MB 109 | May 2013 by Macau Business

MAY 2013

Illustration: Rui Rasquinho

Economy & Finance 28 Plastic makeover Stored-value and prepaid cards are becoming increasingly popular

Politics 34 Money politics The limit on campaign spending for seats in the legislature is higher here than in Hong Kong

Greater China 38 Expansion efforts Hong Kong tackles shortages in places at international schools 40 Worrying gap The mainland’s resources boom fails to benefit ethnic minorities

Society 45 Striding out LGBT community becomes more vocal

Transport 48 Happy landings The airport is back to growth after four years of passenger declines 52 The 2015 runs late Construction of the LRT railway has yet to commence on the peninsula

MAY 2013

Property 54 Sense of duty The government has decided to keep the special stamp duty as it is 56 Above it all Mainland developer invests in Penha Hill low-density project

Gaming 60 Forty-billion pataca question When will Macau reach MOP40 billion a month? 66 The zombie commission The Gaming Commission was revamped three years ago but no one has heard of it since 70 Mark his words Templeton’s Mark Mobius steps up investment in gaming chips 72 In smoky rooms Most smoking areas inside casinos don’t comply with air quality rules 74 Houses of cards As construction ramps up in Cotai, so do concerns about the availability of skilled labour

Photo: Carmo Correia

110

Special 79 G2E Asia All you need to know about Asia’s premier gaming trade show and conference event

Hospitality 110 Savoir faire Sofitel wants to use its French pedigree to differentiate itself from the competition

Human Resources 116 Money, lies, greed Fake job promises continue to lure Filipino workers to Macau

Marketing 121 Persuasive argument The Effie China Awards want to catch the attention of the marketing businesses here

Luxury 122 Rollers on a roll Rolls-Royce introduces its latest model

MAY 2013

Arts & Culture 124 Renaissance man Carlos Marreiros to represent the city at the Venice Biennale 128 Radical images Photographic works by French philosopher Jean Baudrillard on exhibition at Tap Seac Gallery

Opinion 12 From the publisher’s desk Paulo A. Azevedo 15 Editorial Emanuel Graça 26 Torch of learning José I. Duarte 37 Many questions, one answer Keith Morrison 42 China’s dream world Minxin Pei 113 Arrested development Gustavo Cavaliere 119 The power of focus André Ribeiro 134 Asia’s resource scramble Brahma Chellaney

MAY 2013

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pazevedo@macaubusiness.com PAULO A. AZEVEDO FOUNDER AND PUBLISHER

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A LABOUR-THEMED TRAGEDY

P When will Chief Executive Fernando Chui Sai On say enough is enough? When will he follow Theseus’ mythical deeds and slay the Minotaurs that terrorise the city?

MAY 2013

olitics in Macau requires as much patience as what you would need to navigate your way out of the Minotaur’s labyrinth. It is often hard to find any common sense in it, which in turn harms the common good. The public is left trapped in the centre of maze-like policies, resembling the labyrinth built by the architect Daedalus and his son, Icarus, to hold the creature from Greek mythology that had a bull’s head on a man’s body. In the case of labour policy, I have called attention to the incomprehensible restrictions on imported workers for years. I am not alone. A choir of the city’s leaders has spoken against this self-inflicted harm to business. The substantial size of the opposition to this series of restrictive policies is remarkable in a small city where most people will tolerate anything in name of harmony. Slowly, very slowly, common sense is returning, triggered by basic economic problems that highlight how wrong the labour policies are. Little wonder that Chief Executive Fernando Chui Sai On has finally admitted, because the labour shortage is expected to worsen by 2016, it is perhaps time to start discussing whether the city needs to import more overseas talent.

Better later then never. However, Mr Chui is short of being as courageous as Theseus, the Athenian hero who killed the Minotaur and found his way out of the labyrinth. Mr Chui is testing the waters to see if he can gather support from the usual suspects, the ruling elite who, on more than one occasion, have made it clear that promoting sustainable growth is not on the top of their agenda. The city could learn from Singapore’s example. Its government, while keen on protecting its citizens’ right to work, has been careful not to overdo measures that restrict overseas labour. Officials there know it would raise the cost of doing business and, in the end, the Lion City and its citizens would lose out.

Devoured by beasts A labour shortage is not the only beast Macau must tame. At the Legislative Assembly last month, Mr Chui said the dependence on gaming and lack of land are hindrances to development. He was right – just five years late. However, there is nothing to be gained from demonising the gaming sector. It is the biggest industry and the only one in which Macau is competitive internationally.

It is not something to be ashamed of, because gaming is not “bad”. Shady gaming practices are undesirable, however. If Macau evolves to become a city that provides world-class entertainment and accommodation, that hosts international conferences and uses the piles of revenue to develop other industries, the reliance on casinos can be a positive. The problem is the government’s continuing lack of vision and strategy. The government has no idea how it should use the ever-growing reserves. As for a lack of land, the problem has little to do with limited size, but lies with the Minotaurs that control what land is available. There are some tycoons focused on their interests alone, and not on the city’s sustainable development. They see Coloane not as Macau’s green lung but its biggest greenfield building site. The greedy moguls control several monopolies, including food imports. Their actions reach inside the government, with many work tenders drafted almost as if they were made to fit a particular preselected candidate. When will Mr Chui say enough is enough? When will he follow Theseus’ mythical deeds and slay the Minotaurs that terrorise the city?

The public grows tired of sending our youths to be devoured by greedy beasts.

A fighting chance If policies and policymakers do not change, if some powerful private interests do not rethink their behaviour, one vision caught on film by four youngsters may become fact. The movie “2049” paints a gloomy picture of the year when the “one country, two systems” system ends in Macau. Director Perry Fok says the film depicts the slow death of Macau: Cantonese is forbidden, replaced by Mandarin; traffic is gridlocked, becoming unbearable; a single mortgage takes three generations to repay; people cannot bear the pollution; and, in Coloane, an extermination camp relieves the overcrowded city of its elders in exchange for subsidies to their children. It is a tale of untamed growth and wild destruction, Fok told Portuguese-language newspaper Ponto Final. It is no critique of the changes that might happen in 2049 but looks at the change in the 50 years from 1999. The silver lining in the tale is the wakeup call it delivers. The movie shows that not everyone has accepted, dully, the changes impacting Macau. Some are voicing discontent and want our leaders’ attention. Ponto Final’s telling headline says it best: “Poor us, as we have but money”.

MAY 2013

Editorial Council Paulo A. Azevedo, Emanuel Graça, Tiago Azevedo, José I. Duarte, Mandy Kuok Founder and Publisher Paulo A. Azevedo VOL.1 Nº109

pazevedo@macaubusiness.com

Editor-in-Chief Emanuel Graça emanuel.graca@macaubusiness.com

Assistant Editor-in-Chief Alexandra Lages alexandra@macaubusiness.com

Executive Senior Analyst José I. Duarte jid@macaubusiness.com

Art Directors Connie Chong, Luis Almoster design@macaubusiness.com

Hong Kong Bureau Michael Hoare (Chief), Anil Stephen michael.hoare@macaubusiness.com

Events Director Margarida Luz signature@macaubusiness.com

Special Correspondent Muhammad Cohen

Advertising Bina Gupta José Reis

jreis@macaubusiness.com

Xu Yu, Irene

Beijing Correspondent Maria João Belchior

irene.xu@macaubusiness.com

maria_belchior@yahoo.com.br

Media Relations

Manila Correspondent Max V. de Leon

GRIFFIN Consultoria de Media Limitada

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Assistant to the Publisher Laurentina da Silva ltinas@macaubusiness.com

Translations PROMPT Editorial Services, Poema Language Services Ltd, TLS Translation and Language Services Agencies AFP, Lusa

Office Manager Elsa Vong elsavong@macaubusiness.com

Photography António Mil-Homens, António Leong, Carmo Correia, Greg Mansfield, Gonçalo Lobo Pinheiro,John Si, Manuel Cardoso, MSP Agency, Naty Tôrres, Agencies Illustration G. Fox, Rui Rasquinho

editor@macaubusiness.com

Regular Contributors André Ribeiro, Branko Milanovic, David Cheung, David Green, Dominique Moisi, Eswar Prasad, Frank J. Fahrenkopf Jr., Gustavo Cavaliere, Hideaki Kaneda, José António Ocampo, José Sales Marques, Joseph Stiglitz, Leanda Lee, Keith Morrison, Kenneth Rogoff, Kenneth Tsang, Marvin Goodfriend, Pan Yue, Paulo J. Zak, Peter Singer, Richard Whitfield, Rodrigo de Rato, Robert J. Shiller, Sin-ming Shaw, Sudhir Kalé, Sun Shuyun, Vishakha N. Desai, Wenran Jiang

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Contributing Editors Christina Yang Ting Yan, Dennis Ferreira, Derek Proctor (Bangkok), Filipa Queiroz, Helder Beja, Joana Freitas, João Ferreira da Silva, João Francisco Pinto, José Carlos Matias, Kahon Chan, Kim Lyon, Lois Iwase, Luciana Leitão, Mandy Kuok, Michael Grimes, Sara Farr, Sara Silva Moreira, Sofia Jesus, Xi Chen, Yuci Tai

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emanuel.graca@macaubusiness.com EMANUEL GRAÇA EDITOR-IN-CHIEF

TIMING IS EVERYTHING

T Development of transport and logistics infrastructure by the government continues to lag behind. The government has been unable to provide the city with better infrastructure, on time or on budget

he second wave of casino development in Cotai has begun to pick up pace. Piling works at Melco Crown Entertainment Ltd’s Studio City have been completed and vertical progress should soon be evident, says Union Gaming Research. The second phase of Galaxy Macau is also progressing. Further east, both Wynn Macau Ltd and MGM China Holdings Ltd have broken ground on their land. Wynn Macau started foundation work last February and spent more than MOP600 million (US$75 million) on the Cotai project in the first three months of this year. All seems to be progressing smoothly, or perhaps not... Development of transport and logistics infrastructure by the government continues to lag behind. The government has been unable to provide the city with better infrastructure, on time or on budget. Works for the elevated light rail system are progressing unevenly. In Taipa, the construction of support piers is underway. On the peninsula, the hoardings are not yet up. First proposed in 2002, the light rail transit project has suffered major delays. It seems increasingly unlikely that trains will be running by 2015 as promised. Meanwhile, the airport expansion is on the back burner. A draft master plan was unveiled in 2011 but the document is pending final approval. There is no timeline for its execution. The nearby permanent Taipa ferry terminal should have been up and running by 2007. Instead, the latest official estimate says it will hopefully open to the public next year.

Construction works for the new border checkpoint to be built between Macau and Zhuhai in the north area of the peninsula have yet to begin. The project was announced one year ago but there are no estimates as to when it might open.

Out of excuses

The public continues to be kept in the dark about the Hong Kong-Zhuhai-Macau Bridge, scheduled to open to traffic in 2016. The land reclamation process for the artificial island where the bridge will land near Macau seems to be mostly ready. What about the rest of the project? The casino operators have kept their end of the bargain with the government. They have invested heavily in the city and in its human resources. The government, on the other hand, has yet to deliver on substantial transportation and logistics improvements to cope with growing tourist numbers. The two major exceptions are the Sai Van Bridge and the expansion of the Border Gate checkpoint. After the first phase of post-gaming liberalisation development, Macau became a city bursting at seams. If infrastructure improvements are still not in place in time for Cotai 2.0, the effects may worsen drastically. As it stands, Macau lacks additional capacity to cope successfully with more tourists. How will the city’s officials react when the new Cotai is up and running? Surely they will not again claim to have been caught by surprise by the growth in tourist arrivals. This time around, the excuse will not stick with the casino operators, the public or with Beijing.

MAY 2013

THEN AND NOW Nine before-and-after comparisons show how much Macau has changed since May 2004

CLOUD NINE Macau’s leading news source, Macau Business celebrates its ninth anniversary

What do Macau Business and the Sands Macao casino-hotel have in common? They were both born in May 2004, and both were the start of something new. The Sands Macao was the first foreign-owned casino to open after the liberalisation of the gaming market, putting an end to gaming mogul Stanley Ho Hung Sun’s 40-year monopoly. Macau Business was the city’s first successful privately owned news periodical in English, pioneering the way for other media projects that tap into an international readership. As Macau Business celebrates its ninth anniversary, the magazine’s circulation, the number of subscribers and its readership are still growing. The website, www.macaubusiness.com, is a premier source of daily news for Macau businesspeople and international investors. The free daily newsletter connects subscribers worldwide with Macau, giving decision-makers concise and to-the-

point news about the city. There is also an expanding social media presence on Facebook and Twitter, and the iPhone app ensures readers can have access to content anywhere and everywhere. Macau Business is number one in all these fields. But there are new challenges ahead. The convergence of conventional and online media asks tough questions. Macau’s lack of qualified labour makes it hard to find reporters that meet exacting standards. And the city’s closed-door culture creates obstacles to a free press that aims to maintain its independence and hit hard. The Macau Business team will continue to face up to these challenges as we have done over the past nine years, with the support of our readers, advertisers and partners. With your patronage, we hope to continue to thrive, always with the goal of providing the best journalism available in Macau, about Macau. The team at Macau Business

WHAT’S YOUR OPINION?

To mark its ninth anniversary, Macau Business is conducting a survey of its readers to help us make our magazine even better. The questionnaire is on the Macau Business website and takes just three minutes to answer. The survey is meant to help us to understand you better. It is your chance to tell us what you like in the magazine, what you dislike, and what you would like to see more of. The questionnaire is on the website throughout this month. Your answers will be anonymous and we will not collect or pass on your personal information. Please go to www.macaubusiness.com and give us your opinion. We value it.

MAY 2013

Macau had 12 casinos, all controlled by Stanley Ho Hung Sun, in May 2004. Today, it has 35 casinos, by official count, and six gaming companies

2 3

Nine years ago, the city had 25,000 imported workers; today it has more than 110,000

Macau faced deflation in May 2004; the annual rate of consumer price inflation is currently above 5 percent

5 6 7 8 9

One kilo of Thai rice cost MOP6.10 (US$0.76) nine years ago; it costs about MOP13.00 today

The unemployment rate was about 5 percent; now it is less than 2 percent

Only nine five-star hotels were open then; now, three times that number are open In 2004 the average home in Macau cost MOP610,000; today, MOP4.9 million Fewer than 61,000 private cars were then on the road; today there are more than 96,000 The city had about 72,000 Internet subscribers then; now it has an online community of 235,000

MAY 2013

INEQUALITY RISING The Macau Economic Association has released its estimate for Macau’s 2011 Gini coefficient

Inequality is rising in Macau, according to the latest findings from the Macau Economic Association. Last month, the body released its 2011 estimate of Macau’s Gini coefficient, an internationally used indicator to

measure income distribution in a country or region. According to the head of the association, Joey Lao Chi Ngai, the city’s Gini coefficient reached 0.4 in 2011, up from an estimated 0.35 in 2008. The government’s last estimate for the

Gini coefficient refers to 2007/2008, when it stood at 0.38, down from the 0.44 figure recorded in 2002/2003. A Gini coefficient of zero expresses perfect income equality, while a coefficient of one expresses maximal inequality. The Gini coefficient indicates a relatively reasonable income gap if the number is between 0.3 and 0.4. A Gini index between 0.4 and 0.5, however, signals a large income gap.

JOBLESS SUBSIDY TO GO UP BY 71 PERCENT

The Social Security Fund is planning to raise the unemployment subsidy by 71 percent to MOP120 (US$15) per day. The last time the unemployment subsidy was revised was in 1999. The government is also proposing to adjust the sickness allowance for those workers who have to be hospitalised to MOP120 per day, the subsidy for outpatient services to MOP90 per day, the funeral allowance to MOP2,200, and subsidies for marriages and births to MOP1,000 and MOP1,700 respectively. These increases are also around 70 percent. These subsidies were last updated in 1997.

MINIMUM WAGE COULD REACH MOP28 PER HOUR

The government has proposed a MOP23 (US$2.9) to MOP28 hourly pay rate as the minimum wage for cleaning workers and property management workers in Macau. The proposal was presented last month to the Standing Committee for the Coordination of Social Affairs. The committee comprises representatives of unions, employers and the government. The government has also proposed to raise the maximum severance pay for local workers. Currently, any monthly pay above MOP14,000 does not count, and severance pay cannot amount to more than 12 times the employee’s monthly pay. The government wants to raise the MOP14,000 cut-off to at least MOP17,000 per month. MAY 2013

CHINESE VICE-MINISTER WANTS MORE MACAU INVESTMENT

Macau should play a more active role in Pearl River Delta cooperation and in Hengqin Island investment, Wang Chao, China’s vice-minister of Commerce, said last month during an investment seminar in Macau. The Beijing official also voiced hope for a better partnership between the mainland and Macau in green technologies. In the first quarter, Macau investors opened 58 companies in the mainland, down by 3 percent year-on-year, while their investment amounted to US$100 million (MOP800 million), up by 7.6 percent, the vice-minister said.

MAY 2013

FISCAL RESERVE FAILS TO COPE WITH INFLATION It provided the government a return of less than 1.75 percent in first year of operation

The government’s fiscal reserve provided a return of less than 1.75 percent in its first year of operation, calculations by our sister publication

Business Daily show. The fiscal reserve contained MOP164.33 billion (US$20.5 billion) at February-end, according to the Monetary Authority of Macau. That

GRAND PRIX 2013 TO COST MOP230 MILLION

HSBC PULLS OUT OF MACAU’S INSURANCE BUSINESS

HSBC Holdings plc said last month that it is disposing of its general insurance business in Macau, run by the bank’s unit HSBC Insurance (Asia) Ltd. Its Macau insurance business will be acquired by QBE Insurance (International) Ltd, a unit of Australian insurer QBE Insurance Group Ltd. The sum involved in the deal was not disclosed. The sale is expected to be completed by the end of next month.

MTEL MAY GET LANDLINE LICENCE BY JUNE

Bureau of Telecommunications Regulation director Lawrence Tou Veng Keong said last month that Companhia de Telecomunicações de MTEL Ltda will possibly get a fixed-line licence by next month. A decision on MTEL’s bid will be “ready in this first half [of the year],” Mr Tou told reporters. He did not comment on the result but hinted that MTEL’s proposal was “good”, fulfilling all the government’s requirements. Locally-incorporated MTEL was the only bidder for the opening up of the landline telecommunications market in March last year.

MAY 2013

The Macau Grand Prix Committee forecasts that it will invest MOP230 million (US$28.8 million) in this year’s Macau Grand Prix. To mark the 60th edition, the organising committee has announced a two-weekend event for this year, including a total of 13 races. The first race weekend is set for November 9 and 10. The second is to be hosted from November 14 to 17. Last year, the Macau Grand Prix had a budget of MOP160 million.

is almost MOP65.5 billion more than when the reserve was first set up, in February last year. But most of that money – MOP63.75 billion – came from the 2011 government budget surplus, transferred to the reserve in January. The reserve’s return on its own investments was MOP1.73 billion. The result was “within our expectations,” the monetary authority told Business Daily. The average rate of inflation for the 12 months ended February stood at 6.16 percent.

MAY 2013

BUS SERVICE FEE HIKE BACKDATED TO JANUARY

The Transport Bureau will increase the service fee it pays to public bus operators by 23 percent. However, the increase will only be backdated to January 2013, instead of June 2012 as previously announced. The bureau did not explain why it changed its mind. The service fee hike will only be granted to TCM and Transmac. Reolian Public Transport Co will not get the subsidy increase yet because it has failed to improve its services, the government said. The hike in the service fee will have no effect on bus fares.

RESIDENTS LESS HAPPY ABOUT ENVIRONMENT

GAS IMPORTER EYES PRICE RISE

Sinosky Energy (Holdings) Co Ltd made a loss of MOP28.6 million last year

The city’s sole importer of natural gas, Sinosky Energy (Holdings) Co Ltd, hopes the government will agree by the middle of this year to an increase in the price of the gas it supplies, the company said in its annual report. Sinosky Energy made a loss of MOP28.6 million (US$3.6 million) last year. The company reported no revenue because the supply of gas remained suspended for the entire year to allow for the construction work on Hengqin Island and the laying of a new gas pipeline in Zhuhai. However, Sinosky Energy said it was financially troubled even before the suspension of the supply, as it was selling gas to Macau below cost price. The company’s annual report does not say how big an increase in price Sinosky Energy is aiming for.

CORRECTION: In the feature “Riches in rags”, which appeared in our April 2013 issue, the name of fashion designer Barbara de Oliveira Dias (www.diazbynature.com) was incorrectly reported as Barbara Silva Dias. We present our sincere apologies to Ms Dias and to our readers.

MAY 2013

Macau’s environmental satisfaction index dropped in 2012, according to the Environmental Protection Bureau, which compiles the index. The survey shows that in 2012, the environmental satisfaction index of residents fell to 5.25 points, from 5.40 points one year before. On this scale, 10 represents complete satisfaction, while zero stands for absolute dissatisfaction. To compile the index, over 1,600 Macau residents were surveyed during the second half of 2012.

EXTENDED OPERATING HOURS FOR LOTUS BRIDGE BORDER

The Lotus Bridge border checkpoint will open for two extra hours each day permanently by the end of this year, said last month the deputy director of the Administrative Committee of Hengqin New Area, Ye Zhen. The closing hour of the Lotus Bridge checkpoint will be pushed from 8pm to 10pm, the official said. Last month, during the Ching Ming holiday period, the operating hours of the Border Gate checkpoint were extended for two hours per day, but only during three days.

MAY 2013

Thirsty for knowledge

GOVERNMENT SURPLUS HITS MOP28.2 BILLION

Macau’s higher education sector continues to expand. Statistics for the current academic year show increases both in the number of students and teaching staff. Business and management continue to be the most popular areas

The government had a surplus of MOP28.2 billion (US$3.5 billion) in the first quarter of this year, according to official data. This is an increase of 19.7 percent compared to the same period last year. The amount is already coming close to the MOP41.1 billion surplus estimated in the 2013 government budget for the whole year. Revenue from direct taxes on gaming amounted to MOP29.5 billion between January and March, up by 12.5 percent.

