Kapok: Being Ill-equipped

A few weeks ago, I was contacted by a freshly arrived European journalist in Hong Kong who had been told that I was closely following current affairs in Macao and, more importantly, that I was willing to discuss certain topics considered by some—too many actually—as taboo. When I asked about the topic she wanted to cover, I was pretty astonished to discover that the issue at hand was the one of “money laundering”: the workings, the amount, the relationship to the casino industry, the regulations and law enforcement policies put in place by the government to combat the situation, and of course the outcome, whether money laundering was still galloping or if it had been reined in.
My initial reaction was one of dismay: how come a newcomer could choose that as a first topic? How can one imagine shedding a corner of novel and bright light—the ethical intention of the investigative newsperson being beyond doubt—on such a sensitive topic without having built a web of connexions over the years that would allow for some form of insider take? And then, with such high stakes, people who are actually in the know will usually keep their lips sealed, and thus the only ones talking are the ignorants or the bragging fools. I was thus pretty dismissive. And then…
If “everybody” knows money laundering happens on a vast scale in the gambling Mecca of the East, one would be hard-pressed to come up with reliable and up-to-date amounts. Numbers in that respect go beyond the imagination of a normally equipped human brain: when a single junket employee can disappear with US$1.3 billion of creditors money, as it happened with Huang Shan back in April 2014, it is not impossible to conceive that the money involved in dubious dealings must be somehow proportionate to this incredible extension of credit by junket operators that goes completely unmonitored by the gaming regulator. And this is one—a big one, and clearly the biggest one that ever came to the attention of the public—of many.
In English, an inquisitive mind often stumbles on the US$200 billion roundish amount of yearly money laundering in Macao. This impressive figure derives from the 2013 annual report of the US Congressional Executive Commission on China, in which one can read that “[t]he gambling industry in Macao is reportedly tied to widespread corruption and the laundering of large amounts of money out of mainland China. […] One Macao academic estimates that US$202 billion in ill-gotten funds are channeled through Macao each year.”
If one looks at the source, the Macao academic is none other than Camoes Tam Chi Keung, from MUST, a well-known liberal personality in Macao specialising in journalism and communication, who had confided to a journalist from the Hong Kong-based Oriental Daily that money laundering could be estimated between 1.57 billion yuan a year, on the conservative side (the figure quoted in the US report) and as much as 10 trillion yuan per year—a staggering and far less conservative US$1,250 billion! As far as methodology is concerned, no question was asked.
Now, if one checks on Wisers how many stories have appeared in the Chinese press regarding “black money laundering” 洗黑錢 in Macao in the past six months, a meagre 144 articles are returned, and even the tightening of monitoring measures by the DICJ in May-June 2016—we finally got rid of aliases for junket stakeholders!—gets only a passing mention. An equivalent search for Hong Kong comes up with 957 stories: should we conclude that logistics, finance and tourism are far more prone to money laundering than gaming?
For Prosecutor General Ip Son Sang, who publicly reported recently that out of 364 cases of money laundering opened in Macao over the past two years only 2 were successfully prosecuted, the problem lies in the lack of proper legal tools. I would add: lack of proper reporting takes a toll too!

Published in Macau Daily Times on October 28th 2016

Kapok: Plus ça change…

When then Premier Wen Jiabao visited Macao in November 2010, he reminded the SAR government that “power [had] to operate under the sun” and that it was duty-bound “to spend more money on livelihood issues”.
Those words sounded like a warning at a time when the discrepancy between public revenue and public spending was gaping: the government was getting richer by the day, and not much was being done in terms of infrastructure, urban development and meaningful public policies for the benefit of the population – think education, healthcare, retirement schemes, transport, lodging, sport facilities, greening of the city, etc.
In the second quarter of 2010, the government had spent only a quarter of what it had pocketed, and piling up resources while designing half-baked policies was the latest fad. “Scientific governance” had just started to bubble up in official speeches, and everybody was thus longing for things to change. Mr Wen had come to Macao to attend the third Ministerial Conference of the Forum for Economic and Trade Cooperation between China and Portuguese-speaking Countries (PSCs), that had concluded on an upbeat note with the announcement of the establishment of a US$1 billion fund to help Asian and African PSCs in their development drive.
As often happens, high expectations are usually met with disappointment.
In Macao proper, things have barely improved, and we still don’t know whether this is due to the appalling mess left by Mr Ho’s tarnished second mandate or Mr Chui’s ineffective first mandate, but clearly livelihood issues have not been addressed properly: traffic is worse than ever, air pollution has aggravated, economic housing plans and healthcare facilities are still simmering on the back burner, smoking is still allowed in casinos, etc.
And that was not for lack of resources: in 2013, the record year for gambling revenues, the government spent less than 30% of what it had “earned”, and even if the “imbalance” in public finance significantly decreased with the decline in gambling revenue, the government spent a mere 41% of its fiscal revenue in 2014 and despite an adverse situation in 2015, spending only amounted to 70% of the revenue last year and surplus still equated to almost 45% of ordinary spending! No wonder we are in need of a new law on public finance for legislators to be able to more closely monitor the situation.
And yet, one can wonder: are most of the legislators part of the solution or actually part of the problem? Why is it that all these businessmen-turned-public-figures are so much against R&D and innovative investments when it comes to public spending? Could it be because they control land usage, public services and the maintenance of these services? Plus ça change, plus c’est la même chose: Mr Li Keqiang, now Prime minister and visiting Macao for the fifth Ministerial Forum is talking about “people-oriented governance, scientific decision-making and giving priority to the people’s livelihood”…
Diversification, meaning gambling refitted with tourism, entertainment, culture and creative industries, is now the way to go, thanks to the admonition aired by President Xi Jinping when he visited Macao in December 2014, and the cooperation with PSCs appears to be one of the two key pillars, together with the integration of the Pearl River Delta, for this ambition to become a reality. The 19 measures to further cooperation between China and PSCs are thus worthy of careful consideration.
But facts are stubborn things: trade between China and these countries peaked in 2013, and the aim was for these exchanges to reach USD160 billion by 2016, whereas they declined by 26% last year, amounting to less than $100 billion. The $1 billion fund announced by Mr Wen six years ago has received a limited $125 million in capital, and only two projects, one in Angola, the other in Mozambique, have been approved for partial funding.
Having the Fund for Development moved from Beijing to Macao might help, and yet for what purpose and to whose benefit? In Macao, the house always wins!

Published in Macau Daily Times, October 14th 2016