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if disputes arise.14 T hus, the high level of autonomy promised by the central government in the Basic Law is conditional on the sensitive and responsible exercise of restraint by the central government.
In conclusion, a mainstream view tends to see autonomy mainly from a top-down “power from” perspective. Autonomy is assumed to have been accomplished once it is laid down on paper. This is not a realistic assumption because the devolved powers are put into the hands of an unaccountable chief executive whose ascent and removal from power is largely dependent on the whims of the center. The repeated reminder that Macao’s autonomy is based on a grant from the center, and is not an inherent right, could only suggest that deliverance from central involvement is tenuous.
23.3 Autonomy as “Freedom to”
The second dimension of autonomy is defined as the freedom to use devolved power in carrying out the functions of the government. It is assumed that the closer the locus of power to people, the more effective and responsive the government is in addressing people’s needs. In turn, an effective and responsive local government also reduces the need and excuse for central government’s meddling in local affairs. However, in Macao, the creation of an executive-led government did not improve the efficiency and effectiveness of the government. On the contrary, corruption, power abuse, and mismanagement become commonplace, and caused much social instability. When the Macao government shows increased signs of stasis in containing these crises, the central government has become more prone in dictating policies to the local government. All of these are signs indicating troubles in the operation of Macao’s autonomy. The remainder of this section provides a brief analysis of the exercise of autonomy by the Macao government.
23.3.1 From Recession to Take Off
The Macao SAR government inherited from the preceding colonial regime a defective administration plagued with a number of serious problems, such as corruption, red tape, overlapping of duties between departments, and poor policy formulation capacities. Portuguese foot-dragging in localization led to the promotion, just prior to the transition, of many young and inexperienced civil servants to senior positions with very little time for them to hone their skills and leadership to be effective.15 On the economic front, Macao was plunged into a serious economic depression and an outbreak of gangland warfare between various triad groups operating in Stanley Ho’s casinos, just before the transition.16 Apparently, it was a turf war fought over dwindling clientele in the wake of the Asian financial crisis and a battle for domination in preparation for the uncertainty over the
14See Wang (1999: 193–204) for an insightful account on the restrictions that can be placed by the central government on the autonomy granted to Macao. Concerns on judicial independence in Macao have also been raised by Kerbs (2000) and Luke (2000: 746).
15These problems have been well studied in Lo (1995), Yee (2001), and Lam (1991). For the localization issue, see especially Yee (2001: 41) and Lam (1991: 349).
16Stanley Ho won the monopoly to operate Macao’s casinos in 1962. He is credited with modernizing Macao’s gambling business by bringing in Western-style games and attracting tourists into the enclave. His business empire stretched to cover almost every corner of the Macao economy. This grip was only slightly loosened in 2002 when casino liberalization brought in new competitors.
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impending regime change. Bombs were thrown; machine guns were fired; hired gunmen riding on high-speed motorbikes raided the enclave. The first casualty in this episode was apparently Stanley Ho. The infiltration of organized crime into his casino empire was exposed, and even worse, the warfare demonstrated his inability to impose a modicum of control over those elements.17 The popular despair on the law and order situation inspired the desire for a fundamental change to the status quo. It was generally believed that the decision to liberalize the casino monopoly in order to shake up established practices was made by Beijing well before the transition (Lo 1999: 61). Eventually, the gangland warfare died down ostensibly after the capture of a key triad leader, Wan Kuok-koi (alias Broken Tooth), in May 1998. But the real reason was said to be the placement of China’s Public Security Bureau agents in Macao enforcing the peace among the triads, to be backed up by the presence of a garrison of the People’s Liberation Army in the city.18
With China underwriting the law and order of Macao, transition was able to take place without hindrance. The first chief executive of the Macao SAR government, Edmund Ho Hau Wah, was presented as an effective leader, well honed for political leadership under the wing of his deceased father, Ho Yin. The elder Ho had been the leader of the Chinese community in Macao for a long time, and was a trusted political ally of Beijing. Some of the urgent tasks facing the Ho government were to revive the economy, to liberalize the gaming sector, and to reform the colonial bureaucracy in order to improve efficiency and to reduce popular alienation. Ho did introduce some public sector reforms to increase efficiency.19 The economy also gradually emerged from a deep recession shortly after his assumption of power.20 All these helped to project Ho as an effective leader. Unfortunately, this image was seriously tarnished because of his inability to handle the social problems that emerged from the gambling liberalization.