INFLATION DROPS TO LOWEST IN TWO YEARS Macau’s inflation rate dropped to its lowest point in almost two years in March, official data shows. The Composite Consumer Price Index, the city’s main gauge for inflation, increased by 4.95 percent year-onyear, attributable to higher charges for eating out and rising rentals for dwellings, the Statistics and Census Service said. This is the lowest growth rate since April 2011, when the Composite Consumer Price Index increased by 4.88 percent.

27,776

The number of students enrolled in local institutions of higher education for the academic year 2012/2013, up by 5.9 percent year-on-year

33.6%

The percentage of non-resident students, up from 31.1 percent in 2011/2012

1,916

The number of teaching staff in local institutions of higher education, which represents a 4.1 percent increase over the 2011/2012 academic year

22.3%

The year-on-year growth rate in the number of PhD students, to 772 in the current academic year

272

The number of programmes available at the city’s institutions of higher education, down by one over 2011/2012

MAY 2013

SOURCE: TERTIARY EDUCATION SERVICES OFFICE

The number of higher education institutions in Macau, the same as last year. The government owns four

CONSUMER CONFIDENCE DOWN IN FIRST QUARTER The Macau consumer confidence index fell 0.5 percentage points in the first quarter of this year in comparison with the previous three months, to 87.9 points out of 200, it was announced last month. The index is compiled by the Macau University of Science and Technology. Among the index’s sub-indicators, confidence in the stock market dropped significantly, down to 85.5 points in the first quarter, from 88.9 points in the previous three months.

MAY 2013

26 JOSÉ I. DUARTE ECONOMIST, MACAU BUSINESS SENIOR ANALYST - jid@macaubusiness.com

Torch of learning OBSESSION WITH STATISTICS AND RANKINGS IS A POOR GUIDE TO ACADEMIC MERIT efore I begin, readers should be aware that I hold a teaching position at a university in Macau and that the comments made here are not aimed at any particular institution or person. I recently came across a text on teaching by American novelist Philip Roth. Reading it set my mind in motion about a curious conundrum of our times. Individuals commit an inordinate amount of their early years to school. It is quite possible for someone to reach the labour market for the first time when they are approaching their 30s, having spent about 80 percent of their lives up to that point in the business of studying. Families make enormous sacrifices so their young and, increasingly, not-so-young offspring can achieve all kinds of academic qualifications. Societies spend enormous amounts of money and other resources on education. East or West, no grand political statement is complete without an irrevocable commitment to education. Education and its supposed twin, knowledge, are seen as the main social devices that will bring about all sorts of good things and help overcome all kinds of evils. On that assumption, realistic or not, the keepers of the public purse are continually called on to open it in response to never-decreasing demands for support for all types of teaching and research institutions. Yet the common perception of education is at odds with the hopes placed on it. Many people complain that an increasing number of students seem to be learning smaller volumes of anything, and lack interest and curiosity about almost everything. People and companies alike complain that the education system does not prepare students for the requirements of the market and society, while graduates’ sense of entitlement and their expectations seem only to expand.

Gross rankings Specialists appear to know ever more about ever less, and experts are often awfully unaware of the systemic effects or consequences of their proposed solutions to this or that problem. Older generations look at youngsters and ask themselves what they have been paying for, as they underwrite, as taxpayers, dozens of more-or-less-failed experiments in education at all levels. Universities are the apex of the education system and research has become, rightly so, an important part of their activities. Research has also become a big source of funding and a university’s main hope of making it to the big-time. Obsessed with publication rankings, many universities commit ever more resources to research of doubtful interest. In the process, they create loads of fresh postgraduates qualified in hardly anything other than the often arcane fields that their dissertations were about – dissertations which nobody other than some of their assessors are ever likely to read attentively. Academic papers of limited interest or relevance pile up, testament to the boundless supply of recipes for publication success. Few will have any impact other than contributing to the publication and citation statistics that increasingly replace good judgement. MAY 2013

Meanwhile, meetings and conferences where there is hardly a hint of a real debate, are collected as ornaments to academic curricula.

Quintessentially human If this process goes too far, universities risk losing contact with reality, transforming themselves into intellectual, self-obsessed ghettos, expecting little from the outside world other than rising amounts of funding. Meanwhile, university teaching languishes, a poor relative whose company is endured but not welcomed. When it is not being ignored, teaching is easy prey to the peddlers of fancy theories, often equipped with an array of new technology tools. A few are even led to believe that teachers will become redundant, or that teaching will become some sort of a late reincarnation of Taylorism. Some – I hope many – universities will stay out of the gloomy picture painted here. Some will become centres of global excellence, irreplaceable sources of learning, creativity and initiative that will benefit the entire world. Others will focus on providing a well-rounded set of skills to their students, and on contributing positively to the improvement of the quality of life in their own communities. These universities will be the ones that will nurture the teaching ability of their staff as a valuable skill. They will not overlook that teaching is, first and foremost, a process of human interaction. Philip Roth expressed it better than I ever could: “It may be the twinkle in the eye when a light flashes in the student’s mind, or the subtle rise of the head as insight hits, or a purposeful nod as veils of darkness flutter amidst a gust of comprehension. “These moments are transformative for students. They also give meaning and hope to those who teach. However we make sense of the art and experience of teaching others, the studentteacher connection is a noble and quintessentially human experience.” We forget this at our peril.

MAY 2013

Economy & Finance

Plastic makeover About 1 million stored-value and prepaid cards are in use and the number is set to increase BY ALEXANDRA LAGES

ore consumers are using storedvalue and prepaid cards to pay for their purchases instead of cash, debit or credit cards. This makes a consumer’s purse lighter both figuratively and literally, as notes and coins make way for new kinds of plastic money. The local pioneer of stored-value cards, Macau Pass SA, and some Macau banks are leading the way by pushing novel ways of paying without cash. “The use of stored-value cards has been more common in recent years,” a spokesperson for the Monetary Authority of Macau told Macau Business. Before last year, only two companies were in the business of storedvalue or prepaid cards: Macau Pass SA and Banco Nacional Ultramarino SA (BNU). The Monetary Authority says the number of stored-value and prepaid cards issued grew by about 20 percent per year between 2009 and 2011, from

500,000 loaded with MOP26 million (US$3.25 million) to 760,000 loaded with MOP39 million. Last year the Macau branch of Bank of China Ltd and Industrial and Commercial Bank of China (Macau) Ltd (ICBC Macau) began issuing these kinds of cards. The Monetary Authority says that by the end of the year, the number of stored-value and prepaid cards issued had grown by over 30 percent, to about 1 million cards loaded with MOP58 million. It is estimated that more than 800,000 of the cards in use are Macau Pass stored-value cards. There is a wide variety of storedvalue and prepaid cards. What they usually have in common is that they are made of plastic, are the same size as a credit card, have a magnetic strip, bar code or embedded chip and store money to pay for goods or services. They may look like credit cards or debit cards, but

the holder neither draws down credit nor debits a bank account when using them.

Mister, spare me a beep With stored-value cards, the money is stored in and dispensed by the chip. This means losing a stored-value card is like losing cash. With prepaid cards, the money is stored in and dispensed by a remote database, which the card gives access to. This means that if a card is lost or stolen, the holder may recover the money if the issuer has a record of who owns it. Consumers usually use stored-value cards for small purchases, like fares on public transport or shopping in convenience stores. Stored-value cards typically work only on closed or semi-closed electronic payment systems, and can be used only at specific outlets in a defined area. They may not have an expiry date and are reloadable.

About 1.1 million Macau Pass cards have been issued since 1999, Macau Pass SA deputy general manager David Lao says. He forecasts that the number of cards in use will increase by 14 percent this year MAY 2013

MAY 2013

Economy & Finance

Consumers usually use prepaid cards for big purchases. Prepaid cards may be disposable or reloadable, typically work on international payment systems such as the Visa or MasterCard systems, and can be used to buy anything anywhere in world. They have an expiry date. The prepaid cards available in Macau work only on the UnionPay payment system. Some stored-value and prepaid cards can store money in more than one currency, typically patacas and renminbi. ICBC Macau has been issuing disposable prepaid cards since last June. By the end of next month, it is planning to launch reloadable prepaid cards with radio-frequency identification technology for making contactless payments. ICBC Macau says it has issued over 11,000 prepaid cards – a sales figure that a spokesperson describes as “satisfactory”.

Lai see! Lai see! An ICBC prepaid card can store a minimum of MOP300 and a maximum of

The Monetary Authority says that by the end of last year, the number of stored-value and prepaid cards issued had grown by over 30 percent year-on-year, to about 1 million cards loaded with MOP58 million MOP8,000. Many are given as gifts instead of cash vouchers that can be used only in the outlet where they are bought. BNU offers disposable or reloadable prepaid cards. BNU declines to say how many it has issued. A BNU spokesperson says its prepaid cards are useful for travel abroad. They are accepted in 1.35 million outlets in at least two dozen countries, including Greater China, Japan, South Korea and Singapore.

Prepaid cards are more secure than cash, and if they are skimmed any loss is limited, because they do not give access to a bank account. Bank of China offers dual-currency prepaid cards. They can be loaded with up to MOP1,000 and up to RMB1,000 (US$162). Holders can use them at outlets that accept UnionPay Quick Pass contactless payments. A spokesperson for Bank of China says most of the transactions settled with its prepaid cards are small ones made in places such as supermarkets or restaurants. Its prepaid cards allow payments to be made quickly and securely, and spare the environment by reducing the amount of banknotes that have to be printed and distributed, the spokesperson says. Last year, the bank began issuing special prepaid cards to mark Lunar New Year. It markets them as the environmentfriendly alternative to lai see packets – red envelopes containing cash, which are traditionally given to single people and employees as a gifts and tokens of blessing each Lunar New Year.

Pass payments, but he says his company intends to connect more public car parks and food and drink outlets to its system this year. Macau Pass is also expanding its reach across the border. The company and Guangdong Lingnan Pass Co have just launched a stored-valued card that can be used in Macau and on public transport in 17 cities in Guangdong. The new card is loaded with patacas for use in Macau and with renminbi for use in Guangdong. But it cannot tap its pataca load in the mainland if its renminbi load runs out, or vice-versa. “We expect there will be several thousand users,” Mr Lao says.

Talking cash

FIRST ON THE BUS B

us operator Transmac - Transportes Urbanos de Macau SARL introduced Macau’s first stored-value card, the Macau Pass card, in 1999. The Macau Pass payment system has since grown into the city’s most ubiquitous. About 1.1 million Macau Pass cards have been issued, Macau Pass SA deputy general manager David Lao says. He forecasts that the number of cards in use will increase by 14 percent this year. A Macau Pass card can store up to MOP1,000 (US$125) and can be used for more than just paying bus fares. “Macau Pass cards can also be used in car parks, self-service photocopying machines, supermarket chains, convenience stores, bookstores, bakeries, vending machines and cinemas. People can use them to pay their water bills, too,” Mr Lao says. Mr Lao declines to say how many outlets now accept Macau MAY 2013

Macau Pass is also working on allowing people to do away with its cards altogether and use their mobile phones as a substitute. This year, the company hopes to launch SIM cards that employ near-field communication technology to let people make payments just by holding their mobiles close to a Macau Pass terminal. The technology is mature and secure, Mr Lao says. He says Macau Pass is in talks with mobile telecommunications operators about launching SIM cards with this function. “We believe both Macau Pass and these providers are envisioning the great potential of mobile payment,” he says. The Macau Pass card was inspired by Hong Kong’s Octopus card, launched in 1997. The contactless card uses radio-frequency identification technology for making secure contactless payments. At first, holders could only use Macau Pass cards to pay fares on Transmac buses. In 2006 the government gave permission to turn the Macau Pass system into a universal payment system. Since 2008, holders have been able to use Macau Pass cards to pay fares on all buses, and to pay for a gradually expanding range of other purchases. Macau Pass has yet to announce its results for last year. In 2011 it made a profit of MOP139,000, having made a profit of MOP1.93 million the year before. The company’s annual report for 2011 says the drop was due to its investment in expansion.

Statistical Digest Year-on-year change (%)

2012 GDP at current prices

MOP 348.2 billion

GDP in chained prices

MOP 304.0 billion

GDP per capita at current prices

MOP 611,930

GDP per capita in chained prices

MOP 534,141

Employment Oct - Dec 2012

18.0 9.9 13.9 6.1

1.9%

Median monthly employment earnings

MOP 12,000

Employed population Labour force participation

350,000 72.4%

11.1 4.0 percentage -0.8 points

Non-resident workers (end-balance)

110,552

17.6

Unemployment rate

Money and prices 2012-end Domestic loans to private sector MOP 190.0 billion Resident deposits

MOP 366.8 billion

Foreign exchange reserves

MOP 132.5 billion

Inflation rate (full year 2012)

MOP 98.1 billion MOP 83.5 billion

---

Year-on-year change (%)

-0.3 percentage points

6.1%

External merchandise trade 2012

352,000 71.9% 114,716

16.3

Latest MOP 198.3 billion

Year-on-year change (%)

MOP 72.8 billion

Utility consumption 2012 Water Electricity Gasoline Liquefied Petroleum Gas Natural Gas

75.3 million m3 4,205 million kWh 87.1 million L 43,615 tons -- million m3

Year-on-year change (%)

Latest

24.5 16.7 -15.7 Year-on-year change (%)

MOP 28.2 billion

16.5 12.5 4.4 19.7

Latest

Year-on-year change (%)

MOP 34.5 billion MOP 29.5 billion MOP 6.4 billion

12.3 million m3 5.5 567 million kWh 6.1 13.8 million L 3.5 8,329 tons -2.7 ---

6.7 9.0 6.6 1.5 -100

Notes

Year-on-year change (%)

MOP 13.0 billion - MOP 11.4 billion

Year-on-year change (%)

Mar 2013

Latest MOP 1.6 billion

14.9 13.7 15.8 14.1

Jan-Mar 2013

5.0%

MOP 132.6 billion

Year-on-year change (%)

Jan-Mar 2013

22.7 25.9 4.7 percentage -1.3 points

MOP 382.5 billion

2012

Balance

Notes

Jan-Mar 2013

MOP 70.9 billion - MOP 62.8 billion

MOP 56.7 billion

9.1 3.5 percentage -1.0 point

17.5 25.8 -percentage 0.3 points

- Direct tax revenue from gaming MOP 107.0 billion

MOP 12,000

Imports

Total expenditure

Q4 2012

Jan-Mar 2013

Year-on-year change (%)

MOP 129.5 billion

Q4 2012

1.9%

17.1 13.9 --

Total revenue

16.5 8.5 ---

-0.1 percentage point

MOP 8.2 billion

Public accounts

Notes

Year-on-year change (%)

Latest

Exports Trade balance

Year-on-year change (%)

Latest

Feb 2013 Feb 2013 Feb 2013 Mar 2013

Notes Jan-Feb 2013 Jan-Feb 2013 Jan-Feb 2013

Notes Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013

Notes Jan-Feb 2013 Jan-Feb 2013 Jan-Feb 2013 Jan-Feb 2013 Jan-Feb 2013

Transport and communications 2012-end Licensed vehicles - Automobiles - Motorcycles Mobile telephone users Internet services subscribers

217,335 101,712 115,623 1,613,457 231,582

Year-on-year change (%)

5.3 6.9 4.0 19.2 10.7

Latest

218,960 103,106 115,854 1,553,436 234,531

Year-on-year change (%)

5.5 7.5 3.7 11.4 10.6

MAY 2013

Notes Feb 2013 Feb 2013 Feb 2013 Feb 2013 Feb 2013

Source: Statistics and Census Service and Financial Services Bureau

Economic output

Economic Trends by JosĂŠ I. Duarte Counting heads

GRAPH 1 - Population growth Total

Men

Women

600,000 550,000

Number of people

500,000

While the liberalisation of the gaming market was the trigger for the economic boom after 2004, it is unlikely that such growth could have been achieved without the population changes that took place at the same time. GRAPH 1

From the beginning of 2004 to end of last year, the population grew at an average annual rate of 3 percent, an increase of more than 130,000 people or almost 30 percent. If this rate of growth were to be sustained, in about 23 years the population would be double what it was in end-2003, and in less than 28 years it would reach 1 million.

450,000 400,000 350,000 300,000 250,000

GRAPH 2

200,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2004

2005

2006

2007

2008

2009

2010

2011

2012

GRAPH 2 - Non-resident workers

140,000 120,000

Number of workers

100,000

GRAPH 3

80,000

As the population increases, it grows older. This graph compares the proportions of the population in each age group in 2004 with last year. The proportion of the population under 25 years of age decreased by eight percentage points in eight years. Conversely, the proportion aged 55 or over increased by over five percentage points.

60,000 40,000 20,000 0 2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

GRAPH 3 - Estimated population by age group 2004

25%

20% Percentage of total population

The population varies significantly with the number of non-resident workers. The number of non-resident workers fell in 2008 and 2009. The international financial crisis, combined with changes in the labour policy, reduced their number drastically. Macau had less than 25,000 nonresident workers in January 2004. The number rose steadily until September 2008, when it reached more than 104,000 people. Then it fell for almost two years, dropping to about 72,000 workers in May 2010. The number of non-resident workers has increased quickly since then, reaching about 115,000 people in March this year â&#x20AC;&#x201C; a record.

15%

10%

0% Under 15 years

Between Between Between Between Between 15 and 24 years 25 and 34 years 35 and 44 years 45 and 54 years 55 and 64 years

MAY 2013

Over 64 years

2012

Jobs for the girls

GRAPH 4 - People employed Total

Men

Women

350,000

300,000

Change the population and the workforce changes. The proportion of the population that is of working age, the number of non-resident workers and the population itself are growing. It is not surprising that the number of people employed is also increasing.

Number of people

GRAPH 4

The number of people in employment rose steeply from 2004 to 2008, by just under 45 percent, taking the employed population to 317,000 people. In that period a net 100,000 jobs were created. The size of the employed population fell slightly before levelling off in 2009 and 2010. It is now more than 350,000 people.

250,000

200,000

150,000

GRAPH 5

100,000 2005

2005

2006

2007

2008

2009

2010

2011

2012

GRAPH 5 - Labour participation rates Total

Men

Women

80% 75% 70%

Much of the rise in the number of people in employment is due to increases in the labour force participation rates for men and women, or the percentage of men and women of working age who have a job, or donâ&#x20AC;&#x2122;t have a job but want one. Notably, the labour force participation rate for women rose by about 12 percentage points between 2004 and last year. The workforce participation rate for both sexes rose considerably from 2004 to 2009, and has been relatively stable since. The ageing of the population may have been putting downward pressure on participation rates. GRAPH 6

The number of people employed by the cityâ&#x20AC;&#x2122;s leading industries grew significantly between 2004 and last year. Unsurprisingly, the greatest growth was in the size of the gaming industryâ&#x20AC;&#x2122;s workforce, followed by the hotel and restaurant industry. Combined, hotels and restaurants, gaming and trading enterprises employed half of the population at the end of last year.

65% 60% 55% 50% 2005

2005

2006

2007

2008

2009

2010

2011

2012

GRAPH 6 - Major employers 2004

2005

2006

2007

2008

2009

2010

2011

2012

90,000 80,000 70,000 Number of workers

60,000 50,000 40,000 30,000 20,000 10,000 0 Gaming

Hotels and restaurants

Trade

Construction

Government

Real estate and business

MAY 2013

Politics

Money politics Spending limits on campaigning for seats in the legislature are higher in Macau than in Hong Kong BY ALEXANDRA LAGES AND MANDY KUOK

hat price can you put on a seat in the Legislative Assembly? A seat gives prestige, privileged connections and the opportunity to influence the governance of the city. It costs would-be politicians up to MOP5.6 million (US$700,000), the limit on campaign spending by each ticket of candidates for the Legislative Assembly in this September’s elections. The 2013 limit is MOP3.3 million lower than for the 2009 elections. It applies to campaigns for directly elected and indirectly elected seats alike. Candidates and observers praise the lowering of the limit but urge the government to go further to prevent veiled forms of election cheating.

MAY 2013

Candidates for the Legislative Assembly must register by early July. The campaign period lasts 14 days, from August 31 to September 13. The elections are on September 15. Eilo Yu Wing Yat, politics specialist at the University of Macau, says the new limit means each ticket running for directly elected seats can spend an average of MOP20 for each of the 277,000 registered voters. Mr Yu says the limit is proportionately higher than the cap on campaign spending by candidates for Hong Kong’s Legislative Council. In Hong Kong, the cap ranged from HK$1.6 million (US$206,000) to HK$2.6 million in last year’s elections, depending on the size of the constitu-

ency a candidate was contesting. The smallest constituency was Kowloon West, with fewer than 440,000 registered voters, and the biggest was New Territories West, with nearly 990,000. The cap on campaign spending by candidates for seats representing the entire city, who vie for the votes of all 3.2 million voters, was HK$6 million.

Cash advantage In Macau, the chief executive sets the limit on campaign spending. Chief Executive Fernando Chui Sai On said he had based this year’s limit on what candidates in the 2009 elections had actually spent, and that he had set it in the light of public opinion.

35 In 2009 the limit was MOP8.9 million. No ticket came close to spending that much, according to data from the Electoral Affairs Committee. The ticket headed by SJM Holdings Ltd executive director Angela Leong On Kei was the biggest spender, splashing out MOP4.8 million in its campaign for direct elected seats. Only Ms Leong won a seat. The Macau head of the charity Caritas, Paul Pun Chi Meng, was the candidate for a directly elected seat that spent the least. He spent about MOP42,000 and failed to win a seat. Only one ticket per functional constituency ran for the indirectly elected seats. Each ticket spent between MOP15,000 and MOP189,000. This year’s limit could have been higher. The law says the chief executive must set the limit below 0.02 percent of the government’s estimate of its revenue in the election year. This means the limit this year could legally be as much as MOP23 million. Mr Yu says the ceiling of 0.02 percent of the government’s estimated revenue is out of date. He says the growth of the gaming industry and the amount

of tax the industry pays, means government revenue has reached new heights, so the chief executive could legally allow tickets to spend huge amounts on their campaigns. A high limit gives wealthy candidates a great advantage, he says.

