Sam Hou Fai presented his political program last Saturday to an audience of Electoral Commission members and journalists. He addressed various areas and pointed out some of the changes he wants to bring “if elected,” including public administration reform, modernizing laws, improving the social security system, training more bilingual professionals, and protecting the rights and interests of Portuguese descendants, among others.
However, it’s in the area of economic diversification where “perhaps the biggest shift in policy may occur,” says political scientist Sonny Lo, noting that the candidate “represents continuity more than change.” Yes, there is still complete alignment with the current five-year plan, which runs until 2028, with a focus on building “one center, one platform, one base,” and the “1+4” model. Yet, he is keen to bring new ideas, being clear about his plans to “accelerate” economic diversification. According to the candidate’s analysis, two billion patacas have been invested in diversification, but there is still a need to “increase the amounts available for businesses.” To that end, he promised to study the creation of new government-controlled funds to support economic diversification. “Current policies have not yielded the desired results, making it essential for the government to propose measures that can compete globally,” says José Alves, dean of the Faculty of Business at the City University of Macau.
“Economic diversification in Macau not only requires new investments but also the reallocation of existing funds. This speech (…) suggests that new projects will be developed, possibly bringing a renewed vision and future for the region. Currently, Macau’s economy is based on a paradigm from the last century, focused on medium-value-added services, such as tourism. It’s already evident that this model has reached its limits,” he adds.
Public Investment
Henry Lei, from the Faculty of Finance and Business Economics at the University of Macau, believes that Sam Hou Fai wants to create sector-specific funds, increasing specialization. “It is possible to establish a development fund for modern finance, with set goals and reserved resources” for that purpose. “These new funds can be managed by experts in these areas, setting more realistic and effective goals given their specialization,” he explains.
However, this “acceleration” requires greater government investment, something that Henry Lei assures is possible. “Macau’s economy is recovering from the pandemic, and GDP has stabilized with an upward trend. This makes a proactive strategy feasible, which is why Sam Hou Fai intends to make greater investments to accelerate the development of new industries, which is very popular in the early stages.” This support “can help attract foreign direct investment into the new industries, contributing to speeding up the progress of Macau’s economic diversification,” he asserts, highlighting the need for “greater involvement and even stronger commitment from the Macau SAR Government, in using tax revenues from gaming to invest in and develop new industries.”
Attracting Talent
Sam Hou Fai also emphasized that attracting high-quality talent is a priority. “Economic diversity is also linked to the diversity of human capital,” says José Alves, mentioning the advantages of Hong Kong, Shenzhen, Singapore, and Dubai in terms of visa policies, tax exemptions, and more. “They demonstrate the importance of ambitious and specific policies for attracting professionals and businesses,” he highlights, identifying as a relatively easy starting point “the attraction of companies in relevant sectors and qualified professionals from Portuguese-speaking countries.” It’s worth noting that Sam Hou Fai reaffirmed the interest in maintaining Portuguese culture, which was, in fact, a surprise for Sonny Lo, who admitted he would like to know what that statement will mean for the composition of the Executive Council.
Although there is interest in new industries, José Alves argues that “diversification can and should” start “by revitalizing and modernizing already existing sectors.” This includes traditional commerce, “which can be relocated to modern spaces,” coastal areas, “which should be developed for leisure and tourism,” and the “rigorous preservation of architectural landscapes and historical heritage.” On the other hand, “we must promote cultural and artistic consumption as well as improve health and education.” According to the academic, these sectors can reach “levels of excellence,” as long as there is openness to welcome talent and external organizations. “We should not fear competition; rather, we should embrace it as an opportunity for growth and innovation.”
Evaluating Progress
However, in order to evaluate the progress of diversification, it is also necessary to have concrete data on its evolution. This was another point that Sam Hou Fai mentioned, suggesting the creation of a working group for this purpose. Henry Lei supports the collection of additional, “more technical and micro” data, such as the registration of patents for new technologies, import and export volumes of those technologies, loans to tech companies, and foreign direct investment in these firms. The academic recognizes that some of these indicators likely already exist for “internal use,” or without being “separated from the whole sample.” For example, he points to statistics related to modern finance, which are only published in the annual report. “If we get this data quarterly, researchers can make more frequent and accurate assessments,” which could perhaps “also help solve problems” by “presenting suggestions.”
For José Alves, only with clearly defined objectives can “greater accountability be promoted, and consequently accelerate the execution of the proposed strategies.”
