chinese new year

EDITORIAL – Eye of the Tiger

Macau Business Editorial | February 2022 | By José Carlos Matias – Director

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When the COVID-19 pandemic erupted two years ago many thought it would be over in a matter of six to nine months, as happened back in 2003 with SARS – also a coronavirus. But now, on entering year three of the “Covidian Era”, a number of lessons have been learned and the path towards the post-COVID new normal is gradually taking shape, still with hiccups, across most of the globe.

Here in Macau, as we usher in the Year of the Tiger in an enviable COVID-free environment, the economy is still facing headwinds that – while not a ‘perfect storm’ (we hope) – are blowing in from all around the compass rose. On the horizon are transformations, brought on by the situation but whose ultimate cause may to some extent be structural. The COVID-19 pandemic’s sustained impact on the local economy will remain a key feature this year despite the prospect of a gradual recovery through 2022 forecast by experts in the form of double-digit economic growth. A Greater Bay Area travel bubble to include Hong Kong is still months out, and resumption of international travel in the Year of the Tiger – with safe, quarantine-free arrivals for foreign tourists – is hard to see taking place from where we currently stand.

Macau’s economy will surely rise again, phoenix-like, in the future. The question today is whether we’ll see it come roaring back this Year of the Tiger

In tandem with the pandemic’s impact on businesses and employment, the city’s core industry, gaming, has undergone watershed developments in the past few months. The near-demise of VIP gaming promoters – from the arrest of top junket heads on suspicion of illegal cross-border gambling activities, organized crime and money laundering to the closure of most VIP rooms in casinos – and the transformational impact of the gaming bill, approved at first reading, are paving the way to a new regulatory landscape, one the local authorities stress will both foster the industry’s healthy and sustainable development and spur economic diversification. 

Unsurprisingly this new era will mean a number of new strings attached to operators, imposing tighter supervision and enhanced social responsibility. 

The bill was welcomed by the gaming concessionaires and several of the proposed changes were greeted by some social groups; others, not so much, instead raising eyebrows and concerns. It must be said the Government listened during the consultation period, heeding opinions and dropping certain measures that were met with particular scepticism, such as the introduction of Government delegates to the concessionaires or authorization requirements for dividend distribution. Other matters, however, remain to be clarified and fine-tuned, an outcome, one would hope, of the article-by-article review currently underway in the Legislative Assembly. 

The Year of the Tiger should therefore be one of building, on foundations laid in the latter months of the Year of the Ox, with respect not just to gaming legislation reform but also to concrete measures for speeding up construction of the Guandgong-Macau In-depth Cooperation Zone in Hengqin. Launched in September 2021, the Zone has emerged as an unmissable opportunity for the SAR, one that pandemic woes have thus far prevented from truly taking centre stage. While making leapfrog advancements in the short-term might not be easy, programmes like the proposed financial support measures for Macau residents and companies working and operating on the neighbouring island might just do the trick. 

In his Chinese New Year Message, Chief Executive Ho Iat Seng pledged that the SAR would not lower its guard, continuing to ensure epidemic prevention and control, promoting economic recovery and diversification, focusing on safeguarding people’s livelihoods, deepening public administration reform, giving impetus to the Hengqin project and enhancing the city’s role in national development. All that may sound like a tall order, but it’s an order that can be filled with the right policies to tackle employment and SME woes, the wise allocation of resources, open-mindedness, a proactive approach to an ever-changing pandemic situation, effective coordination with mainland authorities and a favourable external environment.

Macau’s economy will surely rise again, phoenix-like, in the future. The question today is whether we’ll see it come roaring back this Year of the Tiger. While that might not be a sure bet, perhaps at least some of what we’ve witnessed of late will prove a blessing in disguise with hindsight. All of this requires vision – the eye of the tiger.

Happy Chinese New Year! Kung Hei Fat Choi!