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Government presents “only one direction” for diversification

With many declared intentions, but few details, the final version of the five-year plan for the diversification of the Macao SAR economy for the period 2024-2028 was revealed this Wednesday. The Government reaffirmed the target it has for non-gaming industries - 60 percent of local GDP -, ensuring that it does not intend to reduce the presence of gambling

Nelson Moura

Of considerable size, around 170 pages (in the Portuguese version), but with few concrete details. Macau authorities presented this Wednesday the next five-year plan for the city’s ‘adequate economic development’ until 2028.

The Secretary for Economy and Finance, Lei Wai Nong, made a point of highlighting that “diversification is the main economic mission” of the current administration. A mission that, according to the Government, received the support of 92 percent of residents who participated in the public consultation period.

In general terms, the authorities now put it in black and white that non-gaming activity should occupy around 60 percent of the city’s GDP by 2028 – an ambitious objective, considering that these sectors represented 49 percent of the local economy in 2019.

The presentation comes after gaming, the city’s main industry, was in good health: in the month of October it reached records of post-pandemic gross profits – 19.5 billion patacas, when the monthly average in the first 10 months of the year was 14.84 billion.

The Macau Government now expects that casinos will be able to generate 216 billion patacas in gross revenue again in 2024 (see last page), a recovery that should allow the Macao SAR to once again record a positive budget balance.

Pre-pandemic tourism

At the same time, the Executive expects the number of employees in non-gaming industries to remain practically unchanged, at “around 80 percent”. Over the next five years, authorities expect the tourism and leisure industry to see a gradual increase in the number of international visitors and stays, “with the aim of returning to 2019 levels”. In the last year before the pandemic, Macau received three million international tourists, with more than 18.5 million visitors staying overnight in the territory.

According to Lei Wai Nong, the Macau Government has set aside 235 million patacas to attract a greater number of foreign tourists in 2024. “This amount will be to expand the sources of origin of foreign tourists and attract more families. This is one of our main policies, but the 235 million are still part of the Budget that will be submitted to the Legislative Assembly for approval”, said Lei.

The authorities plan to carry out tourism promotion activities in foreign markets, expand the number of air routes and organize joint tours with neighboring cities. “In this way we will be able to increase the length of stay in the city and consumption levels”, highlighted the Secretary for Economy and Finance. According to the document, visitors’ per capita expenses, excluding gaming expenses, reached 3,187 patacas in 2022, with the average stay being 1.5 days.
Regarding the conference and exhibition industry (MICE), authorities expect to receive between 2,000 and 2,500 events, meaning an increase of between 500 and 1,000 compared to 2019, when Macau hosted 1,536 MICE events, according to the Statistics and Census Services (DSEC ). In addition to the number of events, they want to expand the spaces, going from 240,000 square meters to 260,000. It is also expected that around 600 to 800 professionals will obtain certificates issued by prestigious international and national institutions by 2038.

Finance and Lusophony

One of the key objectives outlined in the plan includes ensuring that the weight of the financial sector in Macau’s GDP remains above 10 percent. According to the plan, most of the efforts are to promote the integration of Macau’s bond market into the international market and increase its competitiveness through subsidies. On the other hand, optimize investment fund management regulations, the development of financial products, and study incentives for asset management companies.

On the same day that the plan was presented, the new legal regime for the financial system came into force, with legislative changes defined to promote the previously announced objectives.

With regard to modern finance, only ‘sustained increases’ in the sector’s gross value added and assets are expected, which registered MOP37.9 billion and MOP2.8 billion in 2022, respectively.

Among the objectives is also the establishment of a financial services platform between China and Portuguese-speaking countries. The Executive aims to expand investment and financing activities in renminbi (RMB) with the aim of developing the functions of the Macau RMB settlement platform, training actions and conferences between China and the PLP.

Regarding the development of the cutting-edge technology industry, the Government intends to certify a minimum of 40 companies by 2028, with five billion patacas allocated to scientific research.

Operators have already delivered plans

The secretary also revealed that the six gaming operators have already submitted their respective plans for non-gaming related projects for 2024. These plans – which were not revealed to the public – were presented to the Government in September, which must respond within 60 days.

Lei Wai Nong stressed that the Government would only assume the role of “guide”, with the market taking the initiative. “The market itself is an invisible hand, while the Government has a visible hand. The distribution of resources in the market must be aligned with its normal functioning”, he said, adding: “The Government will be primarily responsible for general planning, improving sector policies and optimizing the business environment”.

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