Stinginess pays

Eilo Yu Wing Yat, politics specialist at the University of Macau, says the new limit means each ticket running for directly elected seats can spend an average of MOP20 for each of the 277,000 registered voters

Mr Yu says Mr Chui should elaborate on how he came up with the figure of MOP5.6 million. He is worried that the limit may be too high, allowing for veiled forms of vote-buying. In past elections, well-funded candidates reportedly gave voters free meals and transport, but the authorities failed to hold them accountable. Mr Yu says a lower limit would curb such behaviour. “At least, candidates would be more careful,” he says. “Controlling the spending limit would not eliminate cheating, but the government would show they are paying attention to it.” Last year’s political reforms added two directly elected seats to the Legislative Assembly and two indirectly elected seats. This year the voters at large will

MAY 2013

Politics

directly elect 14 members, and representatives of associations will indirectly elect 12. The chief executive, as before, will appoint seven. All the directly elected members who have announced they will seek reelection seem to agree with the lowering of the limit on campaign spending. But some say the government should do more to prevent vote-buying. Assembly member Kwan Tsui Hang, who represents the Macau Federation of Trade Unions, headed the ticket that had the most votes in 2009. Ms Kwan’s ticket got over 21,000 votes and won two seats. “A lower limit is fairer for everybody. For me there is no problem that the government has lowered the spending limit. Actually, I’m planning to spend

In 2009 the limit was MOP8.9 million. No ticket came close to spending that much. The ticket headed by Angela Leong On Kei was the biggest spender, splashing out MOP4.8 million in its campaign

Angela Leong On Kei campaigning in 2009

Chan Meng Kam greets supports during the 2009 campaign

MAY 2013

even less this year,” she says. Her ticket spent MOP1.3 million in its campaign in 2009. Another assembly member, businessman Mak Soi Kun, spent more than MOP4 million on his campaign in 2009. Mr Mak also agrees with the lowering of the limit. “In 2009, the limit was MOP8.9 million and nobody spent that amount. Spending less was enough for me,” he says.

Tough for some Mr Mak says the government should do more to prevent electoral fraud. “Since the handover, we already have enough experience to check and change things,” he says. The head of the Electoral Affairs Committee, Ip Son Sang, has said that vote-buying and other infractions will not be tolerated this year. But the authorities admit that the age of smartphones makes it harder to stop cheating. The head of the Commission Against Corruption, Vasco Fong Man Chong, has said the use of instant messaging and social media for campaigning is beyond the reach of the law. Assembly member Ho Ion Sang, who represents the General Union of Neighbourhood Associations, is seeking re-election. Mr Ho’s ticket spent MOP1.5 million in 2009 and won one seat. He says the limit on campaign spending is not an important weapon in the fight against election cheating. “It’s more important to educate voters. The government should work more on election education,” he says. In 2009 the Commission Against Corruption uncovered at least one case of election cheating, in which votes were allegedly bought for between MOP500 and MOP700. In the 2005 elections, votes were allegedly bought for between MOP300 and MOP500. In at least four cases in 2005, allegations of vote-buying led to prosecutions. In one case the votes alleged to have been bought were for Ms Leong’s ticket. In the other three cases the votes alleged to have been bought were for businessman Chan Meng Kam’s ticket. A court convicted the third candidate on the ticket, Wu Lin, and sent him to prison for four years. Mr Chan was re-elected to the assembly in 2009 and will run for a third term this year. He is now a member of the Executive Council, which advises the chief executive.

37 KEITH MORRISON AUTHOR AND EDUCATIONIST - kmorrison.iium@gmail.com

Many questions, one answer DO NOT COUNT ON THIS YEAR’S LEGISLATIVE ASSEMBLY ELECTIONS TO CHANGE ANYTHING FOR THE BETTER s September’s Legislative Assembly elections draw near, my hopes for change are high but my expectations are low. Here are a few down-to-earth questions that candidates must find answers to, if improvements are to be made to the way Macau is run.

GOVERNMENT REVENUE AND TAX REVENUE FROM GAMING

Why is it that Macau so easily tolerates an indolent government which had fiscal surpluses of MOP23.8 billion (US$3.0 billion) in 2009, MOP41.9 billion in 2010, MOP63.7 billion in 2011 and MOP72.8 billion last year? Why is it that nobody, it seems, has been fired for the monstrous overspending of public money on the University of Macau’s new campus on Hengqin Island? Why does the University of Macau’s Hengqin campus look like Robben Island prison, surrounded by water, with no easy escape? Why, when Macau is bursting at the seams, does its government seem so keen to bring as many tourists as possible to the few remaining quiet areas of the city? How can a government that says it cares for those it governs, allow tourism to develop in a way that is harmful to society, and fail to protect people from the negative effects of millions of tourists crowding into this tiny enclave? Why is it that the government’s coffers are brimming with money and yet the city’s health service is so hopeless? Why is public space planned so unintelligently? Why are government social services so weak, and handled in such large part by private organisations that are starved of cash, despite government handouts? Why does it take so long to pass laws? For that matter, why does it take the government so long to do anything at all? Use the forceps, instead of letting the baby take its own sweet time. What is holding up the economic diversification that has been trumpeted for so long as the way for Macau to develop? The graph here shows a barely changing relationship between government revenue and the tax revenue from gaming over the past three years, nicely indicating the lack of diversification.

30 MOP billion

Government

40 35

25 20 15 Government revenue

Tax revenue from gaming

10 5

2010 Q1

2010 Q2

2010 Q3

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

2012 Q1

2012 Q2

2012 Q3

2012 Q4

Source: Statistics and Census Service

without so much as a glance behind them, and drive at lethal speeds? Why do police not take immediate action at the airport and ferry terminals when taxi drivers refuse to take passengers? Why does it take so long for complaints against taxi drivers to be heard? Why do taxi drivers have the cheek to expect people to take them seriously when they complain that their fares are too low and that they are doing their best to give decent service? They are as close to giving decent service as Neptune is to the sun. Why are casino coaches and limousines allowed to force everyone, by their scarily aggressive driving, to clear out of their way?

Leadership

Why is it that nearly everywhere you go in Macau, it is being dug up? Why has Senado Square become, in effect, a no-go area for Macau people, as it is always crammed with tourists? Why is the city so acquiescent in the face of vast fortunes leaving for elsewhere because the gaming companies own them? Why are young people unable to afford decent flats?

Why is so little being done to train senior government officers to manage and lead? Why do so many government officers run their departments like private fiefdoms, making their colleagues serfs, totally obedient to and fearful of their master? Why is it that the way they manage makes feudalism look like a fancy beyond the imagination of even the most ardent futurist or reformer, makes Genghis Khan look like a shining example of a people-person, and makes a public hanging look like a vicarage tea party? Why is it that management meetings become a display of power and the verbal equivalent of indecent assault? How many subordinates have been kicked out because they did not lick their boss’s shoes? How much added value do bosses give their subordinates? Why are appraisals and promotions so often nothing more than measures of how much the boss likes the subordinate, or how much the subordinate kowtows to the boss?

Transport

Unlikely answers

Lifestyle

Why is it that it is just about impossible to find a seat on a bus on some routes? Why do taxi drivers think that the rules of the road do not apply to them, and that they can flout them with impunity and drive without care or consideration? Why do they think it is their right to tailgate you, to sound their horns when you stop at a road junction, to cut corners and to cut across lanes in front of you? What right do they have to go unpunished when they stop at will in no-stopping areas when police are present, pull out

Negligence seems to me to be the common answer to most of these questions: negligence in behaviour, decision-making, leadership, management, dealing with pressing concerns and in dealing with people. In an era when Macau seeks to go global, it cannot afford such negligence. The price is too high to neglect. What will the candidates for election have to say about these matters, apart from giving us the usual vacuous platitudes? MAY 2013

Greater China

Expansion efforts Hong Kong is increasing places at international schools to meet demand and keep businesses happy BY MARY ANN BENITEZ* IN HONG KONG

ong Kong’s diminishing reputation as an international city will be improved by an announcement that more school places will be made available for expatriate children. The government announced last month that about 1,700 places would be created by turning three vacant school facilities into international classrooms. Hong Kong has long experienced a shortfall in places for students studying in a language other than Chinese. A survey commissioned by the government and released last month warned that the city will lack 4,200 places at international schools by 2016. An influx of American and European families seeking jobs, and a surge in Hong Kong and mainland students enrolling at the city’s privileged international schools has intensified competition for places. Just last month, Legislative Council member Ip Kin-yuen, who represents the education sector, told the government to review admissions policies at international schools to help meet

MAY 2013

demand from expatriate families. Speaking to public broadcaster RTHK, Mr Ip said the proportion of Chinese-speaking students could be reduced to make room for expatriate students. There were about 49,200 places available at international schools in the 2011-2012 academic year. More than 50 international schools offer classes from countries including the United States, Australia, Britain, Canada, France, Germany, Japan, South Korea and Singapore.

Quid pro quo The government’s measures to increase school places include the allocation of vacant premises and greenfield sites, interest-free loans for infrastructure and heavily reduced rent to schools leasing government land or premises. In return, schools are required to dedicate at least half of their capacity to expatriate students. The goal is to help alleviate the mismatch between supply and demand for places, particularly in lower grades at primary school.

A survey released last month warned that the city will lack 4,200 places at international schools by 2016 The government-commissioned study found there would be extra places for 2,177 primary-level students and 4,078 places for high schoolers by 2016-2017, once international schools complete their expansion and redevelopment plans. That takes the total on offer to 28,445 primary and 26,993 secondary places. Even that increase will fail to meet demand based on projections of expat growth over the next five years. Add to that Hong Kong parents who want to educate their children outside the local system and currently unmet demand, and at least 32,648 primary school places and 24,554 secondary-level places will be needed inside five years, the study says. By 2016-2017, there will be a shortfall of 4,203 places in primary schools. Underlying the squeeze for places is demand by native Hong Kongers to send their children to an international school. The proportion of primary school students without a foreign passport at international schools grew from 11.6 percent in 2001 to 25.6 percent in 2011. At the secondary level, it has increased from 10.7 percent to 22.8 percent in the same period. In the decade between the school year beginning in 2001 and 2011, the number of primary school students on a waiting list for an international school rose from about 2,100 to more than 3,900 pupils. The waiting list for high schools grew from 200 to 450 in the same period.

Mix and match Hong Kong has long been aware that the supply of places at international schools is inadequate. Members of the city’s Legislative Council have said if the shortfall is not addressed, the city’s status as an international financial centre could be damaged. The study estimates that by 2016, there will be an increase of 12.9 percent in the number of expatriate workers in Hong Kong. One in five businesses that planned to increase their headcounts said the availability of international school places was important or very important in their considerations to expand in Hong Kong or relocate elsewhere. International schools are particularly in short supply in the New Territories. Just 31.6 percent of international school students live on Hong Kong Island, but it has more than half of all places. The Hong Kong Education Bureau says the government will continue to support the expansion plans of international schools. But it notes “the international school sector is extremely heterogeneous: some schools are much-sought after while others are under enrolled”. “We note that most international schools have yet to fill up the class to the size they propose and have spare capacity to accept more students,” the bureau said. Meanwhile, the American Chamber of Commerce wants the government to allow international schools to admit more native Cantonese speakers to create a “good mix”. * ASSISTANT NEWS EDITOR AT THE STANDARD IN HONG KONG MAY 2013

Greater China

Worrying gap Tibet disaster shows mainland’s resource divide BY KELLY OLSEN*

landslide that crashed down a Tibetan mountain in late March, entombing scores of mine workers, serves as a parable on the mainland’s resources boom and its failure to benefit ethnic minorities, analysts say. The 83 workers killed in the disaster were almost all members of China’s Han ethnic majority and from across the country, illustrating how minorities rarely see any of the fruits of underground wealth – not even dangerous jobs. The mainland has enjoyed decades of stunning economic growth but critics

MAY 2013

say much mineral development, often in poor minority regions, has been reckless and inefficient, coming with a high environmental and cultural cost. Some 91 percent of China’s 1.35 billion people are classified as ethnic Han, with the rest scattered among 55 other ethnic groups, including Uighurs, Manchus, Mongols, Koreans and Kazakhs as well as Tibetans. Areas with significant minority populations such as Xinjiang, Tibet and Inner Mongolia hold resources including oil, gas, copper, iron ore, coal and so-called rare earths – key com-

ponents in high-tech products such as smartphones. The March disaster struck when a vast quantity of rock tumbled onto a workers’ camp at a copper mine 4,600 metres above sea level east of Lhasa, the capital of the Tibet Autonomous Region. Most of the buried labourers were migrants who had ventured to the high altitude of the Tibetan plateau to work in an accident-prone sector of the economy. The mine is run by a subsidiary of the state-owned China National Gold

41 flare, sometimes bloodily. Riots turned deadly in Tibet in 2008 and Xinjiang in 2009. Hundreds protested in Inner Mongolia when a Han truck driver ran over and killed a herdsman in 2011. Carl Soderbergh, of London-based Minority Rights Group International, says China’s smaller ethnic groups are paying a heavy environmental price for development. “Minority herders are being forced off of traditional grazing lands while also seeing that their water sources are being polluted,” he says. In much of the world, he adds, “very many, if not most, minorities and indigenous peoples are marginalised and kept out of decisionmaking processes”. Shanghai-based independent economist Andy Xie says that most resource development in the hinterlands, aside from coal, is misguided given the prohibitive expense, danger and environmental damage. “If you completely [leave it] to market forces, I’m not sure a lot of mines would be opened up,” he says, adding imports are often cheaper.

Policy flaws

The 83 workers killed were almost all members of China’s Han ethnic majority and from across the country, illustrating how minorities rarely see any of the fruits of underground wealth – not even dangerous jobs

Group Corp, the country’s largest gold producer, according to official media. “There are long-standing issues of Han immigration and inequality that are much broader than simply mineral extraction,” says Geoffrey Crothall, spokesman for Hong Kong-based China Labour Bulletin, which promotes worker rights. “When new economic opportunities open in these ethnic minority regions, it’s usually Han workers who come in and do the work rather than locally employed workers.” Such movements have seen tensions

The mainland’s ruling Communist Party officially promotes ethnic solidarity and hails the benefits of market reform policies started in the late 1970s, which unleashed an economic boom that lifted hundreds of millions out of poverty. More than 110 ethnic Tibetans have set themselves on fire in recent years in protest against Beijing rule. The central government rejects criticism of its control, saying Tibetans enjoy religious freedom and higher standards of living brought about by investment. “The main concerns of Tibetans are about the quality of their environment and the health of their animals and land, rather than about the money,” says Robert Barnett, director of the Modern Tibet Studies Program at Columbia University. “These concerns are often expressed in terms of the sacredness of mountains and the importance of respecting natural forces.” After the March landslide, Tsering Woeser, a Tibetan writer living in Beijing, quoted a folk belief on her blog that the region’s underground assets belong to a traditional demon figure. “It is said that mines are Rasetsu’s property, and if exploitation irritates him there will be droughts, landslides, earthquakes, epidemics, famines and * AFP NEWS AGENCY warfare,” she wrote. MAY 2013

42 MINXIN PEI PROFESSOR OF GOVERNMENT AT CLAREMONT MCKENNA COLLEGE

China’s dream world XI JINPING’S ‘CHINA DREAM’ – AMBITIOUS ROADMAP OR EMPTY SLOGAN?

uling elites almost everywhere – whether in democracies or in authoritarian regimes – believe that clever sloganeering can inspire their people and legitimise their power. There are, of course, crucial differences. In functioning democracies, government leaders can be held accountable for their promises: the press can scrutinise their policies, opposition parties are motivated to show that the party in power lies and cheats. As a result, incumbents are frequently forced to carry out at least some of their promises. Autocratic rulers, by contrast, face no such pressures. Press censorship, repression of dissent and the absence of organised opposition allow rulers the luxury of promising whatever they want, with no political consequences for failing to deliver. The result is government of the sloganeers, by the sloganeers and for the sloganeers. China appears to have perfected this form of government over the last decade. The ruling Chinese Communist Party, in response to rising public demand for social justice, has devised numerous slogans, such as “governing for the people”, “building a harmonious society”, “balanced development”, “scientific development” and so on. Whenever the top leadership in Beijing uttered such slogans, they became the rallying cry of the bureaucracy. The party’s massive propaganda machine went into overdrive and blanketed the country with a publicity blitz that would make the most extravagant Madison Avenue advertising campaign look like child’s play.

The great renaissance But government by slogan, whether in China or in other autocracies, seldom achieves its declared goals. In the last decade, gross domestic product growth soared, but most indices of social justice, governance performance and public welfare deteriorated. Macroeconomic imbalances worsened as economic growth became excessively dependent on investment and exports. Inequality worsened. Official corruption escalated. Social mobility declined. Environmental degradation reached a crisis point. Today, it is the responsibility of China’s new leadership, headed by President Xi Jinping, to avert another decade of missed opportunities. Without missing a beat, Mr Xi, like his predecessors, rolled out a new slogan to inspire popular confidence in his leadership. As a catchphrase for his administration’s objective, “the great renaissance of the Chinese nation” is a bit long, but it has lately morphed into the simpler “China Dream”. The substance of the China Dream remains difficult to determine. When Mr Xi first unveiled his slogan after being selected as the Chinese Communist Party’s new general secretary, he defined it in simple, accessible but nonetheless generic terms: The “Chinese people dream of living the same good life as all other people in the world.” Mr Xi has said little about the China Dream since – and his silence has caused considerable trouble. China’s ever-zealous MAY 2013

propaganda officials, evidently fearful of not demonstrating sufficient loyalty and respect for the new party chief, quickly hijacked the slogan; the China Dream has replaced the “China Model” in official political branding. Whatever the new administration does is touted as part of its ambitious effort to make the “China Dream” come true.

Real challenge Unfortunately, China propagandists, who double as censors, have a perverse ability to discredit anything that they try to brand. The China Dream is no exception. So far, public reaction has ranged from puzzlement to derision. After a decade of government by slogan, the Chinese public wants substance. This presents Mr Xi with a real challenge. He has risen to the top by winning friends and allies inside the Chinese Communist Party. Now that he is the leader of a dynamic, diverse and increasingly demanding society, he must gain popular support and confidence to maintain his credibility and become an effective politician. The first thing that Mr Xi should do is to articulate a clearer, more specific and inspiring version of the China Dream, and stop letting the Chinese Communist Party’s propaganda officials define it for him. The China Dream may include all of the economic benefits and material comfort that ordinary Chinese desire, but it will not be complete without the human rights and dignity that citizens in civilised societies take for granted. The second thing that Mr Xi and his colleagues need to do is to follow up with specific policies and actions that can bolster the credibility of their declared goals. Political slogans, however high-sounding, become stale when their purveyors fail to make good on their promises. Mr Xi may still be enjoying a honeymoon with the Chinese public, but it is likely to be a short one. His predecessors had 10 years to carry out real reforms and accomplished little, leaving the Chinese in no mood to endure another decade of government by shibboleth.

MAY 2013

Society

book page has more than 500 “likes” but the group itself only has about 40 core members.

Survey findings

Striding out The lesbian, gay, bisexual and transgender community take their demands for equality into the mainstream BY LUCIANA LEITÃO

acau’s lesbian, gay, bisexual and transgender (LGBT) community is finding its voice after years of silence. Community leaders have become more vocal in defence of their interests in the wake of debate on the bill on domestic violence. After a round of public consultation in 2011, the government announced last November that the bill would not cover abuse in same-sex couples. The government said the exclusion was made because a “social consensus” was lacking and the law did not recognise same-sex unions. Macau’s lesbian, gay, bisexual and transgender residents mobilised, and the most vocal formed the LGBT Rights Concern Group to fight discrimination based on sexual orientation and gender identity. Last month the group established the Rainbow of Macau association.

LGBT Rights Concern Group cofounder Jason Chao Teng Hei says its members are pressing for greater tolerance. Mr Chao says members of the lesbian, gay, bisexual and transgender community are afraid. “You still don’t see LGBT couples holding hands in the street,” he says. “We want society to understand the LGBT community and that they can be included in society.” Since the group’s formation, talks have been given and seminars held at universities. “An atmosphere of dialogue has been created,” Mr Chao says. The group held Macau’s first Rainbow Parade in December. Mr Chao says many in the lesbian, gay, bisexual and transgender community are hesitant to fight for their rights. People have contacted the group but few have joined. The group’s Face-

The group released a survey earlier this year of about 200 LGBT residents. About 76 percent of the respondents said they were homosexual, 16 percent identify as bisexual and 2 percent said they were transgender. About 84 percent said they usually hid their sexual orientation, most because they feared their families would spurn them. Only 13 percent had told their parents about their sexual orientation. In much of the West, and in some Southeast Asian countries, specialist businesses cater to the “pink dollar”. Here it is a largely untapped market. A bar for LGBT people opened in the Nam Van Lake area in 2009 but did not last long. Smaller, private events are more common. A lecturer in gender studies at the Macau Polytechnic Institute, Cecilia Ho Wing Yin, says lesbian, gay, bisexual and transgender people are discriminated against in several ways. Ms Ho says there is little in the way of official statistics about the community, and while some public bodies may have some limited data about sexual orientation, the data is not reliable. The only official data that counts LGBT people separately from any other kind of people are the statistics on HIV and AIDS. These show that 33 new cases of HIV infection were reported last year. The virus was transmitted through homosexual contact in four cases. In three cases it was transmitted through bisexual contact, but in most cases it was transmitted through heterosexual contacts, according to the Health Bureau.

