job that is at the heart of most livelihood issues in Macao— transport and housing, and in that order, if the government’s think tank is to be trusted—and still ignominiously tainted by the Ao Man-long scandal of 2006? No wonder that Raimundo Arrais do Rosário had to be called back from his decade long spell in Europe representing Macao…
Why then the need for such an apparent “clean slate” approach? First and quite ironically, because Chui Sai On himself was returned unopposed in his Chief Executive position, thus demeaning the very nature of an election by making it totally uncompetitive. Rigidity on the one hand was calling for more flexibility on the other. Second, because a real popular demand does exist and moreover was taken into account by Chui the candidate. On the side of popular demand, the unfairness of the retirement perks bill pushed 20,000 people onto the streets in May, ultimately forcing the government to bury the bill for good. And despite the many hurdles and intimidations faced by the organisers of the Macau civic referendum of late August, close to 9,000 citizens took part in this independent probing of citizens’ preferences. Eventually, the whole of Chui’s “campaign” was about him having heard the demands of the people, as expressed by the more than 100,000 suggestions and opinions sent to his office while “on the campaign trail”. And third, the Hong Kong SAR situation, whatever the perception, positive or negative, has had a corroding effect on the self-confidence of the powers that be, and in order to prevent a possible stalemate, preemptively providing a resolute stance for (orderly) change appears to be a smart move—beyond the real necessity to do so.
And then came Li Fei, the chairman of the Macau Basic Law Committee and the Deputy Secretary-General of the National People’s Congress Standing Committee, the very same man who came to Hong Kong in late August to explain the ruling of the standing committee over universal suffrage in our sister SAR, and now most notorious for having said that “Only one person [candidate] does not make an election, but too many is not proper either”. While attending a forum in Macao this week, he remarked that contrary to what some people think, deep-seated problems in Macao do not lie in the nature of political governance or stem from the fact that Macao is not democratic enough, but rather derive from Macao’s “own limitations”, the system inherited from the Portuguese colonial administration and other factors related to social and economic development. He then made it clear that “the overwhelming dominance of gambling in Macao is not in line with the overall interest of Macao” and furthermore that it is not in the “socioeconomic safety, stability and developmental interest of the mainland and the whole nation”. What is thus asked from Macao is to reinvent itself with much less gambling and much more patriotism. That for sure requires a whole new team!

Published in Macau Daily Times on December 5th 2014.