Gambling revenues soared to a new high of US$45 billion last year, an 18.6 percent rise over 2012 and the city’s sixth straight year of record earnings.
Casinos in this former Portuguese colony, which returned to China in 1999, now earn seven times more than those in Las Vegas.
Casino jobs, which pay wages 30 percent to 40 percent higher than in other sectors, represent almost one-quarter of the labor force. Add in casino-related positions like retailing and hospitality, and about half the working population in this city of 600,000 is connected to the gaming industry.
The result is an enviable unemployment rate of 1.8 percent.
Let the good times roll, you might say.
However, Macau’s mono-economy of gaming is creating a generation of workers steeped in the monotonous work of baccarat dealing and spinning roulette wheels, with few of the transferable skills needed in today’s globalized knowledge economy.
However, with many in the economy and workforce increasingly dependent on Chinese gamblers from the Chinese mainland, there is little pressure for change — a situation that may suit Beijing just fine.
It should surprise no one that the city’s gaming boom, which produces 50 percent of its GDP, has spawned a dark side.
Prostitution, organized crime and money laundering are daily affairs. Though not so obvious are the multiple stress lines now tearing at a traditional society trying to cope with uncontrolled urban development, loss of green space, rising local gambling addiction and a general deterioration in the quality of life.
For the average resident, the challenges created by the gaming boom now outweigh its advantages.
Poor transportation, worsening air pollution from casino shuttles serving the city’s 29 million visitors and soaring property prices are just a few of gaming’s byproducts.
Macau’s small and medium-sized businesses, about 95 percent of its enterprises, also pay a price in rising rents and loss of both staff and customers to the casinos.
Adding to this are higher crime rates across almost every category.
Despite all the downsides, Macau’s casino executives and investors, including the big US gaming houses, see unlimited possibilities for further growth and expansion. Their main complaint? A shortage of skilled labor.
With more mega casinos scheduled to open in 2016, Macau is expected to need at least an additional 75,000 casino and hospitality workers, officials say.
Given that the city’s small and medium-sized businesses already struggle to compete against higher-paying casinos for limited talent, Macau would have to import not only casino workers, but also professionals from every walk of life.
Yet neither Macau nor Beijing seems to have a plan to deal with the city’s soaring labor deficit: Neither is willing to slam the breaks on what has become a runaway train of unregulated growth.
Worse, Macau is turning its back on policies that are meant to prepare its future generations for a more globalized, knowledge-driven economy.
If trends continue, Macau risks morphing into a society of “know-nothings” — one whose future could be devoid of educated and skilled professionals, its pool of workers increasingly drawn to easy money in the often mind-numbing work on casino floors.
Every few months, new reports present dire warnings.
In December last year, one survey showed that nearly half of businesses polled “found difficulties in recruiting IT professionals” and predicted the shortage “could further worsen.”
In April last year, an industry report cited the lack of accountancy professionals, with “only fractional increases” since 2007. Another complained of the city’s “lack of engineers and related professions.”
All this points to a society at the breaking point, and one that is mortgaging its future generations for short-term gains.
Even Macau’s lawmakers now complain that the boom has been building castles in the sand.
Last year, Macau legislator Jose Coutinho told the media: “Macau is a complete illusion of prosperity, because what we are building is only casinos, rooms and some shops with famous brands.”
Yet he and other critics hold a minority view in a legislature where 12 of the 33 members are indirectly elected by industry bodies and another seven are appointed by Macau’s Beijing-selected chief executive.
While Macau officials pay occasional lip service to the need to rebalance the economy and have floated a number of proposals, none so far have the transformative effect needed to set the city off in new directions.
One of the most talked about plans recommends that Macau capture more of the region’s “meetings, incentives, conferences and exhibitions” (MICE) business — but this has been slow to take off and relies disproportionately on the gaming sector.
For example, Macau’s biggest trade show is the Global Gaming Expo Asia. A plan to develop nearby Hengqin Island as a free-trade zone is also expected to do little to help most of Macau’s small businesses, given its emphasis on large-scale projects.
Yet the main obstacle to a more sustainable economic model is that Macau continues to grow fat on Chinese gambling, and Beijing still sees Macau as an important outlet for the country’s wealthy and middle-class.
The result is that no one in authority is even contemplating the day when China’s economy slows, the gamblers stop coming and the boom ends, even though history has shown that the bigger the boom in a mono-economy, the greater the potential for a crash.
While China says it wants to see Macau rebalance its economy, Beijing’s reluctance to impose policy prescriptions or offer inducements to help it diversify is not surprising.
That is because Macau may be right where Beijing wants it and China’s other peripheral regions to be — societies increasingly dependent on China for their prosperity and therefore less willing to make annoying demands for such things as democracy and greater autonomy.
Martin Murphy is a former US diplomat. He was head of the Economic-Political Section at the US consulate in Hong Kong and Macau from 2009 to 2012.
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