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?
Friday, March 25, 2016
Kapok: Five is five, not three
The yearly plenary sessions of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) — the “two meetings” 兩會 as colloquially referred to in Chinese — concluded just a week ago and with them we are set for new priorities in the coming year and the next five years, with the 13th five-year plan starting this year.
The general directions had been already introduced last year — even with a campy song about them — and the five — again — tenets of the plan had been delineated in order to achieve ‘medium-high’ GDP growth, now set at 6.5 percent for 2016. First, “innovation” is seen as the key driver of economic development in order to upscale China’s economic structure into a higher-quality growth pattern. Then “openness” is considered of utmost importance for China to become a major responsible stakeholder in world affairs, both politically and economically. Then, “green” development and the necessity to “balance” the economy in order to ensure greater evenness among rural and urban areas, and across different industries, are the two pillars of what would be called in Europe “sustainable development”. Finally, “inclusiveness” — understand social justice — is a full part of that developmental horizon.
Wrapping up the conclusions of the two meetings, Chief Executive Chui Sai On outlined five — again — paths for Macao to transform and “consolidate its unique position”.
First, Mr Chui insisted on the need to comply with the country’s constitution and the Basic Law. Honestly speaking, I am really starting to wonder what is meant by this oft-repeated mantra. Is it not already the case? And if not, in what regard is it not respected? We heard recently about concerns pertaining to the judicial system and possible issues with justice independence: could that be it? Or is it related to the fact that a union law has yet to be passed and is systemically rescheduled by navel-gazing businessmen-turned-legislators who now claim that possible “strikes” could impair even more our dwindling casino revenues? Or possibly, the fact that now some NPC members representing Macao are asking for the NPC to step up efforts on reviewing laws passed in Macao? From my own little understanding, when Mr Io Hong Meng, a Macao NPC delegate backed by the Kaifong, insists that “instead of just keeping the laws for records, the NPC Standing Committee should also […] start reviewing the laws enacted under Macau’s legislature”, I am not sure this is not in complete contradiction with the letter and spirit of the Basic Law. And does Mr Ho Iat Seng, the only NPC Standing committee member for Macao and the president of the Legislative Assembly, concur?
Then Mr Chui mainly stressed the economic aspects of the message, and especially the imperative to coordinate the city’s Five-Year Development Plan with the major policy direction of China and the pressing need to transform Macao into a world centre of tourism and leisure, and a cooperation platform between China and Portuguese-speaking countries. Society was not forgotten: the social development of young people is to be supported and social welfare improved. And finally, all this could be achieved thanks to a more “effective” mode of governance, based on speedier administrative reform, additional thoroughness in anti-corruption efforts, as well as greater cooperation among administrative units. Clearly, transparency and accountability are not part of Mr Chui’s vocabulary.
Somehow, the “innovation”, “openness” and “balance” imperatives are there. The diversification of Macao’s mono-industry; the expansion to Hengqin and now the resurrection of the Pan-Pearl River Delta 2003 vision; the realization that Macao has a unique role to play in connecting the Portuguese-speaking world with China; the expansion over 85 square kilometers of coastal waters as recently demarcated and possible development of a maritime economy; the stepping-up of quality education and the nurturing of local talents; the promotion of SMEs; etc.
What about “the inclusiveness” and the “greening”? What about developing real mean-tested social policies rather than oversized entitlements for residents? What about sanctuarizing Coloane, despite the petty interest of one CPPCC delegate? Five is five, not three.
Published in Macau Daily Times, March 25 2016
The general directions had been already introduced last year — even with a campy song about them — and the five — again — tenets of the plan had been delineated in order to achieve ‘medium-high’ GDP growth, now set at 6.5 percent for 2016. First, “innovation” is seen as the key driver of economic development in order to upscale China’s economic structure into a higher-quality growth pattern. Then “openness” is considered of utmost importance for China to become a major responsible stakeholder in world affairs, both politically and economically. Then, “green” development and the necessity to “balance” the economy in order to ensure greater evenness among rural and urban areas, and across different industries, are the two pillars of what would be called in Europe “sustainable development”. Finally, “inclusiveness” — understand social justice — is a full part of that developmental horizon.
Wrapping up the conclusions of the two meetings, Chief Executive Chui Sai On outlined five — again — paths for Macao to transform and “consolidate its unique position”.
First, Mr Chui insisted on the need to comply with the country’s constitution and the Basic Law. Honestly speaking, I am really starting to wonder what is meant by this oft-repeated mantra. Is it not already the case? And if not, in what regard is it not respected? We heard recently about concerns pertaining to the judicial system and possible issues with justice independence: could that be it? Or is it related to the fact that a union law has yet to be passed and is systemically rescheduled by navel-gazing businessmen-turned-legislators who now claim that possible “strikes” could impair even more our dwindling casino revenues? Or possibly, the fact that now some NPC members representing Macao are asking for the NPC to step up efforts on reviewing laws passed in Macao? From my own little understanding, when Mr Io Hong Meng, a Macao NPC delegate backed by the Kaifong, insists that “instead of just keeping the laws for records, the NPC Standing Committee should also […] start reviewing the laws enacted under Macau’s legislature”, I am not sure this is not in complete contradiction with the letter and spirit of the Basic Law. And does Mr Ho Iat Seng, the only NPC Standing committee member for Macao and the president of the Legislative Assembly, concur?
Then Mr Chui mainly stressed the economic aspects of the message, and especially the imperative to coordinate the city’s Five-Year Development Plan with the major policy direction of China and the pressing need to transform Macao into a world centre of tourism and leisure, and a cooperation platform between China and Portuguese-speaking countries. Society was not forgotten: the social development of young people is to be supported and social welfare improved. And finally, all this could be achieved thanks to a more “effective” mode of governance, based on speedier administrative reform, additional thoroughness in anti-corruption efforts, as well as greater cooperation among administrative units. Clearly, transparency and accountability are not part of Mr Chui’s vocabulary.
Somehow, the “innovation”, “openness” and “balance” imperatives are there. The diversification of Macao’s mono-industry; the expansion to Hengqin and now the resurrection of the Pan-Pearl River Delta 2003 vision; the realization that Macao has a unique role to play in connecting the Portuguese-speaking world with China; the expansion over 85 square kilometers of coastal waters as recently demarcated and possible development of a maritime economy; the stepping-up of quality education and the nurturing of local talents; the promotion of SMEs; etc.
What about “the inclusiveness” and the “greening”? What about developing real mean-tested social policies rather than oversized entitlements for residents? What about sanctuarizing Coloane, despite the petty interest of one CPPCC delegate? Five is five, not three.
Published in Macau Daily Times, March 25 2016
Tuesday, March 15, 2016
UnionPay crackdown, again…
Love that remark by Sanford C. Bernstein: '“As such, if pawnshop transactions were to be completely eliminated, industry EBITDA could be negatively impacted by 9 to16 per cent. Although we see this as a worst case scenario”. So basically, dubious transactions through UnionPay are being targeted and we should worry? The real worry is that it is still going on in the open and that analysts lament about it as if it was a legit and acceptable factor! As it was put in a SCMP article back in December, we are talking about a "multi-billion-dollar racket", one used to circumvent China's strict currency controls and encourage illegal forms of credit! But this is already old wine in a not so new bottle...
Subscribe to:
Posts (Atom)