Thriving beyond expectations
Written on June 7, 2006 by admin
June 6, 2006 - BESIDES China, where are the other bright spots of economic growth in Asia in recent years?
One might think of India, another rising economic power in the East. Or perhaps Vietnam, whose gross domestic product (GDP) growth is ranked second in Asia after China.
Anyone thought of Macau, China’s special administrative region?
The region’s economy expanded by 6.7% last year, having achieved strong double-digit growth in the preceding three years with the high of 28% in 2004.
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“Macau is entering its most exciting phase of economic development now,” Tam Pak Yuen, the region’s Secretary for Finance and Economic, told a well-attended investment forum organised by Euromoney in Macau.
Such exciting growth has been fuelled by the influx of investments after its casino business was opened up for foreign players.
International gaming groups like Sands and MGM Mirage are pouring in money to build five-star hotels and luxury casinos to transform Macau into a world-class resort city.
Also, the growing number of visitors from China who could afford to blow stacks after stacks of chips on the gambling tables is another big boost to its economy.
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In an environment that has scarce natural resources, little to offer in financial services and with a manufacturing industry that is losing its competitive edge to China, tourism forms the backbone of the former Portuguese colony’s economy.
Macau was in the economic doldrums when financial crisis swept across Asia in 1998, and this was followed by the outbreaks of the severe acute respiratory syndrome (SARS).
However, it recovered speedily after the SARS outbreak, thanks to the burgeoning gaming industry.
The economic rebound was quicker and sharper than the neighbouring Hong Kong, which had outshone Macau in terms of economic progress since colonial days.
There was a big contrast across the straits.
When people were losing jobs and restaurants were closing down in Hong Kong, Macau was actually enjoying robust growth that it never had in recent decades.
“We did not expect the economic growth pace to be that strong.
“It was beyond our expectations,” said Joao Manuel Costa Antunes, director of Macau Tourism Board.
Almost everyone, from global fund managers to the local souvenir shopkeepers and hotel bellboys, concur that the government has used its trump card right by liberalising the casino industry.
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The move is seen as bringing a new lease of life to Macau’s tourism.
Economists are impressed with the good growth.
The man in the street has no problem finding a job, and they are certainly not complaining of the low income tax of 7% to 12%, as the lucrative tax revenue from the gaming sector has filled the government’s coffers.
“Those young people who study in the universities now are almost guaranteed of finding a job after graduation,” said Joao.
More youngsters who had left Macau for better job prospects in Hong Kong are returning home to ride on the boom.
Being the only place in China where gambling is legal, Macau is in the right position to capture the sizable Chinese market before others have their shares.
“Macau’s (economic) risk is linked to China. Its growth will continue as the Chinese get wealthier,” Sheldon Trainor, managing director of Merrill Lynch (Asia Pacific) Ltd, said at the investment forum.
The micro risks would be the balance between supply and demand capacities (i.e. hotel rooms and gambling tables), he added.
Technorati Tags: macau, Macau Tourism
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