Diplomacy

The House Always Wins

Macau's Wealth Partaking Scheme

Macau’s Wealth Partaking Scheme expands in 2018 with citizens receiving a larger share of the city’s profits.

The world’s gambling capital continues to see consistent growth in its casino business, which could be good news for its citizens.

Since 2008, the Chief Executive of Macau has implemented a “Wealth Partaking Scheme” that sees yearly cash distributions to permanent and non-permanent residents with no questions asked.

The amounts are admittedly small for the city’s cost of living, but they have been increasing.

In 2018, every permanent citizen of Macau will receive MOP10,000 (USD1,250) from the government, while non-permanent residents will receive MOP6,000 (USD744).

This represents a MOP1,000 increase for permanent residents and an MOP600 increase for non-permanent residents when compared to 2017.

This is the first time since 2014 that the handout has been increased.

The legal decision to provide these dividends needs to be renewed by the government every year and there is no obligation for it to do so.

Currently, rents in the centre of Macau range at around MOP7,000 per month, and MOP6,000 outside the city center, so the cash handout can’t really be considered anything other than a small bonus.

Macau has done well for itself in recent years, particularly since the handover from Portuguese rule to China in 1999. Its flourishing gambling business has seen the city’s GDP grow from just under USD6.5 billion in 1999 to over USD50 billion in 2017, according to World Bank figures, with foreign reserves standing at over USD68 billion as of September 2018.

The relatively small population of Macau, which stands at around 630,000 people, makes it one of the world’s richest nations according to GDP per capita, in second place after Qatar.

It is estimated to take first place by 2020.

It is this fantastic economic growth, which registered a budget surplus in the last fiscal year nearing 10% of GDP, that allows the Macau government to be so generous with its citizens.

However, the reasons behind the handouts might not be as altruistic as they seem. In his address to the nation this week, the Chief Executive of Macau Special Administrative Region Fernando Chui underlined that the wealth redistribution program is designed to maintain a “good social atmosphere” in the city.

Critics call it a form of bribery to attempt to curb the rising social issues and protests witnessed in Macau in recent years.
However, the calming effects of the handouts may be fading, as on Sunday, just three days after the announcement, approximately 1,000 workers joined in a protest in the city.

The demonstration was against changes to the Labor Relations Law which could allow the private sector to force employees to work during public holidays.

Mr. Chui’s announcement also comes just before he is to step down as Chief Executive.

He has already fulfilled the maximum two mandates permitted by law, and will be succeeded by the winner of the 2019 election.

While cash handouts are not exactly common around the world, a similar system to the one in Macau was implemented earlier this year in the Hong Kong Special Administrative Region, where the government handed out around USD510 to about a third of the city’s population, also thought to be directed at curbing social dissatisfaction, particularly among its poorer communities.

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