Equality alliance The leader of Rainbow of Macau, Anthony Lam Ka Long, says information about lesbian, gay, bisexual or transgender people is important, but hard to collect. “It’s not easy for the Statistics and Census Service to step into someone’s house and ask if they are straight,” he says. Ms Ho says it is time for the government to pay more attention to the LGBT community. “We need to push a lot of different government departments to review their policies, to better protect people with different sexual orientations,” she says. MAY 2013

Society

LIONS OF GAY PRIDE I n any conservative society, same-sex relations are still taboo for the older generations. It is the same in Macau. Some young adults are coming out and publicly declaring their sexual orientation. The most prominent among them is Jason Chao Teng Hei. Mr Chao has been promoting the rights of lesbian, gay, bisexual and transgender (LGBT) people since last year. He came out in January, at a public event. He has yet to discuss the matter with his parents. “They knew from the news. I didn’t tell them directly,” Mr Chao says. He says his father is in denial, telling people he is “happily married and living with a girl”. Mr Chao leads the New Macau Association, which holds three directly elected seats in the Legislative Assembly. He will again run for a seat of his own in this year’s elections, having failed to win one in 2009. The New Macau Association has no official position on the rights of LGBT people, but there was veiled tension in the group after Mr Chao came out. The association has a strong Christian-democrat ethos. Two of its representatives in the assembly, Paul Chan Wai Chi and Ng Kuok Cheong, are Catholic. When assembly member José Pereira Coutinho introduced a bill to recognise same-sex unions in March, Mr Chan and Mr Ng abstained in the vote that killed the bill. The association’s other representative in the assembly, Au Kam San, was absent. Another campaigner for the rights of sexual minorities is Tracy Choi. Her documentary “I’m here”, which depicts the problems faced by homosexuals, won the Macau Indies MAY 2013

Jury’s Award at last year’s Macau International Film and Video Festival. One of the main figures in the documentary is Ms Choi herself.

Older thinking

Ms Choi’s family and friends knew about her sexual orientation before the documentary came out, so the film was no life-changer for her personally. “Just some more people I don’t really know are now aware I’m gay,” she says. When people realise she has a girlfriend, the situation often makes Ms Choi feel “a little bit uncomfortable”. But there is never a sense of discrimination, she says. Ms Choi stresses she has never experienced a problem stemming from her orientation. Ms Choi says society is changing. Young adults are more tolerant of LGBT people, but the intolerance of older generations remains entrenched. “They may not accept it so easily, so the pressure is not really about friends, but about family,” she says. Ms Choi says her mother was understanding when she learned of her sexual orientation. Her mother’s friends still have difficulty accepting it. “They just need some time,” she says. The leader of the Rainbow of Macau association, Anthony Lam Ka Long, says his first gay relationships, 10 years ago, led to the glare of other people’s attention whenever he and his partner held hands in public. Mr Lam subsequently discovered he was bisexual. All his friends know he is bisexual and most accept it, he says. Mr Lam has never discussed his sexual orientation with his parents, although he believes they are aware of it.

“We want society to understand the LGBT community, and that they can be included in society,” says LGBT Rights Concern Group co-founder Jason Chao Teng Hei She says the law discriminates against LGBT people. It does not recognise same-sex unions. This denies couples access to social benefits and makes futile any claim on the estate of a deceased partner by the surviving partner. In March, Legislative Assembly member José Pereira Coutinho introduced a bill that would have given same-sex unions legal recognition, but would have prohibited gay or lesbian couples from adopting children. The assembly rejected the bill, only Mr Coutinho voting in favour. One of the assembly members opposed to the bill was Lam Heong Sang, who represents the Federation of Trade

Unions. Mr Lam said giving same-sex unions legal recognition could lead to “human extinction”. Ms Ho acknowledges that the law prohibits discrimination in employment on the grounds of sexual orientation. She says she knows such discrimination occurs anyway, but that nobody has ever complained to the Labour Affairs Bureau about it.

Attitude problems “I don’t see anyone brave enough to make a complaint,” Ms Ho says. “They need to provide evidence.” But providing evidence can be difficult.

Another specialist in gender studies at the Macau Polytechnic Institute, Samson Kwan Chi Fai, does not believe the law will recognise same-sex unions any time soon. He says society is too conservative and disinclined to accept same-sex couples. Mr Kwan says prejudice against gay couples is greatest. “We live in a mainstream society and around the world anti-homosexual behaviour is more towards male-to-male relationships,” he says. Mr Lam of Rainbow of Macau says he believes these attitudes are changing. “People are now really talking about the LGBT community, and they have discovered that LGBT people really exist in Macau.” The liberalisation of the gaming market and the greater variety of people to be found here since then has helped change attitudes, he says. The LGBT Rights Concern Group is holding talks with the Social Welfare Bureau, the Health Bureau and the Education and Youth Affairs Bureau. The group is hoping the talks will lead to cooperation in countering discrimination on the grounds of sexual orientation.

MAY 2013

Photos: LuĂs Almoster

MAY 2013

Transport

acau airport has weathered a patch of turbulence that had its operator reaching for an oxygen mask. The airport’s throughput of passengers rose last year after falling for four years in a row. And this year the business outlook for the company that manages the airport, Macau International Airport Co Ltd (CAM), is for clear skies ahead. In the first quarter of this year the airport handled nearly 1.2 million passengers, 16.7 percent more than a year earlier. The airport company’s target for 2013 is passenger throughput of 4.7 million, 4.7 percent more than last year. “Some of the markets are picking up, like Thailand,” says Grace Cheang, senior assistant to the chairman of the company’s executive committee and director of the company’s finance and administration department. Ms Cheang says that so far the outbreak of H7N9 bird flu has not reduced the passenger figures by much. But travel agencies report that some tour groups going to Shanghai, the city most affected by the virus, have cancelled their bookings. The most passengers the airport handled in any one year was nearly 5.5 million, in 2007. The advent of scheduled direct flights across the Taiwan Strait in 2008 cut the number of passengers using the airport drastically. Direct flights meant air travellers between the mainland and Taiwan no longer had to use Macau or Hong Kong as a stopover point. Before the introduction of direct flights, about 40 percent of the passengers using the airport here were en route between the mainland and Taiwan. Direct flights across the Taiwan Strait began just as the global financial crisis dealt another blow to the airport’s business. By 2011 annual passenger throughput had plunged to 4.0 million.

Happy landings Fortunes at Macau airport appear to be improving with passenger numbers growing again BY EMANUEL GRAÇA

Breathe normally The turnaround began last year. CAM made a net profit of MOP66.89 million (US$8.36 million) last year, its first profit since the airport began operating in 1995. Its revenue rose to MOP769 million, 17 percent more than in 2011. The company forecasts that revenue will rise to MOP798 million this year. Ms Cheang says the company expects to post another profit, but she will not predict how much. CAM made a profit after getting an increase in capital, which was backed by the government – the controlling shareMAY 2013

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holder – and Sociedade de Turismo e Diversões de Macau SA. The increase allowed the company to pay back the money it had borrowed from banks to build the airport and get it running. This year, airlines began services from Macau to two new destinations in the mainland, Wenzhou and to Shenyang. “We would like to have more international routes,” says Ms Cheang. She mentions in particular services to Indonesia and India. The airport is having talks with low-cost airline SpiceJet about flights to India. Charter services to Cambodia are expected to start this year. Macau’s only airline, Air Macau, is often accused of concentrating too much on the mainland market. If more international services are required, the alternative to Air Macau is to attract more airlines based elsewhere to fly here. “We do welcome more airlines, regardless of whether they are based in Macau or overseas,” says Ms Cheang. She admits that competition from bigger airports nearby, like Hong Kong, makes life harder for Macau. Another problem is the airport is over-reliant on inbound passengers. The domestic market for outbound air travel is too small to be attractive to airlines.

Corporate jetsetters The airport is increasing the amount of business aviation it handles. It is building a new hangar, to be ready next year, which will be exclusively for private jets. Ms Cheang says the new hangar is a “strategic” asset. It will allow more companies to base jets here, and the air-

port to offer more maintenance services. The company expects the number of general aviation aircraft movements at the airport to grow by 8 percent this year to almost 1,800. An aircraft movement is a takeoff or landing. In the first quarter, general aviation aircraft movements rose by 14 percent. General aviation comprises all unscheduled civil air services. Three service sub-concessions are being revised, which all expire at the end of this year. CAM says the number of operators of each sort of service at the airport in the future will depend on market conditions. It will no longer sign contracts conferring exclusive rights in any field. Macau Business Aviation Centre Ltd handles general aviation services. Ms Cheang says the government has hired a consultant to work out the best operating model for the future. A study is in progress and a decision should be made by next month. Menzies Macau Airport Services Ltd does ground handling and aircraft maintenance, and runs air cargo and air mail services. Ms Cheang says CAM and Menzies Macau are in talks about a new contract, but that other companies are also interested in doing this kind of work. MCS-Macau Catering Services Co Ltd (Servair Macau) handles in-flight catering. It has little to worry about. Ms Cheang says its new contract is almost a done deal, as no other company has expressed an interest.

Holding pattern The airport is waiting for the government to approve a master plan for its

AIRPORT PASSENGERS 6,000,000

+853 2833 1258 info@goldfishmacau.com www.goldfishmacau.com

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

0 2005

2006

2007

2008

2009

2010

2011

2012

2013Q1

Source: Macau International Airport Co.Ltd

MAY 2013

Transport

development. The plan will lay out how the airport should look in five years, 10 years and 20 years from now, and provide for the expansion of the apron and terminal. The plan should have been ready in 2011. A spokesperson for the Civil Aviation Authority told Macau Business: “The Macau International Airport master plan is done and it is now pending presentation to the Executive Council.” The Executive Council advises the chief executive. With or without the master plan, CAM continues to invest in the air-

port. Last year it renovated the terminal building. It added new shops and food and drink outlets. “We are wrapping up all the projects inside,” says Ms Cheang. CAM expects to begin an express transport service between the airport and the Gongbei border crossing before the end of June, similar to the express service between the airport and Hengqin Island, which it began last year. The service will allow passengers coming from or going to the mainland, to bypass Macau passport control and customs. There are some clouds on the hori-

zon however. Cargo throughput continues to drop. Annual cargo throughput peaked at over 227,000 tonnes in 2005, but had dropped to 27,794 tonnes by last year. The airport expects to handle 28,200 tonnes this year. Ms Cheang says the drop is due in part to greater competition in the Pearl River Delta, which has five airports, including three in the mainland. Macau airport relies on the transhipment of air freight between the mainland and elsewhere, but shippers are making increasing use of the airports in Guangzhou and Shenzhen, she says.

MAY 2013

Transport

Barra station

The 2015 runs late Construction of the light rail network is over budget and likely to fall even further behind schedule BY ALEXANDRA LAGES

t is full steam ahead on construction of the Light Rail Transit (LRT) elevated railway in Cotai and Taipa, but on the peninsula no work has been done. It suggests another postponement of railway’s first train, which was scheduled for 2011. The government is concentrating on building the stretch that will serve Taipa and Cotai. A spokesperson for the Transportation Infrastructure Office, which is in charge of the project, says the first of the columns to support the railway were erected last month. “At this stage, our office’s priority is to ensure the Taipa construction work progresses steadily,” the spokesperson told Macau Business. The first phase of the railway consists of one line, some of it elevated and some underground. It will have 21 stations: 10 on the peninsula, and 11 in Taipa and Cotai. The network will connect the Border Gate with the Taipa ferry terminal, running through the business district and Cotai. Construction work on the peninsula is likely to be trickier because of the

MAY 2013

higher population density and the greater complexity of infrastructure. The government decided to concentrate on the Taipa-Cotai stretch after the Commission Against Corruption issued a report on the project last September. The commission agreed with residents who objected to the line running through the middle of the NAPE district and too close to their homes. The commission wants the line to follow the coast, to better meet safety and technical standards. Its report says the government failed to disclose either the criteria it used in choosing the original route, or the full technical data it used to support its choice.

Runaway budget In November, the head of the Office of the Secretary for Transport and Public Works, Francis Wong Chan Tong, said the government had re-studied the options, including the route suggested by the anti-corruption commission. The study looked into each possible route through or around NAPE, how much it would cost to lay the railway along each

route, how difficult it would be and how long it would take. The results have yet to be made public. In February, the head of the Transportation Infrastructure Office, Lei Chan Tong, told reporters that the government had yet to decide how to direct the railway through NAPE. The spokesperson for the Transportation Infrastructure Office says changing the route through NAPE would create problems for the entire railway. “Any adjustment will affect the connected sections and the overall performance of the system,” the spokesperson said. The office declined to say if more delays or budget overruns would be the end result. The railway is currently scheduled to start operating by 2015. But it is possible that trains will be running only on the Taipa-Cotai stretch by then. The project’s budget now exceeds MOP11 billion (US$1.38 billion), three times what it was originally forecast. The government says construction costs may rise again. Urban planner Francisco Vizeu Pinheiro says the entire length of the

line should be opened in one go. “This is infrastructure that was designed as a whole,” he says. “It’s important to integrate the layout and the operations of the LRT, including the needs of residents, the school population and tourists. It has to be integrated in a general scenario, and not by sections.”

Rush hour Mr Vizeu Pinheiro says trains running solely on the Taipa-Cotai stretch may go part of the way towards meeting some of the city’s needs. “Some people say the project may be gaming-and-touristoriented and, in that sense, the LRT can operate on Taipa-Cotai alone,” he says. The Taipa-Cotai section will have stations serving the Lotus Bridge border crossing, the airport, several of the casino resorts and the Taipa permanent ferry terminal, once it is complete. Mr Vizeu Pinheiro says the new ferry terminal will be able to handle more passengers than the Outer Harbour ferry terminal, which is currently Macau’s biggest. The Taipa permanent ferry terminal is

scheduled to open next year. Mr Vizeu Pinheiro says the government may have to reroute the stretch serving the peninsula to integrate it better with future transport arrangements. The route chosen in 2009, which the government still seems to prefer, does not accommodate the landing point of the Hong Kong-Zhuhai-Macau Bridge, the city’s 3.5-square km land reclamation programme or the new border crossing in the peninsula’s north. The rail network is designed to run for 19 hours a day. But the borders between Macau and the mainland may eventually be open around the clock, raising the prospect of another form of rush hour. “We can already see big growth in visitor numbers due to improvement of the infrastructure in the mainland. Currently the project is not ready to cope with this,” Mr Vizeu Pinheiro says. More lines are expected to be added to phase one of the network. The second phase, if approved, would extend the line to Coloane. A branch line may eventually connect Macau to Hengqin Island.

A RAILWAY’S TIMETABLE 2002 Chief Executive Edmund Ho Hau Wah proposes the Light Rail Transit elevated railway February 2003 The first study of the proposal begins July 2007 The government announces the route of the railway and a budget for the project of MOP4.2 billion (US$525 billion) October 2007 The government declares the project will go ahead October 2009 The budget increases to MOP7.5 billion, with the route changing and the number of stations falling to 21 from 23 June 2011 The budget increases to MOP11.1 billion February 2012 Construction begins on the Taipa-Cotai section of the railway

MAY 2013

Property

Sense of duty The government is averse to tinkering with the special stamp duty BY ALEXANDRA LAGES

ext month it will be two years since the government imposed the special stamp duty on sales of homes. The legislation governing the special stamp duty mandates a review of the duty if the state of the property market warrants one. The government has already decided to keep the duty as it is. A spokesperson for the Office of the Secretary for Transport and Public Works told Macau Business that the special stamp duty had had “some effect” on the stability of the housing market. “For now, there is no need to halt this measure,” the spokesperson said. The government imposed the special stamp duty on sales of residential property in June 2011. The duty is levied at a rate of 20 percent of the selling price if the owner of a home sells it within one year of buying it, or at a rate of 10 percent if the owner sells it between one and two years after buying it. Last October, the government also began levying the duty on sales of offices, commercial premises and parking spaces. The spokesperson for the Office of the Secretary for Transport and Public Works said: “The aim of the special stamp duty was to raise the costs of speculation and fight short-term real estate speculation.” But Chief Executive Fernando Chui Sai On conceded last month that although the number of properties sold had fallen, the prices paid for them had continued to rise. In the first four months of 2011 – just before the special stamp duty was announced – the average number of homes sold each month was over 1,960, data from the Financial Services Bureau

indicates. In the first quarter of this year the average number of homes sold each month was under 1,200. In April 2011 the average price of residential floor space was MOP50,512 (US$6,314) per square metre. In March this year it was MOP88,097, almost 75 percent more, and an all-time high.

Devil you know People in the real estate business say the special stamp duty has helped push prices up, by constricting the supply of homes reaching the market. The duty deters investors from putting their property on the market until two years are up. A specialist in real estate at the University of Macau, Rose Lai Neng, says it is better to keep the duty. “There seems to be evidence that the levy actually helped boost prices, because there is such huge demand,” Ms Lai says. “Having said that, since the market has already accepted the special stamp duty as a fait accompli, the withdrawal of the measure might create another wave of unnecessary speculation,” she says. By March this year, the duty had been levied on just 95 sales, and had contributed a grand total of MOP46 million to the public purse, official data shows. That is just 95 of the 24,600 sales of homes since June 2011. The managing director of Savills (Macau) Ltd, Franco Liu, says the sellers are likely to have made a profit on their investment despite the special stamp duty. The increase in the market value of the homes, even after so short an interval, should have exceeded the cost of paying the duty, Mr Liu says.

@ rate of 20 pct

@ rate of 10 pct

Jun 2011 to Dec 2011

Jan 2012 to Dec 2012

Jan 2013 to Mar 2013

Total

MAY 2013

SOURCE: MACAU GOVERNMENT

NUMBER OF SALES OF HOMES SUBJECT TO THE SPECIAL STAMP DUTY

By March this year, the duty had been levied on just 95 sales, and had contributed a grand total of MOP46 million to the public purse, official data shows. That is just 95 of the 24,600 sales of homes since June 2011 “Some owners may not have foreseen any further significant gain in the capital value of the properties on hand in the short term, and they may have preferred to change their investment portfolio. A few owners may also have had an urgent need for cash,” he says. Mr Liu says most owners keep their property for at least two years to avoid the special stamp duty. The duty is a “huge transaction cost”, he says.

Photo: Luís Almoster

Parked money Curbing housing prices is another matter altogether, and Mr Liu says the duty can do little to slow the rise. “The rapid economic growth, rising household income, high inflation rate, low unemployment rate, upcoming major infrastructure, shortage of new supply etcetera, have been supporting the continuous growth in price of both residential and commercial property,” he says. Ms Lai of the University of Macau detects a tendency among investors to buy small flats, for which there is high demand. She says prices of small flats are rising fast, meaning owners can sell them within two years of buying them and still make a profit, despite the special stamp duty. “The consequence is that buyers that are in need of small housing units have to pay more because of the duty,” she says. “The same logic goes for parking spaces. These two types of property in general involve less initial investment than offices and commercial buildings.” Mr Liu says the special stamp duty has had little effect on the market for shops and offices. Because they are bigger investments, most buyers hang on to them longer. By March, the special stamp duty had not even been levied on one sale of office or commercial property. It had been levied on just six sales of parking spaces, in each case at the rate of 20 percent, putting MOP1 million into the government’s coffers. The spokesperson for the Office of the Secretary for Transport and Public Works said the government would continue to monitor the real estate market. “If necessary, the government will take further action,” the spokesperson said. Mr Chui had been expected to announce new curbs on the property market last month, when he spoke to the Legislative Assembly. Instead, he asked people to “stay calm” and not rush into buying a home. MAY 2013

Property

Penha Hill

Above it all

A mainland developer invests in a low-density housing project on Penha Hill ne of Macau’s most coveted neighbourhoods, Penha Hill, is soon to have a new low-density housing complex. Hong Kong-listed mainland developer Tomson Group Ltd is leading the project, and the development is due to be ready by the middle of next year. The project’s principal agent, Jones Lang LaSalle, says Tomson intends to begin marketing less than half of the homes before the end of June. The sales campaign is aimed at potential buyers here, in Hong Kong, in the mainland and in Taiwan. “It is the first time in 20 years for our group to set foot in Macau,” the vicechairman of Tomson, Albert Tong, said in a written statement. “We have confidence in this project and hope it can become one of the focuses in Macau.” The development will comprise four towers, each between seven and 12 storeys high, together containing fewer than 100 homes. A typical home there will have about 3,000 square foot of floor space and three bedrooms. Details of the project, including the name of the complex, are to be announced this month.

MAY 2013

A “niche product, very different from the existing luxury projects available in Macau” is how the head of residential property at Jones Lang LaSalle (Macau) Ltd, Jeff Wong Chi Wai, describes the complex. “When you look at the definition of luxury residential units, location, neighbourhood and privacy are often important factors,” he says. Mr Wong explains Tomson is not willing to sell all the homes at once because it is confident that demand for upmarket housing will hold up in the long run. He expects most of the buyers to be from Macau. Some will come from the mainland or Hong Kong, but he does not expect them to fit the usual mould of buyers that just invest in residential property and do not live in it.

Elite address “The lump sum is big. The unit is big. We expect it to be people with some relationship with Macau, whether they own enterprises here or operate a crossborder business and have to travel back and forth,” Mr Wong he says. He declines to estimate the prices. The developer is banking on the ap-

peal of an address on Penha Hill, where several of Macau’s elite have villas. Mr Wong highlights the exclusivity of the neighbourhood is one reason that few homes on Penha Hill have been on the market in recent years. He says the owners are wealthy, and are there for keeps, their homes having a sentimental value to their families. “It is very difficult for them to sell and relocate,” he adds. Mr Wong says in the past 10 years about 22,000 new homes have been completed in Macau but that only a handful of them are on Penha Hill. One of the few new projects on Penha Hill in recent years is the Fountainside, another low-density complex, which will contain 38 flats and four villas. By the end of December the developer, Macau Property Opportunities Fund, had pre-sold 20 flats at an average price of US$590 (MOP4,720) per square foot. The rest of the homes are expected to go on the market before the end of June. Macau Property Opportunities Fund has spent US$20 million on the project. The development is due to be completed this year.