Many of the causes of the current problems facing the Ho government were laid in the early years of his government when he oversaw the process of the breaking up of the casino monopoly. Initially, three concessions were granted. But later, the government allowed each of the original concessionaires to sell a so-called sub-concession to another casino operator. Thus, the number of suppliers doubled overnight.21 Its impact has to be examined together with the very lax and liberal regime of casino regulation (Ramirez and Pessanha 2008). There are very few restrictions on the
17Ho sub-contracted the operation of VIP rooms in his casinos to collaborators, thus opening the door for triad infi ltration. For instance, the key 14k triad leader, Wan Kuok-kui, operated a VIP room (the Wan Hau VIP Club) in Hotel Lisboa. His opponent Ng Wai (alias Market Wai) operated the New Century Casino in another of Ho’s facilities (see Booth 1999: 35–365). For a general discussion of the relations between the VIP room and organized crime, see Leong (2004), Lo (2005: 207–12), Viana (2000), Liu (2001: 193–210), and Pina-Cabral (2002: 205–21).
18Beijing claimed the stationing of a PLA garrison in Macao was a demonstration of Chinese sovereignty. But commentaries widely acknowledged that the presence of the PLA served to send a signal of China’s determination to stabilize peace and order in Macao (Lo 1999: 62–63; Pina-Cabral 2005: 20–21). This announcement caused a row with Lisbon that claimed the stationing of troops was never a part in the discussion of the Macao settlement.
19Edmund Ho tried to restructure the departments and improve service qualities. However, according to a critical analyst (Chou 2004: 63), “Public Sector reform in Macao did not address core problems in the public sector in Macao, i.e., poor personnel practices, the inadequate strength of the Legislative Assembly and the Commission of Audit, and the overlapping rootles among government departments.”
20Real GDP growth rate was in the negative range before Ho took over power. The economy started to take off after 2003. This trend can be gauged from the real GDP growth rates from 1998 to 2003: –4.6%, –2.4%, 5.7%, 2.9%, 10.1%, 14.2% (see http://www.dsec.gov.mo/index.asp?src=/chinese/indicator/c_pib_indicator. html, accessed July 4, 2008).
21See McCartney (2006: 49), Lo (2005), and especially MacDonald and Eadington (2006).
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number of casinos and the number of gaming tables (and slot machines) each casino operator is allowed to run. Doubling the number of casino operators thus added to the craze of expansion as each operator scrambled to set up an operation and claim its share of the market. This expansion was further fueled by the practice of sub-contracting out VIP rooms, which is widely attributed to be a channel for the penetration of undesirable elements into the casino, and which is unfortunately allowed to continue in the post-liberalization era despite all the fanfare for the emergence of a more regulated and clean system.22 China facilitated this expansion in 2003 by relaxing the exit restriction of its citizens to visit Macao in a policy known as Free Individual Tourism (Zhāng 2007: 657). Thus, thousands of Chinese residents flooded into Macao to enjoy the excitement of casino gambling, which is still illegal in the Mainland.
Statistics show that Macao has enjoyed spectacular economic growth since the gambling liberalization in 2002. For the 6 years between 2002 and 2007, average annual real GDP growth registers a stunning 17.3% increase. Gaming revenue shoots up from MOP23,496 million to MOP83,847 million,23 representing a growth of 357% during the same period. The number of gaming tables increases 13 fold from 339 to 4375. The number of hotel rooms almost doubles from 8,954 to 16,148. Annual number of tourist visitation increases from 11.5 million to 27 million. Gambling tax as a percentage of total government income jumps from 51% in 2002 to 76% in 2007.24
23.3.2 Politics of Growth
Unfortunately, the government appeared to have paid very little attention to the negative consequences of an overheated economy, and was caught unprepared when these problems exploded into a series of demonstrations in 2006 and 2007. The huge influxes of tourists have overloaded the transportation system, aggravated by the procrastination in approving the construction of a mass transit system. Rapid urban development led to the contraction of urban green space. Crime data were said to be on the increase with the proliferation of casinos. Many crimes were committed by visitors from China.25 The red-hot economy intensified inflation pressure already worsened by a weak US dollar and a strong Renminbi.26 However, the most problematic of all must be reserved for the government’s land and labor policies.
