The weight of the gaming sector on Macau’s GDP is currently 38.3%, down from 51% in 2019. However, these numbers cannot be seen as a victory for economic diversification. Gaming revenues have significantly dropped with the decline of the VIP sector, and while the mass market is growing, it is unlikely to be large enough to compensate for this loss.
The tourism (gaming) industry has assumed leadership in driving Macau’s diversified development. The gaming operators, by contractual obligation, are tasked with doing a bit of everything. On the one hand, this weakens the role that the government should play—and reduces its ability to manage it in the future; on the other, it concentrates activities that could serve as opportunities to reshape Macau’s business fabric—with many difficulties in facing these large competitors or in competing with neighboring regions that are becoming increasingly accessible.
Hence the need to revise some of the solutions already presented. The gaming operators should focus on their core activities and only fund those initiatives that the government deems necessary. The structure and model of diversification, or even urban revitalization, should be the responsibility of the public administration, because to relinquish this responsibility means delegating crucial “know-how” that is needed to reverse the economic crisis faced by small and medium-sized enterprises.
It would be great to have fresh talent, capable of bringing new ideas, but we continue to face difficulties in attracting talent, almost by self-sabotage. The talent attraction programs are good; few would argue otherwise. The needs have been identified, and models have been created for bringing talent to Macau. But they hit a very simple principle: no one wants to come with one-year contracts. And for those who argue that it is necessary to protect the local population, I advise them to listen to Billy Chan, who in the last debate on MBtv at the Rui Cunha Foundation, admitted that the medical research department at MUST has had difficulties in recruitment. In this case, who is really benefiting? On the other hand, few are sufficiently qualified to meet the highly demanding requirements of the programs. There is much that can be done in between extremes, and the leap doesn’t need to be larger than the length of the leg. It’s enough for it to work in order to create an exponential leap in the diversification strategy.
Sam Hou Fai promised studies to arrive at scientific solutions. He has already put forward concrete ideas and seems less conservative in the use of public funds. Very well. Regardless of the outcome, we must face reality: even the most brilliant ideas cannot counteract phenomena that are impossible to reverse. Property owners cannot rent shops, not even to large retail companies with a long tradition in the city. The decline in business makes it impossible to risk new investment. If they can’t do it, imagine those with less capacity. There is no confidence in the market, and there are more than enough reasons for this.
We need new industries that are less tied to tourism consumption. That is true diversification. In the industries of diversification, the “1+4” model condemns Macau to rely too much on the tourism industry. We may be creating a future very similar to the past—which is proving to be of little use today.
Executive Director of PLATAFORMA