Property | Market Watch Notable residential property transactions - 08/04 to 28/04, 2013

Source: Ricacorp (Macau) Properties Ltd

District

Property

Unit

Taipa

One Grantai

Block 3, H/F, unit N

2,283

15,500,000

6,789

Coloane

One Oasis Cotai South

Block 1, M/F, unit B

2,361

14,000,000

5,930

Floor area (sq. ft)

Sale price (HK$)

Price per sq.ft. (HK$)

Macau

Villa de Mer

Block 1, H/F, unit A

1,703

13,800,000

8,103

Macau

The Residencia

Block 5, M/F, unit B

1,696

12,300,000

7,252

Coloane

One Oasis Cotai South

Block 8, L/F, unit E

1,830

12,000,000

6,557

Coloane

One Oasis Cotai South

Block 8, L/F, unit F

1,830

12,000,000

6,557

Macau

The Residencia

Block 5, H/F, unit B

1,696

11,600,000

6,840

Coloane

One Oasis Cotai South

Block 2, L/F, unit E

2,066

10,536,600

5,100

Macau

The Residencia

Block 3, M/F, unit B

1,769

10,500,000

5,936

Coloane

One Oasis Cotai South

Block 2, L/F, unit C

1,781

10,300,000

5,783

Macau

Villa de Mer

Block 4, M/F, unit B

1,475

9,500,000

6,441

Macau

Villa de Mer

Block 4, M/F, unit B

1,475

9,450,000

6,407

Macau

Villa de Mer

Block 1, L/F, unit A

1,703

9,380,000

5,508

Taipa

Nova City

Block 13, M/F, unit B

1,515

9,200,000

6,073

Taipa

Nova City

Block 13, M/F, unit B

1,518

9,200,000

6,061

Taipa

Nova City

Block 15, M/F, unit D

1,559

9,200,000

5,901

Macau

Villa de Mer

Block 4, H/F, unit C

1,371

8,700,000

6,346

Coloane

One Oasis Cotai South

Block 8, M/F, unit F

1,216

7,539,200

6,200

Macau

The Residencia

Block 1, H/F, unit C

1,570

7,500,000

4,777

Macau

Green Island

Block 3, L/F, unit O

1,452

7,380,000

5,083

Macau

Green Island

Block 2, H/F, unit H

1,334

7,350,000

5,510

Taipa

Nova City

Block 16, M/F, unit D

1,050

7,180,000

6,838

Macau

The Residencia

Block 4, H/F, unit C

1,209

5,980,000

4,946

Macau

One Central

Block 1, M/F, unit B

1,359

5,980,000

4,400

Macau

Pearl Horizon

Block 7, H/F, unit D

1,069

5,970,000

5,585

Macau

Villa de Mer

Block 5, H/F, unit D

734

4,800,000

6,540

Taipa

Fast Garden

Block 3, M/F, unit M

880

4,580,000

5,205

Note: L/F - Low floor; M/F - Middle floor; H/F - High floor

Notable residential property rentals - 08/04 to 28/04, 2013 Type

Property

Unit

Taipa

One Grantai

Block 5, M/F, unit S

Macau

Villa de Mer

Taipa

The Buckingham

Macau

Source: Ricacorp (Macau) Properties Ltd

Floor area (sq. ft)

Rent price (HK$)

Price per sq.ft. (HK$)

3,041

30,000

9.87

Block 1, M/F, unit A

1,703

18,000

10.57

H/F, unit D

1,873

18,000

9.61

Villa de Mer

Block 2, M/F, unit A

1,695

16,000

9.44

Taipa

Nova City

Block 6, M/F, unit A

1,081

15,000

13.88

Taipa

Nova City

Block 12, M/F, unit B

1,318

14,500

11.00

Macau

La CitĂŠ

Block 4, H/F, unit A

1,622

14,000

8.63

Taipa

Nova City

Block 4, M/F, unit D

1,050

13,000

12.38

Taipa

Nova City

Block 4, M/F, unit A

1,081

13,000

12.03

Macau

Villa de Mer

Block 1, H/F, unit C

961

12,000

12.49

Macau

The Residencia

Block 5, M/F, unit C

1,207

12,000

9.94

Macau

La Baie Du Noble

Block 1, L/F, unit E

1,576

12,000

7.61

Note: L/F - Low floor; M/F - Middle floor; H/F - High floor

MAY 2013

Property Statistics

Construction - private sector

Year-on-year change (%)

2012

2,558 2,443 100 15 1,592 1,526 49 17

Building units completed - Residential - Commercial and offices - Industrial and others Building units started - Residential - Commercial and offices - Industrial and others

84.4 122.3 -56.7 -73.7 -26.3 -25.7 -43.0 -15.0

Transactions (1) 25,419 16,917 7,175 9,742

Total units transacted - Residential - New building - Old building Resident buyers (as percentage of total buyers) - Commercial and offices Resident buyers (as percentage of total buyers) - Parking spaces - Industrial and others Total value of total units transacted (2)

3.2 points -5.0

n/a 5,122 408

n/a -26.6 19.0

MOP74.2 billion

- New building

MOP48.8 billion

- Old building

MOP25.5 billion MOP19.0 billion

- Commercial and offices - Parking spaces

MOP3.4 billion

- Industrial and others

MOP4.3 billion

32.3 26.1 17.8 45.9 49.7 22.8 120.6

52.2 71.8 147.0 40.7

Under MOP1 million MOP1 million to MOP1.9 million MOP2 million to MOP2.9 million MOP3 million to MOP3.9 million MOP4 million or above

3.9 points 37.6 65.0

percentage

MOP2.8 billion MOP1.8 billion MOP0.8 billion MOP0.3 billion MOP0.4 billion

MOP70,407 /m

- Macau Peninsula

MOP71,159 /m

- Taipa

MOP64,138 /m2

- Coloane

MOP79,008 /m

Macau

6.8 8.4 -0.5 -5.0

Jan-Feb 2013 Jan-Feb 2013 Jan-Feb 2013 Jan-Feb 2013

Notes

144.3 183.0 222.4 138.1 33.2 129.5 223.7

Feb 2012 Feb 2012 Feb 2012 Feb 2012 Feb 2012 Feb 2012 Feb 2012 Feb 2012 Feb 2012 Feb 2012 Feb 2012 Feb 2012

Year-on-year change (%)

Latest

-49.1 -24.0 64.3 179.3 254.2

54 114 207 162 425

Year-on-year change (%)

Jan-Feb 2013

Feb 2012

97.5 351 33

Average transaction price of residential units (3) Dec 2012

Jan-Feb 2013

Feb 2012

percentage

MOP4.6 billion

-45.5 -27.1 -4.8 17.8 42.0

1,466 3,372 3,011 2,141 6,927

Jan-Feb 2013

Feb 2012

4.6 points -6.3

MOP6.1 billion

Year-on-year change (%)

Jan-Feb 2013

Feb 2012

98.6 120

Transaction price of residential units (1) 2012

Notes

Year-on-year change (%)

1,466 962 405 557 percentage

90.3 2,972

211.4 291.7 40.0 -1,158.3 2,250.0 133.3 --

Latest

-8.0 -1.5 -7.8 3.7

MOP100.9 billion

- Residential

109 94 14 1 151 141 7 3

Year-on-year change (%)

2012

Year-on-year change (%)

Latest

Notes Feb 2013 Feb 2013 Feb 2013 Feb 2013 Feb 2013

Month-on-month change (%)

Latest MOP88,097 /m

MOP81,878 /m

MOP75,961 /m2 MOP112,892 /m

25.2 15.1 21.0 26.0

Notes Mar 2013 Mar 2013 Mar 2013 Mar 2013

(1) The data covers transactions with stamp duty paid during the reporting period, including transactions exempted from stamp duty (2) Figures are rounded, therefore they may not add up exactly (3) The data covers transactions with stamp duty bill issued during the reporting period, including transactions exempted from stamp duty MAY 2013

Source: Statistics and Census Service and Financial Services Bureau

HOME PRICES LIKELY TO DROP

Both Centaline and Midland say prices may go down this quarter Centaline (Macau) Property Agency Ltd says that the average transaction price of homes in Macau may drop this quarter. “There is room for home prices to go down by 5 percent in the second quarter as there are some uncertainties clouding the market here that affect market sentiment,” Centaline (Macau) Property Agency Ltd director Jacky Shek Po Tak said last month.

SALES OF INDUSTRIAL UNITS RED-HOT IN FIRST QUARTER

The price of industrial units rose by 20 percent year-on-year in the first quarter of this year, Roy Ho Sao Hang, senior regional sales director of Centaline (Macau) Property Agency Ltd, said. The average price per square foot of industrial units increased to MOP2,300 (US$287.5) in the first three months of the year, he added. Mr Ho said that industrial units performed the best among all types of properties in Macau during the first quarter, because their price is still relatively low, and these types of units are not covered by any of the government measures to curb real estate speculation.

Michael Chung, from Midland Realty (Macau) Ltd, says the drop may be even sharper. Home prices in March rose by 25.2 percent in comparison with the previous month, data from the Financial Services Bureau shows. The average price per square metre of residential space went up to MOP88,097 (US$11,012) in March, a new record.

SHUN TAK BUYS GOVT TAKES BACK BEIJING PROPERTY LA SCALA EXTRA LAND Conglomerate Shun Tak Holdings Ltd, headed by Pansy Ho Chiu King, announced last month that it has agreed to purchase a building in Beijing for office and hospitality use. The building is currently under construction. The deal will cost the company RMB1.29 billion (MOP1.67 billion). Upon completion, the expected construction area of the property will be about 55,484 square metres. Construction is expected to be completed in 2014.

The government has decided to take back an extra piece of land it had granted developer Chinese Estates Holdings Ltd in 2011 for the corruption-hit La Scala luxury residential project. The announcement was made last month. The government’s decision comes as no surprise. It is a follow-up after a previous land deal also involving the La Scala project was cancelled last year. This occurred as a result of the Court of Final Appeal finding that then-Secretary for Transport and Public Works Ao Man Long received HK$20 million (US$2.6 million) from Chinese Estates boss Joseph Lau Luen Hung and BMA Investment chairman Steven Lo Kit-sing in 2005 to ensure they would get the land.

MAY 2013

Gaming

MAY 2013

After topping the MOP30-billion gaming revenue barrier in March, the next monthly milestone may be a tougher ask BY MUHAMMAD COHEN ILLUSTRATIONS BY RUI RASQUINHO

xperts believe it is only a matter of time before Macau has a month with gaming revenue of MOP40 billion (US$5 billion). Just how much time is the question, along with what factors will drive casino revenue to that landmark level. “Given continued infrastructure development, which allows for easier and quicker access to Macau, combined with a significant amount of pent-up demand, it would not be surprising if MOP40 billion per month could be reached within the next few years,” says Union Gaming Group principal Grant Govertsen. “It will get there eventually,” University of Nevada, Las Vegas gaming historian David Schwartz says of the MOP40 billion milestone. “Either inflation or an increase in gambling will put it there.” Gaming revenue grew 25.4 percent year-on-year in March, breaching the MOP30-billion threshold at MOP31.3 billion, with strong increases in both the VIP and mass-market segments. According to research from Wells Fargo Securities, March mass-market table revenue grew 30 percent year-on-year. VIP revenue grew by 24.9 percent, reaching MOP21.8 billion, 69.7 percent of total revenue. The March VIP growth rate was almost 20 percentage points higher than the previous month. Many observers cited two major factors that keyed the VIP recovery in March. China’s leadership transition was completed, easing concerns that new President Xi Jinping’s regime would target Macau VIPs in its promised anti-corruption crackdown. Secondly, Lunar New Year was celebrated in February. While visitor arrivals spike during the holiday period, gaming revenue tends to peak in months before or after it.

MAY 2013

Gaming

Wells Fargo analysts led by Cameron McKnight add that March results were positively impacted by VIP hold. With normal hold, gaming revenue would have reached MOP29.1 billion. That would still have been a new record, but short of MOP30 billion. United States-based brokerage firm Sterne Agee says this was just the beginning. “We believe March marks the first of potentially six all-time monthly gross gaming revenue records we should see in 2013,” analyst David Bain told investors. Official figures for the full first quarter show VIP revenue grew 9.8 percent, and comprised 67.8 percent of total gaming revenue, which grew 14.8 percent, to MOP85.3 billion.

Next hurdle The March numbers underscore two key points about the road to MOP40 billion, given the dizzying levels already reached. First, along with a healthy economic and political environment, not just in the mainland but regionally and globally, there needs to be some kind of catalyst, a positive factor different from previous months. Second, VIP revenue is still the main growth driver. “Even though mass market revenue has been growing rapidly at an average of 30 percent, which is a more linear trend, in order to reach MOP40 billion, VIP has to be the driver,” says Hoffman Ma Ho Man, who follows both market segments as deputy chairman of gaming operator Success Universal Group Ltd and deputy chief executive of casino resort Ponte 16. Mr Ma warns that “growth may be choppy” due to the volatility of the VIP market. Nevertheless, he says that reaching MOP40 billion will necessarily mean growth in every

THE EXPRESSWAY TO RICHES M

arch’s gross gaming revenue of MOP31.3 billion (US$3.8 billion) was not just a new monthly record. The take exceeded gross gaming revenue for all of 2003, the last year before competition came to the market with the opening of Sands Macao in May 2004. From MOP28.7 billion in 2003, annual gross gaming revenue rose to MOP304.1 billion last year, a compound annual growth rate of 30 percent. Growth of the monthly gaming record has been equally spectacular. It first topped MOP5 billion in October 2006, the first full month of operations for Wynn Macau, and the opening month for Galaxy Entertainment Group Ltd’s StarWorld. China’s National Day falls annually on October 1, the occasion for a weeklong holiday for mainland workers, many of whom head to Macau to gamble. Monthly gross gaming revenue reached MOP10 billion for the first time in January 2008. Since August 2009, no month has recorded gaming revenue below MOP10 billion. It took 37 months for monthly gross gaming revenue to double to MOP20 billion, attaining MOP20.1 billion in March 2011. Precisely two years later, it reached MOP30 billion.

segment. “Mass market will obviously be generated by substantially more footprint, whereas the VIP market can be generated by bigger bets per customer. So reaching MOP40 billion, you can expect, will pack every hotel, casino, Macau Peninsula, Cotai, and non-gaming attractions,” he says. “VIP can move the market forcefully, but incremental contributions from mass and slots are also important,” Newpage Consulting principal David Green says. “Slots are just 4 percent of revenue in Macau but that’s still US$2 billion [per year], and that’s a substantial amount for any business. But the real horsepower is still from VIP.”

Supply-side economics Mr Green says recent consolidation in the junket business has created firms that are better able to “smooth out some of the variability” in the VIP market, as well as withstand challenges from competing jurisdictions. That will help sustain progress in gaming revenue growth toward MOP40 billion, he says. Reaching that level will probably also require something more than incremental revenue growth. “I think eventually Macau will be able to generate MOP40 billion gaming revenue per month, but that is unlikely in the near term with the lack of capacity addition,” CLSA Asia-Pacific Markets gaming analyst Richard Huang says, echoing other observers. “In 2016, when the new Cotai casinos start opening up, MOP40 billion per month should be achievable.” MGM China Holdings Ltd chief executive Grant Bowie, whose company is building one of at least six new or expanded multi-billion dollar resorts in Cotai, agrees. “As additional capacity is added to the market in terms of hotel rooms and other non-gaming attractions, we would expect that this will allow the mass market to continue to grow as we strive to broaden our customer appeal and attractiveness,” Mr Bowie says. “We are optimistic that the Macau gaming market and visitation levels will continue to grow,” he says. MAY 2013

The March numbers underscore two key points about the road to MOP40 billion. First, along with a healthy economic and political environment, there needs to be a positive factor different from previous months. Second, VIP revenue is still the main growth driver The veteran executive highlights some key main drivers: the economic growth of the mainland resulting in a growing middle class with rising disposable income; infrastructure improvements which can facilitate more convenient travel to and within Macau; and the investments made by gaming operators to solidify the city as a destination market. Government authorities continue to encourage diversification of Macau’s economy away from gaming. “The Macau and mainland governments are doing so progressively without causing any damage to the industry,” says Ponte 16’s Mr Ma. He likens the changes to Las Vegas’ development in the 1980s and 1990s, as it shifted from primarily gaming to a more wellrounded vacation destination.

New wave “We saw it happen in Las Vegas when they built the Sands Convention Centre and I think you will see a similar thing here,” Mr Green says. “The new class of customers is not the hard-core gambler, but a person that sees gambling as part of a range of entertainment that includes fun parks, shows, fine dining and other activities. You will broaden the base to attract visitors beyond hard-core players.” MAY 2013

Gaming

CASINO GROSS GAMING REVENUE MILESTONES 35,000

Uncharted territory with MOP30 billion MOP25 billion surpassed

30,000

MOP million

25,000

MOP20 billion barrier topped MOP15 billion marker breached

20,000

15,000

MOP10 billion milestone

Revenue breaks through MOP5 billion for the first time

10,000

2006

2007

2008

2009

Jan

Mar

Nov

Jul

2012

Sep

May

Jan

Mar

Nov

Jul

2011

Sep

May

Jan

Mar

Nov

Jul

2010

Sep

May

Jan

Mar

Nov

Jul

Sep

May

Jan

Mar

Nov

Jul

Sep

May

Jan

Mar

Nov

Jul

Sep

May

Jan

Mar

Nov

Jul

Sep

May

Jan

Mar

5,000

2013

Source: Statistics and Census Service, Gaming Inspection and Coordination Bureau

Mr Govertsen says Macau is, and always will be, a primarily gaming-focused tourism destination. According to him, even though non-gaming revenues have been growing rapidly, they are masked by the size of gaming revenues. “However, as the new resorts are developed on Cotai, we think that the growth of non-gaming will become more obvious, which, in the eyes of the government, is a very good thing. We also believe this will promote healthy broad-based growth of visitation to the market, such as the visitation the integrated resorts in Singapore have generated.” Mr Govertsen, who is based in Macau, warns of potential risks for the city’s gaming industry, most of them macrorelated and largely out of Macau’s control. Such risks could include a slowdown in the mainland’s economic growth, or a resurgence of a medical epidemic like SARS or bird flu. Macau’s table cap is not a limiting factor to long-term

growth, Mr Green argues. “I don’t think the table cap will be a problem. The Secretary [for Economy and Finance Francis Tam Pak Yuen] says there will be adequate tables for the new properties,” Mr Green, a former gaming regulator in Australia, says. “My reading is that every property will get tables, maybe not all that they want, but at least 300 tables for each property.” Aside from changes in the Cotai skyline, Mr Green says he does not believe Macau will look very different when it reaches MOP40 billion in monthly gaming revenue. “Given the premise that MOP40 billion will need more properties, you won’t have that much difference on the streets or in the casinos,” he says. “New developments in Cotai will be attractive to new visitors. But I don’t think another 50,000 visitors a day will suddenly be coming through the doors.”

THE TYRANNY OF REVENUE “

o be frank, I think there’s far too much focus on gross gaming revenue numbers. Every five minutes, there’s a new prediction,” Newpage Consulting principal David Green says. He blames market analysts for concentrating attention on the monthly number. “We’re talking about investments, not speculation. Once you get to the numbers Macau has reached, it doesn’t matter whether gaming revenue goes up 5 percent or down 5 percent in a month.” Union Gaming Group principal Grant Govertsen says: “We are probably

MAY 2013

the most long-term focused analysts, hence all the work we do on analysing infrastructure that will drive Macau’s future growth. “However, it is unfair or unrealistic to say that volatility in monthly gross gaming revenue numbers doesn’t matter,” Macau-based Mr Govertsen says. “The reality is that all six concessionaires have publicly traded stocks and investors have always reacted to daily, weekly and monthly trends. As such, there will likely always be a big focus on gross gaming numbers. That’s just the way it is.”

Aside from changes in the Cotai skyline, Newpage Consulting principal David Green says he does not believe Macau will look very different when it reaches MOP40 billion in monthly gaming revenue

Gaming Statistics

Casino gaming 2012 MOP 304.1 billion

Gross gaming revenue

5,485 16,585 35 casinos

Gaming tables Slot machines Number of casinos

Market share per casino operator* 2012 SJM Holdings Ltd Galaxy Entertainment Group Ltd Sands China Ltd Wynn Macau Ltd Melco Crown Entertainment Ltd MGM China Holdings Ltd

27% 19% 19% 12% 14% 10%

Year-on-year change (%)

13.5 3.5 3.3 1 casino

MOP 28.3 billion

13.2 9.7 1.9 1 casino

5,749 16,406 35 casinos

Year-on-year change (%)

-2 3 3 -2 -1 --

Year-on-year change (%)

Latest

(estimated)

percentage points percentage points percentage points percentage point percentage point

Month-on-month change (%)

26% 17% 21% 10% 16% 9%

-1 -1 --1 2 --

percentage point percentage point

Notes Apr 2013 Mar 2013 Mar 2013 Mar 2013

Notes Apr 2013 Apr 2013 Apr 2013

percentage point percentage point

Apr 2013 Apr 2013 Apr 2013

Gross revenue from casino games Roulette Blackjack VIP Baccarat Baccarat

MOP892 million MOP2,950 million MOP210,850 million MOP66,251 million

Fantan

MOP249 million

Cussec

MOP5,546 million

Paikao

MOP87 million

Mahjong Slot machines 3-Card Poker Fish-Prawn-Crab

MOP203 million MOP13,244 million MOP211 million MOP22 million

3-Card Baccarat Game

MOP347 million

Craps

MOP137 million

Texas Holdem Poker

MOP289 million

Lucky Wheel Live Multi Game

MOP35 million MOP895 million

Stud Poker

MOP1,472 million

Casino War

MOP246 million

Fortune 3 Card Poker

MOP206 million

Year-on-year change (%)

13.9 8.8 7.5 36.1 18.0 16.2 -23.7 190.0 15.9 10.5 -56.9 23.5 -9.3 4.3 0.0 187.8 12.5 8.8 46.1

Latest MOP268 million MOP795 million MOP57,815 million MOP20,016 million MOP62 million MOP1,553 million MOP22 million MOP45 million MOP3,572 billion MOP52 million MOP4 million MOP93 million MOP13 million MOP74 million MOP10 million MOP323 million MOP415 million MOP63 million MOP87 million

Year-on-year change (%)

82.3 14.2 9.8 32.3 -4.6 14.7 -15.4 -11.8 8.0 -5.5 -33.3 2.2 -56.7 -25.0 132.4 19.9 -11.3 112.2

Notes Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013

Gross revenue from other gaming activities 2012 Greyhound Racing

MOP205 million

Horse Racing

MOP356 million

Chinese Lottery

MOP6 million

Instant Lottery

MOP0.0014 million

Sports Betting - Football

MOP418 million

Sports Betting - Basketball

MOP111 million

Year-on-year change (%)

-31.0 -19.1 --61.1 15.5 29.1

Latest MOP46 million MOP121 million MOP1 million MOP0.0013 million MOP101 million MOP46 million

Year-on-year change (%)

-14.8 37.5 -50.0 550.0 -1.0 27.8

* Figures are rounded to the nearest unit, therefore they may not add exactly to 100 percent

MAY 2013

Notes Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013

Source: Gaming Inspection and Coordination Bureau and industry sources

2012

Gaming

The zombie commission

The Gaming Commission was revamped three years ago but seems to have done nothing since – despite claims it is actively steering casino development BY LUCIANA LEITÃO

MAY 2013

aming is Macau’s bread and butter, the city’s largest industry by revenue. It makes sense that the government would establish a high-level body to oversee the industry’s direction, the Gaming Commission, over and above the Gaming Inspection and Coordination Bureau, which supervises the industry’s day-to-day needs. Yet, the Gaming Commission seems to have been idle since it was revamped over three years ago. The commission has neither held any meetings that have made the news, nor published any reports. The policy address for 2013, delivered last year, contained no reference to the commission. The commission’s purpose is to re-

search, draft gaming policy, monitor and create guidelines for the industry. The chief executive is its chairman. The Office of the Secretary for Economy and Finance says the commission is still active. “This commission has been working, without any interruption,” a spokesperson told Macau Business. But the office would neither say how many times the commission had met since 2010, nor describe the work it had done. A political analyst at the Macau Polytechnic Institute, Larry So Man Yum, disputes the government’s official line. He says the commission is inactive. A source in the gaming industry, who asked not to be identified, corroborates Mr So’s impression.