Since gambling liberalization, land has become a very valuable resource for the tiny island of Macao, flooded with casinos and other capital scrambling to find a place to build their grandiose resorts, entertainment and commercial facilities. However, the Macao government does not have a transparent and accountable sale system of public land. Land could be allocated by government
22There are a number of good studies on the VIP room system and its connection with organized crime. See Leonard (2006), Siu (2006, 2007), Godinho (2006), Eadington and Siu (2007), and Wang and Eadington (2007).
23The Macao Pataca (MOP) is pegged to the Hong Kong dollar at a fixed exchange rate MOP1.03 to HK1.0. The latter is pegged at a rate of HK$7.8 to US$1.0. Thus, US$1 is equal to around MOP8.
24Gaming table figures come from the website of the Gaming Inspection and Coordination Bureau (http:// www.dicj.gov.mo/CH/Estat/DadosEstat/2007/estat.htm#n1, accessed May 17, 2008). All other figures are from the Macao Economic Bulletin, various issues (http://www.dsec.gov.mo/index.asp?src=/english/html/e_ general.html, accessed May 17, 2008).
25See Zhāng (2007). See also the June 2008 special issue of Macau Business entitled “Boom City: the Good, Bad and Ugly.” It gives a 4-year overview of the negative impacts of rapid economic growth.
26Many food items are imported from China, whose currency, Reminbi, has been on an appreciation spree since 2006. See Macao Daily 2/9/2007. The inflation rate increased from 1% in 2004, to 6.7% in the final quarter of 2007.
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through deals struck with developers behind closed doors without much democratic oversight (see South China Morning Post 23/11/2005). During the colonial era, this had been pointed out as a major source of corruption (Lo: 1995: 179–180). The situation got out of hand after the transition. Government critics have repeatedly pointed out that politically connected developers have obtained land at unrealistically low prices, and have called for public auction in land sale.27 Concomitantly, the government did nothing to curb speculation that sent real estate prices well beyond the reach of local residents, and generated an inflation spiral.28
The corruption in the land sale system was exposed when the secretary for land and transport, Ao Man Long, was arrested in December 2006, and subsequently put on trial in 2008. He was found to have received huge kickbacks from land developers in exchange for the approval of sales of public land at unrealistically low prices. The total amount of his illegally gotten money is said to be more than MOP800 million. His subsequent trial revealed widespread abuse of power and collusion with developers. It gave a rare glimpse of the arbitrariness and lack of internal discipline within the government machinery. In January 2008, Ao was convicted and sentenced to 27 years in prison.29 The biggest damage, however, is on the integrity of the political leadership. The chief executive has always tried to project a strong leadership by scapegoating policy errors onto the civil service, which, most observers would probably agree, is in dire need of reform to rid it of the inept and inefficient practices inherited from the colonial era. The Ao case demonstrated that the political leadership was not exempt from its share of the problem. The lack of subsequent reform in the land sale system and the failure to deal with other corruption cases further eroded popular political confidence in the regime.30
27See the special issue on the land sale system of New Macau, (issue 32, July 2006) (see http://www.newmacau. org/expired/32web.pdf, accessed July 5, 2008). New Macau is the publication of the New Macao Association, whose two most well-known members are Legislative Assembly members Ng Kuok Cheong and Au Kam San.
28The government is accused of fueling the speculation by allowing the real estate residence scheme to be continued well after its function of reviving the depressed property market has expired. Under this scheme, any person who purchased real estate valued at more than one million Patacas qualified for a Macao residence status for the purchaser and his/her immediate families. This was considered a bargain deal considering the relatively small amount of investment, the number of beneficiaries of the residence status, and the prospect of making a fortune from a red-hot property market (see Choi 2006b).
29See Jesus (2008: 18) and Pinto (2008: 25) for post-mortem analysis of the Ao case.
