It is true that for over two years the incredible boom halted and gaming operators and government alike stopped bathing in the billions they were used to. Almost effortlessly, I might add.
With the market recovering and going from strength to strength, why is everyone so cautious? At least, regarding expenditure in Macau. Some numbers: Macau’s Gross Domestic Product (GDP) grew 10.3 per cent year on year. Most of the countries in the world would give an arm and a leg to record half of that. Visitor expenditure in the same period, excluding gaming expenses, hit MOP13.46 billion (US$1.68 billion), a 16.6 per cent year-on-year increase.
And it’s easy to follow the trend, something that Lawrence Ho does well – as he confesses to us in this edition – because world sales of personal luxury goods are expected to grow 2 to 4 per cent this year, according to consultancy group Bain & Co. With Europe and China leading the way (and many of the sales in Europe because of Chinese consumers).
Most importantly, a 23.7 increase in May in gaming. Not only putting growth on a 10 consecutive month roll but recording a number – 22.74 billion patacas or US$2.83 billion – way better than anticipated. The accumulated gross gaming revenue for the first five months of 2017 stands at MOP106.38 billion, 15.8 per cent higher than the same period last year.
No wonder the public coffers continue to billow, with the MSAR Government posting a year-on-year increase of 9 per cent in its fiscal surplus during the first quarter amounting to MOP12.82 billion (US$1.60 billion). Unsurprisingly, showing its lack of accuracy, once more.
The government continues to be so pessimistic that it seems no-one knows what to do. One thing is a margin of 20 per cent (which is already quite substantial) and another is a difference of more than 500 per cent. Which is what is probably going to happen at the end of the year. And that’s because the government’s target for the fiscal surplus for the whole year of 2017 is MOP5.57 billion. Which means that in just the first three months the city has already achieved 230 per cent of the budgeted surplus. Clearly, someone is asleep at the wheel.
So, what do all these numbers tell us if we know that economic agents continue to avoid expenditure and the government seemingly has a tendency to collect cash as a hobby? Because the projects are delivered five times later than usual in a less developed country and others stall on time (while the usual sharks probably find a way to sink their teeth into the juiciest chunk of the pie).
It tells us that gaming operators are basically following the government’s lead (and who can blame them?) when they cut their expenditure in the city, amassing more money for the quarterly results to boost their share prices and put a smile on the faces of their international shareholders.
Who continues to lose with all this moneysaving? The city and its people, with less domestic spending that will contribute to a smaller growth of the economy and the citizens’ quality of life. Without any apparent reason. Interesting, as Business Daily has just reported, Silicon Valley representatives think Macau is well positioned to become a regional hub for start-ups. More than the usual and so far meaningless political jargon of ‘diversification’, to transform the city in a way Ireland did years ago – seems a no brainer. If only we had the right mindset and did not fall foul once again of the oppressive tentacles of some of the local tribes that don’t have the ability to be great – but clearly have the muscle to avoid competition from outsiders.