67 The source says nobody in the industry has heard from the commission since it was revamped. “It is my understanding that it actually no longer meets,” the source says. The government created the Gaming Commission in 2000. The commission played a big part in the liberalisation of the gaming market. Its commissioner of legal affairs, Jorge Oliveira, was one of its most active members in that era. Mr Oliveira was widely considered the top expert on the law as it applies to gaming. The chief executive at the time, Edmund Ho Hau Wah, held Mr Oliveira’s work in high regard. The government revamped the commission in February 2010. It changed and enlarged the membership of the commission, appointing more senior officials.

Club ambience

DORMANT CHAMBER T

he Gaming Commission is not the only idle body in the world of gaming. The Chamber of Macau Casino Gaming Concessionaires and Subconcessionaires, set up by the city’s six casino operators to prevent “destructive competition”, has been dormant for almost four years. The casino operators agreed to establish the chamber in February 2009. After just a few meetings, the chamber had set a ceiling of 1.25 percent of rolling chip turnover on commissions paid to junket operators. But the chamber fell quiet soon after July 2009, when its chairman, Stanley Ho Hung Sun, suffered a fall which impaired his health. In an interview with Macau Business this year, the deputy chairman of Galaxy Entertainment Group Ltd,

Francis Lui Yiu Tung, said a body to represent the six casino operators officially would be helpful. “There are certain reasons why an official body should be established: to make sure some common interests of the industry can be discussed on a more official platform. But it is going to take some time,” he said. Mr Lui denied that his call for such a body implied that the casino operators did not talk to each other. But the head of the Gaming Inspection and Coordination Bureau, Manuel Joaquim das Neves, told Macau Business last year: “It would be good if gaming operators restarted [official] contacts to solve some of the problems they have in common.”

The new members included the secretary for administration and justice, the secretary for transport and public works, and two members of the chief executive’s staff. The secretary for the economy and finance, the director of the Gaming Inspection and Coordination Bureau and the representative of the secretary for security kept their seats at the table. Mr Oliveira and the representative of the secretary for social affairs and culture lost theirs. In the 2010 makeover, the government sought to define the commission’s duties more clearly. It abolished a consultative committee, set up in October 2007, which had never met. The revamp faced some opposition from the gaming industry. SJM Holdings Ltd executive director Angela Leong On Kei criticised the commission for being composed of “solely heads and representatives of the civil service”. Ms Leong said the commission could not work without people in the industry, academics and other experts. Some gaming industry analysts welcomed the revamp. The head of the Institute for the Study of Commercial Gaming at the University of Macau, Davis Fong Ka Chio, told Macau Business at the time that the commission had “broadened its view”, becoming less gaming-oriented in order “to solve conflicts” created by the boom in the gaming industry. MAY 2013

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PANSY HO SAYS MACAU HAS “CLEANED UP”

Pansy Ho Chiu King, the chairperson of MGM China Holdings Ltd, says the days when Macau was seen as a shady gaming centre, connected with money laundering and violence, are gone. “It has cleaned up,” Ms Ho told U.K.-based newspaper The Independent. “We don’t see any of that happening [now].” In an interview published last month, she said there is “a lot more discipline now, in terms of the regulatory environment.”

STUDIO CITY ON TRACK FOR MID-2015 OPENING

Union Gaming Research says construction progress at Melco Crown Entertainment Ltd’s Studio City project is “well on track”. “All piling works seem to have been completed and several tower cranes have replaced the piling machines,” analysts Grant Govertsen and Felicity Chiang wrote. The two analysts say that vertical progress should be evident soon and that the project is still “well on track for a mid-2015 opening”.

BEIJING DENIES INFLUENCE IN CASINO LICENCE GRANTING The central government dismisses claims it influenced the way in which Las Vegas Sands got its Macau gaming licence The central government has dismissed claims it had any influence over how the Macau government chose to give U.S.-based gaming operator Las Vegas Sands Corp a gaming licence in 2002. “The process was carried out by the special administrative region’s government by themselves on the principles of openness and transparency in accordance with the law,” China’s foreign ministry said in response to a query from Reuters.

The statement came on the sidelines of a court case in which Hong Kong businessman Richard Suen is seeking US$328 million (MOP2.6 billion) over claims he helped Las Vegas Sands to get its Macau gaming licence. Mr Suen claims that meetings he arranged between Las Vegas Sands’ chairman Sheldon Adelson and Chinese officials were instrumental in this. A Nevada court in the United States is currently hearing the case.

GALAXY PHASES 3 AND 4 TO FOCUS ON PREMIUM MASS

The upcoming phases three and four of Galaxy Macau casino resort “will be principally targeted at premium mass guests”, says project owner Galaxy Entertainment Group Ltd. The HK$50 billion (US$6.44 billion) to HK$60 billion extension will include 5,500 hotel rooms, a multi-purpose 10,000-seat arena, as well as a 1,500-seat multi-purpose showroom, the company said. It will also include a 50,000 square-metre convention centre and gaming capacity of up to 1,000 tables and 3,000 slots. The plan is to start construction “by the end of 2013/in early 2014”.

MAY 2013

Gaming

Mark his words Mark Mobius is stepping up Franklin Templeton’s investment in gaming chips BY EMANUEL GRAÇA

ranklin Templeton Investments of the United States is raising its stake in Macau’s gaming industry. The company already holds shares in SJM Holdings Ltd and is now investing in other casino operators. “Some of those look very attractive now, and we are beginning to pick those as well,” Templeton Emerging Markets Group’s executive chairman, Mark Mobius, told Macau Business last month. Mr Mobius is one of the world’s best-known investors, having more than 40 years of experience in emerging markets around the globe. He said in December 2011 that Macau was a good prospect for investment opportunities. Now he is even more bullish. “We expect this year the gaming revenue will grow by anywhere between 15 to 20 percent, which is tremendous growth. We think there is going to be lots of opportunities,” he says. Mr Mobius says mainland tourists of all kinds – not only gamblers – will play an increasing part in driving growth here. “Macau is gradually being transformed from just having gaming. More and more of the casino complexes are adding entertainment. So it will become a destination for the family, not just for gamblers.” Sands China Ltd announced last month a licensing agreement with DreamWorks Animation SKG Inc of the United States to have people dressed as DreamWorks animated characters roaming around nongaming areas of Sands China resorts in Cotai from July. The terms of the deal have not been made public. Sands China chief executive Edward Tracy says the purpose is to make the resorts more appealing to families.

Reward and risk Mr Mobius was in Macau last month for the APAC Investments Summit 2013, held at Venetian Macao. He took the opportunity to meet casino executives here and find out about new developments. Mr Mobius expects all gaming stocks MAY 2013

to benefit from Macau’s growth. “It is a question, if you are an investor, of which ones are going to do better,” he says. SJM Holdings Ltd is one of his favourites. Mr Mobius says the gaming company has been “doing quite well” and it pays a “steady flow” of dividends. He warns that investing in Macau gaming stocks can be risky. “If you had SARS or some epidemic like that, gaming would be devastated here,” he says. Despite intermittent rumours about clampdowns on gambling, Mr Mobius declares himself unafraid of any changes in policy in the mainland. “The five-year plan of the central government definitely has a place for Macau. They want to see it grow as a centre for leisure,” he says. He is also unfazed by the recent efforts of the Philippines to grab a bigger share of the international gaming market. A mix of Philippine and international companies are opening four US$1 billion (MOP8 billion) casino resorts in Manila. The fi rst was inaugurated in March.

More town planning Mr Mobius says the Philippine gaming industry will be driven mainly by domestic demand. “There will be some people flying in, but basically it will not be hurting Macau, just like Singapore has not hurt Macau. There is plenty of room for different centres.” Mr Mobius has been coming to Macau since the 1960s. He compares development here to development in Dubai before the turn of the century. He praises the government for liberalising the gaming market and bringing in investment by the big casino operators in the United States. “It lifted the image in terms of the quality of Macau.” He says it also created competition and employment. “What the government didn’t do well, I believe, is more town planning, on a wider scope. That is a drawback. But they gradually are getting around to that,” Mr Mobius says.

“We expect this year the gaming revenue will grow by anywhere between 15 to 20 percent, which is tremendous growth. We think there is going to be lots of opportunities,” says Mark Mobius

POSITIVE THINKING T

empleton Emerging Markets Group executive chairman Mark Mobius says the accession of a new generation of leaders in China will have a positive effect on investment. He points out that the central government has said it wishes consumption to play a more important part in the mainland economy. “There is this whole list of industries that will grow on the back of that,” Mr Mobius says. “Of course, the correlation between the economy and the stock market may not necessarily be one-to-one. But, generally speaking, the trend will be up.” Mr Mobius says the gradual transformation of state-owned enterprises in the mainland into private companies is creating opportunities for individual and institutional investors as more of these companies go public. “In addition, there will be a greater emphasis on private enterprise, because the central government realises that, in order to get dynamic growth, they need a very strong private sector.” He is unflustered by the turmoil in the euro zone, and says the euro and the European Union will survive, but that solving the euro zone’s problems may take some time. Mr Mobius will continue to focus on emerging markets. The markets in Southeast Asia that he highlights are Indonesia, Thailand and Vietnam. “Now the Philippines is going through a complete makeover. They are beginning to become much less corrupt and more productive,” he says. One of Mr Mobius’s latest projects is a sharia-compliant investment fund that concentrates on Asia, which was launched this year. To comply with sharia, or Islamic law, the fund must not make money from interest on debt or from investing in companies in certain fields such as gaming or dealing in alcohol or pork.

MAY 2013

Gaming

In smoky rooms A government survey finds smoking areas inside casinos do not meet the minimum air quality requirements he first evaluation of air quality inside the smoking areas of the city’s casinos is out, and the study is a black mark against the city’s antismoking efforts. Two out of every three casinos and slot machine parlours failed to comply with the minimum air quality standards, the Health Bureau found. A total of 28 gaming venues, 64 percent of the total, failed to comply with at least one of the six reference air quality requirements. All of the city’s 44 casinos and slot machine parlours were evaluated. The bureau collected air samples in the ventilation systems of the smoking areas in January and February. Among the gaming operators, only MGM China Holdings Ltd, which runs one casino, and Sands China Ltd had their properties cleared of any infractions. Of the casinos failing to meet the minimum standards, 16 were operating under SJM Holdings Ltd’s gaming licence.

Smoking has been confined to designated areas in casinos and slot machine parlours since January. Gaming venues must make at least half their gaming floor area smoke free. While smoking in public buildings has been banned, the government made an exception for the gaming industry because it felt a complete ban would damage it and the economy. Gaming venues have to ensure that the quality of the air in smoking areas surpasses a set of minimum standards.

Breathing space The venues that failed to meet the Health Bureau’s requirements have been warned that they must improve. The Macau Federation of Trade Unions wants the government to step up supervision inside casinos. Secretary for Economy and Finance Francis Tam Pak Yuen says the government is “determined” to demand that casinos comply with the rules.

PASS MARK

Only 16 gaming venues complied with the minimum required air quality requirements inside their smoking areas, the Health Bureau found Casinos: - Grand Lisboa - Galaxy Macau - Venetian Macao - Sands Cotai Central - Plaza Macao - Sands Macao - MGM Macau - City of Dreams - Altira - Greek Mythology - Le Royal Arc - Waldo - Grand Waldo Slot-machines parlours: - Mocha Hotel Taipa Best Western - Mocha Macau Tower - Mocha Altira

But Mr Tam downplayed the results, saying it was difficult to assess the effectiveness of the ban so far, as this was only the first evaluation. The government can punish casinos that break the rules by reducing the size of their smoking areas or by banning smoking on their premises altogether. SJM Holdings pledged to act quickly to improve the air quality inside its 16 non-compliant casinos and slot machine parlours. Third-party companies run many of these venues. Chief executive Ambrose So Shu Fai said SJM Holdings was not able to comply straight away with the standards at all of its properties because the majority were located in old buildings. They were not designed to include smoking and non-smoking zones, he said. The government only announced its specifications for smoking areas inside casinos in late October, just two months before the ban was enacted. This provoked complaints by gaming operators who claimed that it would be a rush job to have everything ready on time. MAY 2013

LOUIS XIII BREAKS GROUND IN COTAI Hong Kong-listed Louis XIII Holdings Ltd hosted an official groundbreaking ceremony last month for its boutique casino-hotel in Cotai, also named Louis XIII. The company’s chairman Stephen Hung says the hotel’s top suite will cost US$130,000 (MOP1 million) per night, the Financial Times reported. The company, formerly called Paul Y Engineering Ltd, is planning to build the casino-hotel next door to the residential complex One Oasis. The casino is still awaiting formal government approval.

GAMING REVENUE TO GROW 17 PERCENT IN 2013

Deutsche Bank has increased its estimate for Macau’s casino gross gaming revenue growth for 2013 to 17 percent, up from an earlier forecast of 11 percent. “Junkets said VIP growth has finally returned to doubledigit, as they start to extend more credit on [the] back of China’s gross domestic product recovery,” Hong Kong-based research analyst Karen Tang wrote in a report released last month. “Incorporating this pick up in VIP demand we raise Macau’s 2013 VIP growth from 5 percent to 13 percent year-on-year,” she said.

Photo: Kenneth Lim

SANDS CHINA FINED FOR U.S. FILE TRANSFER The casino operator declined to appeal the case, linked to Steve Jacobs’ dismissal

Venetian Macau Ltd, a subsidiary of Sands China Ltd, was fined for a total of MOP40,000 (US$5,000) for breaching Macau’s privacy law, in a case linked to the company’s former chief executive Steve Jacobs, the Personal Data Protection Office said last month. Sands China decided not to appeal the decision and has already paid the fine. The office concluded that Sands China transferred data stored in the computer used by its former chief executive to the United States, shortly after he was dismissed in 2010, without notifying or obtaining an authorisation from the local watchdog. Sands China admitted the data transfer, according to the Personal Data Protection Office. Mr Jacobs is currently suing Sands China’s parent company, Las Vegas Sands Corp, for wrongful termination. The case has been filed in a Nevada court, in the United States.

RECORD-BREAKING OPENING FOR NEW POKERSTARS’ ROOM

PokerStars’ live room at City of Dreams opened with “roaring success”, the company has said. The cardroom was launched with the 18th instalment of the Macau Poker Cup, from April 19 to 28, setting several new records. Over 10 days, the nine events drew a total of 2,812 players and awarded HK$17 million (US$2.2 million) in prize money – both records for the Macau Poker Cup series. The tournament also broke Asia’s record for unique-player field for one event. It set a new all-time high of 891 players, shattering the previous record of 635.

MAY 2013

Gaming

Houses of cards As construction work in Cotai intensifies, so too does concern about how to staff the new casino resorts BY CLĂ UDIA ARANDA

he government has just promised new efforts to meet demand for skilled labour, but casino operators continue to struggle to find qualified workers. One gaming company warns that the limited supply of suitable manpower could hamper the new wave of casino resorts in Cotai. Chief Executive Fernando Chui Sai On acknowledged last month that the shortage of skilled labour would worsen after the completion of the casino resorts now under construction. Mr Chui told the Legislative Assembly that the lack of

MAY 2013

qualified workers was restricting development. He promised to take new measures to reduce the problem, including making it easier to employ non-residents studying in Macau. The unemployment rate is now 1.9 percent, the lowest ever. Casino operators often say the pool of skilled labour is insufficient to meet demand. At the end of last year, gaming companies were short of more than 2,100 workers, according to government data. That was just the number of vacancies in casinos, excluding jobs in hospi-

tality and other ancillary sectors. Casino operators may have been comforted by the fall in their employee turnover rate to 3.8 percent in the fourth quarter of last year, down from 6.6 percent a year before. But they fear that when the new casino resorts begin to open, poaching of employees will return, pushing up pay, as happened not so long ago. Average monthly pay in the casino industry was MOP18,040 (US$2,255) in December, 7.9 percent more than a year earlier. â&#x20AC;&#x153;The success of our business may

GAMING COMPANY PAYROLLS AT THE END OF LAST YEAR 30,000

Number of employees

25,000 20,000 15,000 10,000 5,000 0

Galaxy Entertainment Group

SJM Holdings

Wynn Macau

MGM Macau*

Melco Crown Entertainment

Sands China

*Includes part-time workers Source: 2012 annual report

2015 and the first half of 2017. As expansion continues, the lack of skilled labour poses problems for gaming companies over and above the problem of simply filling vacancies. Regulatory requirements demand that a sizeable proportion of their workforces have qualifications that only considerable amounts of training and experience can give them. And casino operators are allowed to employ only permanent residents of Macau as croupiers or gaming floor supervisors. A specialist in human resources at the University of Macau, Zenon Udani, says getting skilled labour “is definitely a concern for the larger companies established in Macau, especially those in the hospitality and gaming industry, because their primary concern is delivering the right service.” Gaming companies try to make up for the shortage of qualified workers by investing heavily in training. Mr Udani estimates that they invest about 5 percent of their revenue in training and development. depend on our ability to attract and retain adequate qualified personnel,” says gaming operator Melco Crown Entertainment Ltd’s annual report for 2012, released last month. “A limited labour supply and increased competition could cause labour costs to increase.”

Tightly bound Melco Crown forecasts that Studio City, its second casino resort in Cotai, will open by the middle of 2015. Studio City will be one of at least six new or greatly expanded casino resorts due to open in Cotai between

Casino operators often say the pool of skilled labour is insufficient to meet demand. At the end of last year, gaming companies were short of more than 2,100 workers

A recent global study of human resources by international consultancy Mercer, published in March, found 60 percent of the 1,260 employers surveyed had spent more on manpower in recent years. But only 24 percent rated their plans for meeting their immediate and long-term manpower needs as highly effective.

From the ranks Sands China Ltd’s annual report for last year says the company trained more than 24,500 employees during the course of 2012. It held more than 40 recruitment fairs in Macau and more similar events in Nepal, South Korea, Taiwan, Thailand, Vietnam and Guangzhou. The company opened the Sands Cotai Central casino resort in Cotai a year ago. Galaxy Entertainment Group Ltd gave training to 93 percent of its employees last year. The company began a leadership development programme for senior and middle management, and paid for 24 staff to take diploma courses relevant to gaming management. MGM China Holdings Ltd, Wynn Macau Ltd and SJM Holdings Ltd also gave employees training, putting on internal courses and workshops. Mr Udani says employees can give a company its competitive edge. “Without the proper training, direction and investment, organisations lose out to the competition,” he says. For gaming companies, retaining employees is as much of a challenge as nurturing them. To keep employees in the fold, many companies are trying other ways besides offering attractive pay and benefits. MAY 2013

Gaming

THE BIG THING

asino operators have been soaking up more and more of Macau’s pool of skilled labour since the liberalisation of the gaming market in 2002. Small and medium enterprises complain that they are unable to match the pay and benefits offered by the gaming industry. Small and Medium Enterprises Association administrator Kenneth Lei Chi Leong says the city has between 25,000 and 30,000 SMEs. Up to 95 percent have 10 employees or less, and they are mostly family-run shops or restaurants with little know-how about human resource management. Nine out of 10 SMEs had problems getting enough suitable staff in 2011, according to the results of a study by the association and the University of Macau. The results indicated that almost all small businesses ranked the shortage of labour as their primary problem. The association has asked the government on more than one occasion to make it easier to import labour and to allow smaller businesses to recruit more outsiders. “This is the only way to create a competitive job market, composed of creative, proactive and hardworking people,” says the owner of a restaurant in the city centre. Macau residents “do not want to wash dishes in a small restaurant,” the restaurateur says. A human resources specialist at the University of Macau, MAY 2013

Zenon Udani, says there are plenty of qualified workers abroad with the skills and experience Macau needs. But restrictions on importing labour make it hard even for gaming companies to take on such workers, let alone SMEs, he says. The managing director of human resources company MSS Recruitment and job portal hello-jobs.com, Jiji Tu, says it is rare to find an SME that invests in its human resources. “Lack of qualified talent is a real concern but the greater concern is SMEs not responding fast enough in using human resources strategies as an integral part of their overall business strategy,” she says. Ms Tu says that an enterprise’s ability to attract qualified workers depends on factors such as its reputation, the pay and benefits it offers, and whether an employee can make a career out of working there. However, most SMEs have no human resources strategy. A managing partner in MSS Recruitment and hello-jobs.com, Loh Seow Yuen, says small businesses could hold on to employees longer if they made their jobs more satisfying. Ms Loh says that good pay obviously helps keep staff in the fold, but so does the scope of their jobs and their working environment. “A great working relationship can be a great motivating and retention factor, as the workplace is our second home,” she says.

For gaming companies, retaining employees is as much of a challenge as nurturing them. To keep employees in the fold, many companies are trying other ways besides offering attractive pay and benefits One way is to offer employees opportunities to advance their careers. The government has been pushing gaming companies to take measures that will allow them to promote staff who are Macau residents to higher positions.

