The drama of the disease and the crisis of the cure
On the eve of the new gambling cycle, which will never return to the crazy golden years, the numbers clearly show the consequences of a transition, to some extent, unexpected; especially in form and timing.
Between January and October 2022, the Macau government collected 29 billion patacas in taxes (36 percent of the expenditure), having recourse to 63.2 billion patacas from the Financial Reserve to support the accounts. For those who produced seven times the revenue of Las Vegas… here is the harsh reality.
This is not an economic development plan.
It is the raw consequence of a perfect storm, which is raging across China: the unprecedented attack on the junket model, and capital flight on the mainland, comes in the wake of a fierce fight against the most powerful elites in the Communist Party and the regime; in the midst of an economic downturn resulting from the Covid-zero policy; and during an unprecedented political transition in Beijing.
From Xi to Xi, the transition is marked by a very strong ideological component that, at least in the short term, retracts investment and the free movement of capital; in parallel fed the demonization of the Chinese regime by the US empire, which assumes China as the main threat to global hegemony.
It is a lot of things together…Perhaps not all of them measured in their real extent, especially in the circumstance of overlapping one another in such a short space of time. Macau could never escape unscathed from the onslaught of corruption and capital flight.
It was absolutely unavoidable to clean the “washing machine”; not only for internal political reasons, but also to control its external effects.
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And it imposes the truth to recognize that Beijing has been warning for more than a decade that it would do so; repeating until exhaustion the imperative of economic diversification; through regional integration and the Lusophone platform. Everyone knew it; but it seemed like a good idea to prolong the state of denial.
Now we see that it didn’t go well.
As much as it hurts, it is not intellectually honest to cry crocodile tears for a development model that everybody knew what it was… as if it were possible to advocate that it was healthy, that it promoted autonomy, or freedoms… That doesn’t make any sense.
What it actually created was multibillionaire elites, hyperinflation entropies to sustainable development and economic diversification…but also the unhealthy distribution of GDP per capita.
The problem is not the end of the model; but rather the evidence that, at this time, no alternative, intermediate, complementary economic models are in place…which kills revenue, retracts investment and job creation…undermining the spirit of the times.
It is the responsibility of mature governance to frame all this, in time and space. The drama is far from being only in Macau.
Across the border, right next door, images that escape the control of social networks show riots, in Guangzhou, that are impressive for their size and significance. They are rare – they were not even supposed to be – and violent: overturned cars, arson, defiance of the police… and harsh intervention by special forces.
There are reports of similar scenes in Shanghai, and in other cities… In the social networks there are many complaints of delayed salaries in the civil service – in several provinces – and limits to the withdrawal of savings.
The bank accumulates bad loans from the provincial governments – especially in the financing of construction – but now also in loans for buying houses… And the official figures assume that the provincial governments’ accounts are all – or almost all – below the red line.
Things are not easy at all.
And the Central Government gives several signs that it realizes the potential danger of dissatisfaction, responding with ever tighter control to everything that is going on; and to all those who represent everything they believe needs to be avoided. As indeed always happens in the Chinese Communist Party, whenever it feels the stability of power threatened.
The dilemma facing the CP today, in the short and medium term; is to know what will do more harm to Macau, to China, to the party itself…
Whether the drama of the disease or the crisis of the cure.
*General Director of PLATAFORMA