30A committee was set up in the Legislative Assembly to study the land sale system (Jornal Do Cidadao, 6 January 2007). Minor procedural changes were recommended, but institutional change obligating the government to sell land through a more transparent system has not been put in place. The request for Legislative Assembly endorsement for land sale deals entered into between the government and developers has been strongly resisted. In effect, there is no major change to the land sale system after the Ao Man Long case. As late as June 2008, land was still assigned to private developers far below market price (Macao Daily, June 26 & 27, 2008). In November 2007, the government proposed to give a wider mandate to the CCAC to investigate corruption in the private sector (Macao Daily, November 14, 2007). But it has dodged the more fundamental issue of tightening the existing anti-corruption laws and imposing heavier penalties on bribery cases in the public sector. Moreover, although the Ao case concluded with a guilty verdict and a heavy jail sentence, public opinions found it hard to believe that Ao could spring such a huge corruption web without other well-connected political collaborators involved (Jornal Cheang Pou, October 2, 2007). At the same time, the Audit Commission released a series of damning reports on the over expenditure, wastefulness, and poor quality of the sports facilities built for the 2005 East Asian Game (Macao Daily, November 2, 2006). However, the chairperson of the East Asian Games and head of the Macao Sports Development Board (MSDB), Manuel Silverio, was not subject to any disciplinary action, let alone criminal prosecution. He was probably asked to resign and was let go in a low-key approach from his chairpersonship in the MSDB in 2008 (Macao Daily, March 4, 2008). It is quite clear that the government has every intention to treat the Ao case as an individual incident, if not an accident. There is no political will to deal with corruption in any systematic way.
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The importation of migrant workers is another issue that has proven to be controversial and can galvanize into major social conflicts. Unfortunately, the government has never demonstrated the political will or the finesse to formulate a consistent policy that can balance various interests, thereby putting the issue to rest once and for all. The migrant worker program was decreed, in the late 1980s, in a rudimentary government order without clearly spelling out, for instance, the measures for protecting local workers from outside competition, though the decree stipulates that their interests should not be undermined by the program. The demand for protection (such as a maximum import quota, minimum wage, etc.) has become the key source of agitation from the workers ever since. But the government has never taken them seriously. Instead, it has resorted, from time to time, to making ad hoc concessions, such as temporary suspension of imports and the increasing of unemployment benefits, to soften demands. The migrant worker, as a primary source of grievance for the working class has become a perennial conflict in Macao politics. It has been allowed to drag on, thus turning it into a time bomb that could cause substantial damage to the reputation of the government at a time when it could hurt most. Employers maintain that Macao’s workforce is too small, and cannot furnish the required labor power to drive the economic growth. Workers complain that migrant workers depress their wages and take away their jobs. They point their fingers at the government for not performing the role of a fair gatekeeper in allowing too many migrant workers into too many occupational sectors. Between 2001 and 2007, the number of migrant workers shot up from 25,925 to 85,207, representing a 340% increase. It is estimated that there is one migrant worker for every three local working people. This has not taken into account the prevalence of illegal workers in the economy due to relaxed law enforcement.31
The first mass demonstration against the migrant worker issue took place on May 7, 2000. It was then revived in 2006. Since then, May Day demonstrations appear to have been consolidated into an annual ritual to protest against the migrant worker issue. After the exposure of the Ao Man Long case, the themes of the 2007 May Day demonstration were broadened into anti-corruption, clean government, with open calls for the stepping down of Edmund Ho. The most politically damaging event during the demonstration, however, was the firing of five warning shots by a policeman in an essentially peaceful demonstration. World media attention was immediately drawn to the negative side of Macao’s dramatic economic growth, and the inability of the Ho government to maintain social stability.32 This demonstration was widely seen as the turning point for the Edmund Ho government whose popularity slipped precipitately. Since then, a number of demonstrations have been held, many of them linked to the migrant worker issue as organizers realize that this is the hot button issue that could bring the rank and file onto the streets.33
31See Choi (2006a) for an overview of the migrant worker issue in Macao.
32See for instance the report entitled “Macao: Success brings Its Problem,” appeared in Financial Times, June 14, 2007 (http://search.ft.com/ftArticle?queryText=Macao%3A+Success+brings+its+problem&aje=true&id=070614000085 &ct=0&nclick_check=1, accessed May 6, 2008).
33The best attended was the demonstration held on October 1, 2007 (China’s National Day) against the new traffic law. Demonstrators drove their motorcycles onto the street protesting against a poor traffic and public transportation policy and insufficient motorcycle parking spaces forcing them to park illegally (see Jornal Va Kio, October 2, 2007). The December 20, 2007, demonstration that coincided with the anniversary celebration of Macao’s reversion to China was organized by the New Macao Society demanding political reform and democratization (Joranl Va Kio, December 21, 2007).
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