Value added Sands China promoted more than 2,100 employees last year, of which 87 percent are Macau residents. Among this number were nearly 400 employees, 96 percent of them Macau residents, that the company promoted to management positions.

“The casino industry has been localising even the managerial positions, which means in the following years we will be seeing many more locals as managers,” says Mr Udani. “Training and education, and particularly mentoring programmes, become pivotal.” To retain staff, gaming companies commonly reward employees for their achievements. The industry also often tries to help employees to balance their work with the other aspects of their lives. MGM China, for instance, has teams composed of employees who compete

in sports ranging from football to badminton to dragon boat racing – which also serves to build team spirit among its staff. These efforts are paying off for some casino operators. The results of Sands China’s surveys of its employees last year indicate 83.8 percent were satisfied with their jobs. Three out of four felt they had opportunities to advance their careers. More than 81 percent believed they would probably be working for Sands China for the next two years.

MAY 2013

Gaming

Las Vegas

GLOBAL GAMING REVENUE UP BY 2 PERCENT IN 2012

Europe’s weak performance impacted global gaming revenue growth in 2012, according to the findings of the latest gambling research by Global Betting and Gaming Consultants. Global gambling revenues rose by around 2 percent to US$430 billion (MOP3.4 trillion) in 2012, the research house says. Asia’s gambling revenues rose to US$135 billion, an increase of 5 percent over 2011.

PRO-CASINO LAWMAKERS TRY TO PUSH GAMBLING IN JAPAN A pro-casino group of Japanese lawmakers is planning to submit this year legislation to legalise casino gambling in Japan. The cross-party casino group aims to submit a promotional bill to parliament in the autumn, Takeshi Iwaya, the deputy head of the lobby of more than 100 lawmakers, told Reuters. Incumbent Prime Minister Shinzo Abe has previously hinted he could be open to the idea of having casino resorts in Japan.

CASINO WINNINGS IN TAIWAN TAX-FREE

The Taiwan government has decided not to impose a tax on casino winnings for the first 20 years after the establishment of casinos in the archipelago. The announcement was made by Minister Without Portfolio Yang Chiu-hsing, who is in charge of drafting a bill stipulating regulations for the operation of casinos. Initially, the Taiwanese government was proposing that customers pay 20 percent tax on any money they won at a casino.

MAY 2013

OKADA REVIEW SAYS WYNN PROBE “DEEPLY FLAWED”

The results of the review commissioned by the Japanese businessman were announced last month An independent review commissioned by Kazuo Okada found that a Wynn Resorts Ltd investigation into the Japanese businessman’s activities in the Philippines was “deeply flawed”. Former U.S. Homeland Security Secretary Michael Chertoff conducted the review for Mr Okada. Last year, Wynn Resorts decided to forcibly buy out Mr Okada’s 20 percent stake in the company, after a year-long internal investigation concluded that the Japanese businessman allegedly offered cash payments and gifts totalling approximately US$110,000 (MOP880,000) to executives at the Philippines casino regulator, breaching U.S. anti-corruption laws. Mr Okada was Wynn Resorts’ biggest shareholder. Wynn Resorts

is the parent company of Wynn Macau Ltd. Mr Chertoff concluded that Wynn Resorts’ independent investigation, conducted by former FBI director Louis Freeh, was “structurally deficient, one-sided and seemingly advocacy-driven,” Mr Okada’s Universal Entertainment Corp said. Mr Freeh’s company, Freeh Group International Solutions LLC, told Bloomberg in an e-mailed statement that Mr Chertoff’s “generalisations and desire for different conclusions” had not “credibly challenged or contested” its investigation results. Wynn Resorts and Mr Okada are entangled in a legal battle over a series of issues, including the forcible buyout the Japanese businessman’s stake in the company.

MAY 2013

Business

MAY 2013

The meeting point G2E Asia showcases the latest technology and products in the gaming industry

MAY 2013

rom May 21 to May 23, Macau again welcomes the leading minds in the gaming industry for the seventh edition of Global Gaming Expo Asia (G2E Asia). The event, organised by the American Gaming Association and Reed Exhibitions, takes place at Venetian Macao. It will provide first-hand insights into the latest technologies that will be shaping the industry for years to come. Organisers expect this year’s G2E Asia to be of heightening interest. This is an exciting time for gaming in the region, given that Asia remains the centre for growth in the global gaming industry. There are on-going new developments throughout the region, from the Philippines to Taiwan, and Macau continues to report record-breaking gaming revenue. Attendees at this year’s G2E Asia will have the opportunity to hear more about these novelties during the event’s conference programme. As expected, Macau’s heavyweight gaming management will be out in force, for participants to network with and gain further insight from. Frank Fahrenkopf, the departing head of the American Gaming Association and one of the co-founders of G2E Asia, has reasons to be proud. As he envisioned, the event has become the one place for the Asian industry to come together, to not only see the latest products and learn about the newest trends, but also to network and share ideas about current and future industry issues. In this G2E Asia special by Macau Business, besides providing you with all the essential information on this year’s edition, we talk to some of the top gaming executives from the growing slot machine sector. We also look at the latest products and gaming tools that will be on display at G2E Asia. And we give participants a detailed rundown of the three-day schedule. With that, we wish all exhibitors and attendees a great and successful G2E Asia.

MAY 2013

PROGRAMME SCHEDULE Exhibits May 21 11:30am – 04:30pm (by special invitation only) May 22 10:00am – 05:30pm May 23 10:00am – 05:30pm

Conference Day 1 Tuesday, May 21 09 : 30am – 10 : 30am 10 : 45am – 11 : 45am 12 : 00pm – 01 : 00pm 01 : 15pm – 02 : 15pm 02 : 30pm – 03 : 45pm 04 : 00pm – 05 : 00pm

Growth stream: Asia Pacific overview Finding the Philippines: Manila’s Entertainment City debuts Conference luncheon Island fever: Taiwan’s steady progress toward gaming Macau update, part 1: the final phases of development for Cotai Macau update, part 2: Hengqin Island and the next mass market for Macau tourism

Day 2 Wednesday, May 22 10 : 15am – 11 : 15am 11 : 30am – 12 : 30pm 12 : 30pm – 01: 30pm 01 : 30pm – 03 : 00pm 03 : 15pm – 04 : 15pm 04 : 30pm – 05 : 30pm

Meet the press: outside views of the Asian gaming market The Chinese consumer: the burgeoning middle class Conference luncheon Show me the money: CFO roundtable Gaming technology innovations, part 1: traditional tables and electronic games Gaming technology innovations, part 2: CRM/tracking systems, social games, iGaming and beyond

Day 3 Thursday, May 23 09 : 30am – 10 : 30am 10 : 45am – 11 : 45am 12 : 00pm – 01 : 00pm

VIP versus premium mass market: growing a healthy mix Building a brand: what’s in a name? Mining the baccarat bonanza: a baccarat master speaks

Gaming management certificate programme Thursday, May 23 09 : 30am – 10 : 45am 11 : 00am – 12 : 15pm 11 : 00am – 12 : 15pm 01 : 45pm – 03 : 00pm 01 : 45pm – 03 : 00pm 03 : 15pm – 04 : 30pm 04 : 30pm – 05 : 00pm MAY 2013

): The three Chinese characters that drive Macau’s gaming success Yu le chang ( Asian approach: how do gaming and hospitality change on the Pacific Rim? (introductory track) Power play: customer loyalty and segmentation of players (advanced track) The people question: managing human resources in integrated resorts (introductory track) Getting the edge: strategic management for casinos (advanced track) Social media and word-of-mouth: practical applications of research on hospitality and gaming in Asia Certificate presentation and group photo

MAY 2013

Full hand

What to see and who to listen to at this year’s G2E Asia very year, G2E Asia brings the top industry players and brands to Macau, to participate in the largest trade show and conference event in Asian gaming. This year, organisers are forecasting to welcome an estimated 6,500 attendees and 150 exhibitors and brands. As of mid-last month, over 6,700 square metres of exhibit hall space had been sold – an increase of 15 percent compared with last year’s event. These 2013 sales figures included 27 new exhibitors, according to the organisers. Returning participants will notice some changes. After collecting feedback from exhibitors and attendees last year, G2E Asia organisers have revamped the show floor layout, to make it is easier to navigate and provide better sightlines. Also new at G2E Asia 2013 is G2E TV, which will stream live interviews and full reviews of each day on the MAY 2013

show’s official website, and via the new G2E Asia mobile app, G2E Asia Mobile. The app, available for Android and iPhone platforms, provides participants with portable, one-click access to the latest G2E Asia 2013 news. It also allows participants to browse conference sessions, search for exhibitors and view the full schedule of events.

VIP buyers G2E Asia will again feature pavilions to highlight iGaming and security and surveillance, two of the gaming industry’s fastest growing sectors. The security and surveillance pavilion will host workshops in theatres on the show floor, during which industry professionals can learn about new product innovations. Among the featured security and surveillance products will be CCTV, access control, monitoring, video systems, alarms and security software.

On top of that, G2E Asia includes a wealth of networking activities, aside from the official welcome reception, on May 22. On the morning of May 23, the Global Gaming Women Breakfast will feature a roundtable discussion by female industry leaders. These top executives will discuss how they have established themselves in gaming and provide in-depth discussions about the role of women in the industry. Global Gaming Women is a development programme launched by the American Gaming Association to nurture emerging female leaders in the international gaming industry. The initiative is an on-going effort by the association to foster stronger relationships between top female executives and promising managers. Also on May 23, there will be a networking luncheon for slots and table game operators and suppliers.

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This year, the organisers have introduced a new VIP programme to G2E Asia, called “Players Club”. It targets key buyers and decisionmakers from Asia’s top casinos, hotel properties and cruises. The invitationonly programme provides senior-level executives with exclusive VIP privileges and amenities. Around 250 industry leaders have been invited to join, according to the organisers.

Top-notch seminars A three-day conference programme complements G2E Asia’s show floor. The scheduled sessions explore some of the most important topics in global gaming today. Unlike last year, the conference programme won’t be divided into two tracks, for senior and middle management respectively. All panels will run with simultaneous interpretation services in both English and Chinese. Day One (May 21) starts with an overview of the Asian gaming market, covering its latest developments. It will be followed by a session on Manila’s Entertainment City, with the participation of Cristino Naguiat, the head of state-owned gaming company and regulator Philippine Amusement MAY 2013

and Gaming Corp, or Pagcor. The first day will also include seminars on Taiwan’s plans for offshore casinos, Cotai’s latest gaming developments, and on Hengqin Island and its potential role in Macau’s tourism and gaming sectors. Day Two of the conference programme kicks off with a panel gathering several journalists who cover the Asian gaming sector, followed by a session on the mainland’s burgeoning middle class. One of the highlights of the day will be the roundtable bringing together the chief financial officers of four Macaubased gaming operators: Sands China Ltd, Galaxy Entertainment Group Ltd, MGM China Holdings Ltd and SJM Holdings Ltd. They will discuss issues that impact the financial success of their properties, from the economic environment in the mainland to labour shortages and the regulatory environment.

Healthy mix The second day will end with two sessions on gaming technology. The first focuses on traditional table and electronic games, while the second covers tracking systems, social games and iGaming.

The final day starts with a debate on the challenges of growing a healthy mix between the VIP and premium mass-market segments in Macau. Experts will discuss the facts behind why the growth of the mass-market segment has overtaken that of the VIP market, and the impact of this change to operations, revenue and future marketing. The day will also include sessions on casino brand value and on the popularity of baccarat. In addition to the three-day conference programme, G2E Asia is again offering a gaming management certificate programme. The full-day course is produced in partnership with the University of Macau and the Singapore campus of the University of Nevada, Las Vegas. It targets new and mid-level casino managers, and will be divided into two tracks. In the morning, participants will discuss Macau’s gaming success, the influence of gaming and hospitality on the Pacific Rim, and how best to segment and retain loyal customers. The afternoon sessions will hone in on human resource and strategic management matters, together with practical applications of research into hospitality and gaming in Asia.

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Changing of the guard This year’s G2E Asia will be Frank Fahrenkopf’s last as the head of the American Gaming Association regulatory issues. The organisation also develops educational and advocacy programmes. Mr Fahrenkopf will be retained as a consultant to assist with the transition through at least to the end of this year. He has a number of other plans: “I am going to be teaching politics at one of the universities either in Washington or in Boston, on part-time basis; I am going to be doing some consultancy to companies in the industry; and I am going to be doing some writing.” This will be the first leadership change for the American Gaming Association since its inception in 1995. Mr Fahrenkopf has been the first and only chief executive of the organisation.

A legitimate business

Frank Fahrenkopf

rank Fahrenkopf is one of the most familiar faces of G2E Asia. He is the president and chief executive of the American Gaming Association, which coorganises the event with Reed Exhibitions. But he is stepping down at the end of next month, after more than 17 years heading the association. The veteran industry leader says the growth of G2E Asia has been “tremendous”, since it debuted at Macau Tower in 2007. “We could not be more pleased with how the show has progressed.” MAY 2013

The American Gaming Association and Reed Exhibitions also organise G2E in Las Vegas, the older sister event of G2E Asia. Geoff Freeman will replace Mr Fahrenkopf at the helm of the American Gaming Association. Mr Freeman joins the organisation after seven years at the U.S. Travel Association, most recently serving as executive vice president and chief operating officer. The American Gaming Association represents the commercial casino industry in the United States, addressing federal legislative and

He is often asked how the association will cope without him. “I always like to quote former French President Charles de Gaulle, who once said that the graveyards of France are filled with indispensable men,” Mr Fahrenkopf says. “I am sure the American Gaming Association will go on just fine.” Mr Fahrenkopf says heading the organisation “has been a wonderful ride”, with some “dramatic changes” along the way. He notes that when the association was created, the public perception of the gaming industry was very negative. “It wasn’t funny at the time, but about one month after I opened the American Gaming Association offices, the movie ‘Casino’ came out. That movie told about the underworld controlling Las Vegas, the mobs and all that stuff,” he recalls. “One of my first jobs was to change the public perception of the gaming industry across the United States.” While the task “is not completed”, Mr Fahrenkopf says that the great expansion of gaming across the United States means legislators and the general population have altered their view of the industry. “They see it as a legitimate business, that provides good jobs and generates significant tax revenue.”

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The boom of gaming in Macau caught Mr Fahrenkopf by surprise. “I doubt that there were many people in the early 2000s that felt that Macau would grow as rapidly as it did,” he says. The city’s success has prompted other Asian jurisdictions to consider legalising or expanding gaming. Mr Fahrenkopf says that won’t hurt Macau, like the opening of casinos in Atlantic City was not harmful to Las Vegas. “What Las Vegas has, and what Macau has, is a concentration of a large number of casinos with different ‘flavours’,” he says. This makes

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Frank Fahrenkopf steps down from the American Gaming Association without being able to push for the approval of a federal law regulating online gaming

visiting either of the two cities a more appealing experience in comparison with other regional markets.

Respect for Asian boom Mr Fahrenkopf says the cooperation between the U.S. state gaming regulators and their Macau counterpart, the Gaming Inspection and Coordination Bureau, has been very amicable. “That doesn’t mean there are not problems that sometimes develop.” He adds there is a third element that comes in play, which is the federal government and legislation like the Foreign Corrupt Practices Act. “We sometimes try to overrule what is being done in countries where they [federal government] think the U.S. law may not be followed. That is not unusual: every time you take two different cultures, you are going to have some rough spots,” Mr Fahrenkopf says. “But I don’t think there is any question that people in the gaming industry in the United States have tremendous respect for what has happened in Asia, not only in Macau.” Mr Fahrenkopf says one of his biggest achievements at the American Gaming Association was the establishment of the National Centre for Responsible Gaming. He stresses the centre’s work has demystified several misconceptions about compulsive gaming. He also helped establish the Global Gaming Women programme, run by the American Gaming Association. It aims to increase the number of female executives in the industry. “If you look at the number of women who are in a position of authority in the major companies in the world, you have to look long and hard to find many,” Mr Fahrenkopf says. He steps down from the American Gaming Association without being able to push for the approval of a federal law regulating online gaming. “If federal legislation is not passed, I think we will go state by state with online gaming legislation. You will have the largest gaming expansion in the history of United States, without real consumer protection.” Looking to the future of the industry, Mr Fahrenkopf says “the social media area is the big unknown”. He will make sure to keep tabs on it.

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First-mover advantage Aristocrat was one of the first slot machine suppliers to introduce games with an Asian appeal

ustralian-based Aristocrat Leisure Ltd was on the frontline of slot machine providers investing in an Asian-dedicated game portfolio, shortly after the Macau gaming market was liberalised. The company is now reaping the benefits. “We don’t comment directly on market share, but Aristocrat is proud to be the market leader in Macau and across the Asia Pacific,” says Nathan Drane, regional marketing manager. “[The company] is very committed to maintaining this position and creating products that are world class and regionally relevant.” He says Aristocrat recognised immediately upon entering the Macau market in 2004, that it needed to develop Asian-themed games. “When we first started reviewing the market opportunities prior to Sands Macao opening, there was a definite focus on making more specific Asianthemed games for the type of players that were coming to Macau,” Mr Drane explains. “The unique requirements of both players and customers led to a more flexible product offering from Aristocrat in terms of configurations such as Hyperlink jackpots and more relevant themes to the cultural preferences.” Hyperlink is a patented linked progressive gaming product developed by Aristocrat. The distinguishing feature of Hyperlink is that when the jackpot is triggered, players move into a second screen feature to determine what level of the jackpot is won. Mr Drane says the early success of the ‘Choy Sun Doa’ game in the Asia Pacific saw Aristocrat leverage its patents to create a portfolio of regionally targeted volatile Reel Power games. Among those were ‘5 Dragons’, ‘Fortune King’, ‘5 Koi’ and ‘5 Bats’. The ‘Fa Fa Fa’ Hyperlink is arguably Aristocrat’s most successful Asian-themed product. It is based MAY 2013

“Aristocrat is proud to be the market leader in Macau and across the Asia Pacific,” says Nathan Drane, regional marketing manager. “[The company] is very committed to maintaining this position and creating products that are world class and regionally relevant” on a character that represents Good Fortune. There are over 800 units installed in Macau and 1,000-plus more throughout the Asia Pacific.

Know your player Last year, Aristocrat’s most successful product launch in Macau was the

Hyperlink ‘Dragons on the Lake’. “Aristocrat’s Asian games portfolio has been created to provide a variety of themes for different players, cultures and markets ranging from animals to auspiciousness, luck and wealth,” Mr Drane notes. The company keeps evolving its Asian approach as new markets in the region develop and more data on players becomes available. “Aristocrat has identified the increasing need to cater for the Philippines market as it emerges as a key market in Asia,” Mr Drane says. The slot machine supplier will showcase its first Philippines-based link progressive product at G2E Asia 2013. Aristocrat was one of the companies chosen to supply slot machines to Solaire Resort Casino, in Manila, which opened in March. The company’s products will also be on the gaming floors at Ho Tram Beach casino resort, in Vietnam, forecast to open later this year. Mr Drane says that to develop Asian-themed games, Aristocrat works closely with gaming companies on player preferences. “Aristocrat has regular contact with almost all casinos and slot-installation operators across Asia,” he says. “Further to this, we actively have our product marketing team reviewing trends and conducting more detailed discussions with operators on insights for future developments.” Mr Drane stresses however that many Western-style themes cross cultures. They also resonate with Asian players. Aristocrat is celebrating its 60th anniversary this year. The company produced its first gaming machine, the Clubman, in 1953. It opened a Macau office in 2006 – the city is the cornerstone of its regional operations in Asia.

Creating legends

See the next generation of Aristocrat products at G2E Asia ristocrat Leisure Ltd will exhibit an array of new games and products at G2E Asia. The Australian-based company says it wants to reaffirm its commitment to Asia, supporting clients with dedicated content specifically for this region. The gaming supplier will be unveiling two new additions to the ‘Legends’ series of games: ‘50 Dragons Deluxe’ and ‘Fortune King Deluxe’. The ‘Legends’ titles leverage the strongest gaming titles from Aristocrat. The series extends them with new features, enhanced gameplay and graphics. ‘Fortune King Deluxe’ will bring back ‘Fortune King’ with two new features: bonus free games and enhanced graphics. ‘50 Dragons Deluxe’ extends on the classic ‘50 Dragons’ game for the first time, with revamped graphics and sounds, and a new ‘choose your volatility’ feature. Aristocrat introduced the ‘Legends’ series in 2011 with ‘5 Dragons Legends’. It continued the series with ‘5 Koi Legends’, introduced last year. At G2E Asia, the company will

also showcase On Demand, its new downloadable tool that gives casinos the power to better manage slot content, with just a click of a button. Aristocrat will feature its first dual language games in downloadable format at the trade show. Last year, the gaming supplier launched ‘Wonder 4’ allowing players to select up to four games and play concurrent sets of reels. This year, it presents ‘Wonder 4 Stars’, a product developed with the benefit of customer feedback at G2E Asia 2012 and tailored specifically to the Asia Pacific region. It combines the ‘Wonder 4’ multi-play feature with two of Aristocrat’s bestknown games in Asia: ‘5 Dragons’ and ‘50 Lions’.

Cash train Aristocrat will also display the new ‘Cash Express Gold Class’. This is the next evolution of the global ‘Cash Express’ brand. ‘Gold Class’ is rolling in with a brand-new look, complete with train-engine signage packaging. Launch games include ‘Fortune King’, ‘5 Dragons’ and ‘50 Lions’.

Also featured at G2E Asia, More Power takes Aristocrat’s own Reel Power-style games to the next level, with the ability to unlock extra ways to win. The first three More Power games all have the ability to move from a 243way to win (3x5 reels) to 1,024 ways to win (4x5 reels), then up to 3,125 ways to win (5x5 reels) during the free games. Launch games include ‘Kings Dynasty’, ‘Moon Drifter’ and ‘Phoenix Riches’. ‘Dragons on the Lake’, which has been built for the Asia Pacific utilising customer input, will also be showcased at G2E Asia. This Hyperlink 2.0 product includes a new jackpot feature based on ‘5 Dragons’. For the first time in a Hyperlink, the jackpot feature will be symbol-triggered, coupled with a ‘choose your volatility’ jackpot feature. This allows players to target which jackpot they wish to play for. Four games will be available at G2E Asia under ‘Dragons on the Lake’, with ‘5 Dragons Deluxe’, ‘Choy Sun Doa’, ‘Fortune King’ already approved, and ‘5 Koi Deluxe’ coming soon. Aristocrat will be located at booth 417. MAY 2013

Made to fit

IGT is featuring its latest tailor-made products for the Asian market at G2E Asia nternational Game Technology Inc (IGT) is inviting all attendees to G2E Asia to experience its growing line-up of Asian-attuned gaming products. These range from ‘MegaJackpots Game Changers’ such as the ‘Great Zodiac Race’, to new slot machine games designed for Asian playing styles, such as ‘Money Idol’, ‘Fire Pearl’ and ‘Silk Seduction’. “IGT has been investing heavily in Asia with new people, a new approach, and games and systems which are tailored specifically for operator and player demands,” a spokesperson says. “This has been received very well by the market, with positive indicators from our customer base.” The U.S.-based company will showcase several of its latest casino management tools at G2E Asia. They include the IGT Advantage suite and the Casinolink solution, which links all gaming devices into one comprehensive system for slots, tables, cage,

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marketing, jackpots and bonusing. IGT will also display its sbX serverbased gaming solution. Given that Asia is predominantly a table game market, the company says it is investing in the localisation of its table management products. Among the latest developments is a rebates and commissions application, designed to incentivise and manage junket promoters.

Bringing value Another key product in this strategy is IGT’s Table Manager. It is a fully automated system that maximises comping accuracy, increases productivity and delivers unique promotions to table players. When combined with radio frequency identification (RFID) chip tracking and image-based card recognition technology, information such as average bet, actual and theoretical win and more is automatically recorded. And that is not all. IGT is soon set to launch its Lucky Chip solution. It

creates jackpot promotions specifically for table games players. The company says Lucky Chip can help increase carded table game play while making player club membership more valuable for punters. In addition, IGT will showcase some of its international ‘MegaJackpots’ blockbusters at G2E Asia, like its ‘CSI: Crime Scene Investigation’-themed video slots. These feature characters and clips from the popular American crime drama television series. IGT’s ‘Takes the Cake’ slot machine game, a spin-off of the popular ‘Candy Bars’ game, will have its debut at G2E Asia. IGT Video Reel Edge slot titles such as ‘Tully’s Treasure Hunt’ will also be on display. Although interactive opportunities are currently limited in Asia, IGT Interactive will show how it can bring seamless gaming experiences to players across all devices, from online to mobile. The IGT exhibit is located at booth 835.

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High expectations

The Asia Pacific market remains a key focus for Bally ally Technologies Inc’s top executives are bullish about the outcome of this year’s G2E Asia for the U.S.-based gaming supplier. “We have high expectations for G2E Asia,” says Srini Raghavan, Bally’s senior vice president for the Asia Pacific and Africa regions, and managing director of Bally India. “The show is the world’s premier Asian casino event and draws the largest regional base of casino executives. Each year we look forward to networking and meeting with our valuable casino partners in the region, and showcasing our latest technologies.” Kurt Gissane, Bally’s senior director and managing director for Asia Pacific, says the company is particularly excited to showcase an array of new game content specifically produced for the Asia Pacific market. “We have focused on creating a new portfolio of dual-language English/Chinese video titles with rich graphics and rewarding bonuses,” he says. The company has a gamedevelopment studio in Asia Pacific focused solely on delivering content that appeals to players in the region. This is part of the company’s overall strategy to grow its market share in this part of the world. “We will continue to build and maintain strong partnerships with casino operators in the region, and focus on delivering market-specific game content that provides casino operators with a strong return-oninvestment,” Mr Raghavan says. The Asia Pacific market remains a key focus for the company. Due to Macau’s boom and, more recently, Singapore’s success, other countries in the region are reviewing their laws and considering expansion. Bally expects this will provide it with new business opportunities. MAY 2013

Gaming expansion in the Philippines is “particularly exciting”, says Mr Raghavan.

Systematic growth

“We have high expectations for G2E Asia,” says Srini Raghavan, Bally’s senior vice president for Asia Pacific

“We have focused on creating a new portfolio of dual-language video titles,” says Kurt Gissane, managing director for Asia Pacific

“We are preparing to release an impressive array of new game titles,” says Ramesh Srinivasan, Bally’s CEO

Bally continues to grow worldwide. Last month, the company announced record quarterly revenue of US$259 million (MOP2.1 billion) for the first quarter of this year, up 13 percent year-on-year. “This record quarter continues to mark a historic period of sustained operating improvement and success, which is shaping up to meaningfully continue for the foreseeable future,” says Ramesh Srinivasan, the company’s president and chief executive. “We are also preparing to release an impressive array of new for-sale game titles developed by our game studios and third-party development partners,” he adds. Bally invests around 11 percent of its total revenues in research and development. In the first quarter of 2013, systems business was Bally’s operational segment that grew the most. Revenue increased 26 percent year-on-year to a quarterly record of US$71 million. “The spate of major global systems installations and significant upgrades, the latter at the rate of more than one per week, continue to bring a new operational and marketing dimension to many casino floors,” says Mr Srinivasan. He explains this also provides Bally with “a solid strategic base for crucial future integration” with the company’s mobile and iGaming platform initiatives. Meanwhile, Bally continues to collect awards and gaming records. Last month, the company partnered with U.S. casino Mohegan Sun to set new world records for the ‘Largest Slot Machine Tournament’, with over 3,000 participants, and ‘Most Slot Machines Running the Same Game Simultaneously’, with 1,600 units.

The right flavour

Bally’s exhibit at G2E Asia features several games catering to the Chinese market testament to Bally Technologies Inc’s commitment to delivering products designed for the Asian market, the U.S.-based company will exhibit a large number of Asian-flavoured game titles at G2E Asia 2013. These games feature Asianthemed graphics and symbols, along with player-favourite features such as free games and stacked wilds. But most importantly, they include player-selectable duallanguage English/Chinese to meet the demands of the Asia Pacific market. Visitors to Bally’s booth should look for ‘Zhi Nu’, the first of four romantic-landscape novel games linked to a progressive multijackpot. It is based on the Chinese tale of ‘The Weaver Girl and the Cowherd’. Available on Bally’s Pro Series V32 platform, ‘Zhi Nu’ is a five-reel, 50-line game sparked by three free game triggers scattered anywhere on the middle three reels. In ‘Chinese Zodiac’, a new video slot for the Pro Series V22/22 Upright and V22/26 Slant cabinets, players can choose their favourite zodiac symbol and lock the wilds. For Bally’s upright and slant cabinets, other Chinese language games on display at G2E Asia will include ‘China River’, ‘Fantastic 8’, ‘Red Phoenix’, ‘Perfect 8’, ‘Shadow Diamond’, ‘White Lion’, ‘Heavenly Empress’ and ‘Pharaoh’s Dream’. ‘Star Signs’, ‘Zodiac Fortune’, ‘Joy of Samba’ and ‘Koi Treasure’ will be on display for visitors on Bally’s award-winning Pro Curve cabinet, featuring the industry’s

only curved LCD to emulate spinning reels on a video slot.

Need for speed Also featured at the trade show will be Bally’s ‘Nascar’ video slots. This new brand brings the thrill of racing to any casino floor and features a line-up of famous racecar drivers. ‘Nascar’ is delivered on Bally’s Alpha 2 Pro Series V22/32 cabinet with a near-area progressive jackpot award. In addition, G2E Asia participants should look for ‘Cash Wizard Tiki Magic’, the follow-up game to the successful ‘Cash Wizard’. On the systems side, gaming operators will be able to experience live demonstrations of Bally’s Elite Bonusing Suite. Casinos can use this solution to add excitement across their iView network using player-centric, real-time interactive promotions such as Virtual Racing, U-Spin Bonusing, DM Tournaments and Virtual Racing Nascar. The Elite Bonusing Suite applications deliver floor-wide, personalised promotions, secondchance-to-win events, and the ability for players to earn rewards, all without interrupting play on the base game. Bally says these features can help increase coin-in, carded play, new card sign-ups and time on device. The Bally Mobile team will also be on hand to give live demonstrations of the company’s cloud-based custom mobile concierge apps and mobile websites for casino patrons, and internal-facing apps for casino employees. Bally’s products will be on display in booth 235. MAY 2013

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Galactic solutions From slot games to casino management products, Spielo International brings it on at G2E Asia pielo International’s showing at G2E Asia will feature new slot games and its latest Diversity multigame suites. On the casino systems side, the spotlight will be on the company’s Galaxis modules, as well as the System2go solution for multi-site slot operations. Spielo’s casino systems increased their market penetration in Asia “by nearly 300 percent in 2012,” a spokesperson says. “And 2013 continues to match that growth in a wide range of gaming venues, from large resort-style properties to smaller gaming halls.” At G2E Asia, Spielo will introduce three new slot games, based on internationally recognised PopCap franchises. These include ‘Plants vs. Zombies: Gargantuar’, ‘Zuma’ and ‘Bejeweled’. PopCap Games is a global leader in mobile and social games and a division of Electronic Arts Inc. The spotlight will be also on Diversity’s latest multigame suites, ‘Absolute Azure’ and ‘Sweet Sunshine’.

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Each suite features 10 games, grouped in categories, which can be selected by players through the touchscreen. Spielo core games to be featured at G2E Asia include ‘Mayan Magic’, ‘Treasure Blast’, ‘Master Roulette’, ‘1421 – Voyages of Zheng He’, ‘Stardust’, ‘Glorious King’, ‘Wild Flower’ and ‘Moving Moments’.

Management boost On the casino systems side, Spielo will showcase its entire Galaxis portfolio of casino systems solutions for slot and table operations. Special focus will be on Galaxis Bonusing, offering a wide choice of bonusing options, including points bonusing and jackpot bonusing features. It can be applied to a single machine, a bank of machines or across the entire gaming floor. Galaxis Analytics, a new module for advanced gaming analytics, will be featured for the first time at G2E Asia. It includes gameViz, a powerful analytics visualisation tool that lets casino operators directly query the data held

in the Galaxis data store. It allows operators to visualise floor gaming activity, enabling them to identify ways to improve business profitability. Galaxis portfolio of casino systems solutions features a total of nine modules, with solutions and applications that manage operations across every area of the casino. Other modules to watch out for at G2E Asia include Galaxis Slots, Galaxis Tables and Galaxis Jackpots. Spielo will also feature its System2go solution, a multi-site slot floor management system with fully automated accounting and reporting from any remote location with Internet access. It includes a jackpots system, as well as optional ticket-in/ticket out (TITO), card cashless payment, player tracking, and point redemption functionalities. System2go can be managed through cloud computing as a turnkey solution. The Spielo team will be welcoming customers at its distributor RGB’s booth 213.

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Constant expansion SHFL Entertainment celebrates its 30th anniversary with promises of more innovation hirty years have passed since SHFL Entertainment Inc, formerly known as Shuffle Master Inc, started as a card shuffler maker. Three decades later, the U.S.-based company is still focused on continuously innovating and diversifying its product portfolio. “It’s fair to say that over those 30 years, shufflers have evolved substantially,” SHFL’s executive vicepresident for Asia, Ken Jolly, says. He explains there are now different types of shufflers, to meet different requirements of the gaming industry. Similarly, SHFL has evolved to meet new market demands from casino operators. Product diversification has been the main strategy for the company in recent years, Mr Jolly says. The firm has added new categories to its portfolio, on top of the utility product line; it now offers proprietary table games, electronic table systems, slot machines and iGaming. “SHFL Entertainment is the most diverse product company in the business,” he says. The company dominates the Macau market in the utility products segment. “We are growing in the slots and we are strong in the live table games,” Mr Jolly adds. Recently, the company hit the jackpot with its ‘Duo Fu Duo Cai’ progressive link. “It is a success here and now we have it in the Philippines and Cambodia, where the numbers are again extraordinary,” he says.

Regional growth The Macau market is important for SHFL, but so is the overall Asian market. “We’ve been growing in Asia for the last couple of years. We expect that, with our new products and innovations, we will continue growing,” Mr Jolly says. SHFL is expanding to the Philippines. Mr Jolly says the company has supplied slots, utility products and table games to Solaire Resort Casino in Manila, which opened in March. MAY 2013

“We’ve been growing in Asia for the last couple of years. We expect that, with our new products and innovations, we will continue growing,” says SHFL’s executive vice-president for Asia, Ken Jolly SHFL is at the final stage of opening an office in Manila, which is expected to take place this month, he says. In addition, the firm is providing slots to the Ho Tram Beach casino resort in Vietnam, to open later this year. “We’re also getting growth in Singapore and we’ll continue to mature that market. The Cambodian and Indian markets are also increasing,” Mr Jolly says. During the quarter ended January 31, SHFL’s total revenue increased five percent year-on-year to US$58.8 million (MOP470 million). The growth was mainly pushed by the utility and proprietary table games segments, the company said. According to SHFL’s chief executive, Gavin Isaacs, the results were positively influenced by the

company’s “continued strong performance in Asia”, where it posted healthy increases in shuffler sales. In Macau, SHFL is entangled in a longstanding legal battle with Macaubased gaming supplier LT Game Ltd regarding the right to market its Rapid Baccarat product. The issue first arose during the 2009 G2E Asia gaming show, when LT Game claimed that SHFL’s Rapid Baccarat product infringed on one of its patents for multi-terminal systems combining electronic betting with a live dealer and live baccarat. The dispute flared up again during last year’s G2E Asia. Asked if SHFL will display its Rapid Baccarat product at this year’s G2E Asia, Mr Jolly declined to answer. The company disputes any infringement.

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Diverse range Boasting one of the most eclectic offerings in G2E Asia, SHFL wants to impress HFL Entertainment Inc says it is committed to making gaming more fun for players and more profitable for operators, through product innovation, and superior quality and service. At G2E Asia, the company will feature products from each of its five product categories – iGaming, utilities, proprietary table games, electronic table systems and slot machines. The U.S.-based firm started a new chapter in its history in October last year, with a change of name from Shuffle Master Inc to SHFL. “With the most diverse product range in gaming, our new brand and new logo reflect our company’s evolution to be the best at what we do,” a spokesperson says. “Since this is the first show we’re stepping out in Asia as SHFL, and on the back of some great successes over the past year, we’re really looking forward to G2E Asia 2013.” At the trade show, the company will be showcasing its latest utility offerings. Among these is the ChipStar roulette chip-sorting machine. It features the latest SHFL technology to deliver a smooth, efficient and accurate chip sorting process.

Shuffling kings Also on display will be the Deckmate2 card shuffler. This state-of-the-art poker shuffler offers significant performance

and security improvements over its predecessor, the DeckMate, which has been a staple in the market for over 10 years. The DeckMate 2 boasts a shuffle time of 22 seconds, which is twice as fast as the original, and increases game security and integrity through built-in optical card recognition. Both

wear on cards and the need for shuffler maintenance are reduced due to an innovative new shuffling method. The company will also display its Rapid Fusion product range, which combines a live or virtual dealer with a touch screen betting interface, resulting in enhanced game security and increased productivity for casino operators. Rapid Fusion allows for concurrent play of four games at the same time (e.g. two baccarat, one sic bo, one roulette; or three roulette, one baccarat). SHFL will have several slot titles on display at its booth. The company will be unveiling a new VIP standalone progressive, ‘88 Fortunes’, which takes the success of ‘Duo Fu Duo Cai’ into the VIP and high limit slot areas. It will also display an array of specialty games and progressive technology, including new table games, side bets and wide area jackpots. SHFL’s products will be on exhibit at booth 801. MAY 2013

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Goliath offering

Konami has a lot to show at this year’s G2E Asia onami Gaming Inc brings its latest offering of cabinets, video platforms and games to G2E Asia, plus its newest casino management system, Synkros. The Las Vegas-based company is raising its bet on the Asian market. Konami recently established a branch office in Singapore as part of its growth strategy to focus on emerging markets in the region, including Singapore and Macau. Konami will be unveiling its Podium Goliath cabinet for the first time in Southeast Asia during G2E Asia. It is a larger version of the Podium, one of Konami’s most popular video cabinets. “Since its introduction, Podium has been a proven performer,” says Steve Sutherland, chief operating officer at Konami. “Based on feedback from our customers, we have expanded our line of Podium products by creating the largest Podium yet. Goliath was designed to support our robust game library and provide a unique and fun gaming experience for slot players.” The Podium Goliath stands over 2.3 metres tall and features dual 32” high definition LCD displays, plus enhanced sound and lighting systems. It supports Konami’s K2V and KP3 library, including standalone progressives. KP3 is Konami’s latest video platform on the Podium cabinet. It features 3D interfaces and enhanced graphics. KP3 has a higher power MAY 2013

CPU that provides extra flexibility in creative game design. It offers interactive skill-based games that allow players to impact the amount of credits won. Konami will showcase several KP3 game titles at G2E Asia.

True fun On the four-level linked progressive offering, the star will likely be ‘Dragon’s

Victory’. Compatible with most KP3 game titles, it is a clone of Konami’s popular progressive game ‘Pirate’s Loot’. ‘Dragon’s Victory’ features a fire-breathing dragon. The dragon will appear when the progressive is randomly triggered. During the progressive game, 12 pearls will be displayed. The dragon will randomly

select a pearl to uncover a coloured medallion. Once three same coloured medallions are uncovered, the corresponding progressive level is awarded. Synkros is the evolution of the Konami Casino Management System. It is best known for its advanced capabilities of real-time analysis, reliability and innovative marketing tools. It offers True Time Tournaments, a unique approach for systemdelivered community gaming. True-Time Tournaments allows casino operators to configure on-demand slot tournaments. It includes a tournament director module designed to manage the operational functions of the tournament (i.e. monitoring players, leader board management, tournament start and end times). Player invitations to the tournaments are managed through the True-Time Bonusing Toolkit and are issued based on criteria defined by the casino, including but not limited to the amount wagered, specific games, day of the week, new card signup, card tier status or trip frequency. Synkros also features SuperSeries, a multi-level, multi-themed, floor wide bonusing tool. SuperSeries was designed to increase time-on-device, visitation rates and player card signups. Konami’s portfolio of games and system solutions products will be available at booth 1119.

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Continuous growth

TCS John Huxley is set to impress at G2E Asia as it expands in Asia CS John Huxley will be showcasing a full range of innovative products at G2E Asia. The Asian market is becoming increasingly more valuable to the London-headquartered company. “Asia is an extremely important market to us. We continue to grow our market share in Macau, Singapore and Malaysia. With new markets in the Philippines and Vietnam opening up, we are excited about the future,” a spokesperson says. Earlier this year, the company supplied 295 custom designed tables to Solaire Resort Casino, in Manila. TCS John Huxley also supplied all the table layouts and electronic displays, plus all metal and acrylic table accessories. In addition, the company is providing gaming products to the Ho Tram Beach casino resort, in Vietnam, forecast to open later this year. In Macau, TCS John Huxley’s business “continues to grow steadily,” the spokesperson says. “We aim to continue to attract the best talent we

can in sales, service and support to meet the market requirements.”

Quality commitment At G2E Asia, the company will be showing its Gaming Floor Live product, a real-time game optimisation tool designed to maximise profitability. It achieves this by monitoring in real time the turnover on each game, the speed of play and the number of players per table, among other criteria. The data collected is processed using a special algorithm, enabling operators to determine the most profitable game configuration. Gaming Floor Live is available across Baccarat, Sic Bo and Roulette games. Also on display will be TCS John Huxley’s Supernova Table Bonus System. It delivers floor wide progressive and game bonusing to all live table games. The company also brings its Xia Tablet to G2E Asia. This server-based roulette solution allows punters to play

live roulette tables on a touch screen tablet device throughout a gaming venue. TCS John Huxley’s continued commitment to product development will be highlighted with the launch of some new regionally inspired games. ‘Sic Bo Blaze’ is the first of these, featuring the company’s latest gaming surface technology. Game animations are projected through a traditional gaming layout, which brings added excitement to the game and helps to make tables stand out on the gaming floor. Blaze gaming surface technology will be rolled out in the coming year to cover a variety of table games. Also on display will be a number e-FX and Omni displays, and the CC2 chip sorting machine, featuring a new 43mm chip sorting capability. On top of this, TCS John Huxley will showcase an array of other gaming products, from gaming tables to roulette wheels. The TCS John Huxley exhibit will be located at booth 549. MAY 2013

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Window to the world LT Game wants to use G2E Asia to boost its brand awareness in the region lready with a sizeable footprint in the Macau gaming market, LT Game Ltd aims to use G2E Asia to promote its technology to potential overseas customers. The goal is to increase its brand awareness in the global gaming industry. Although the Macau-based electronic gaming systems supplier also offers card shoes, jackpot systems and casino management systems, its main strength is its

Live Multi Game System. It uses live dealers and terminal-based multigame selection features, supporting concurrent games. LT Game says its Live Multi Game System is the only patented multi-terminal system in Macau that combines electronic betting with a live dealer and live baccarat. Baccarat is the cityâ&#x20AC;&#x2122;s most popular game. Unlike a conventional table, which seats an average of about

eight players, the system can have more than 100 players betting simultaneously on one or more games, in stadium-style facilities. The games are dealt in real time on live tables, with the action transmitted by video camera to large overhead monitors. Punters make their wagers on electronic betting terminals, where they can also keep up with the live action. LT Gameâ&#x20AC;&#x2122;s system allows a terminal to be used to bet simultaneously on different live games, including Baccarat, Blackjack, Sic Bo and Roulette.

Human element

The company offers the product in two different types of cabinets. Both are purposely designed for Baccarat. Players can use the extra armrest and writing space to write down their own trend analyses of outcomes, much like on a live Baccarat table. LT argues that the benefits of its Live Multi Game System are many. The company says the system is more efficient than a regular live table, while still preserving the dealer-player human interaction element. The game is quicker because the croupiers do not need to make payouts, and there is less room for human error. This increases productivity, with more hands dealt per hour, and also improves game security and reliability. The labour costs are reduced, because fewer croupiers are needed. LT Game says this kind of more anonymous and relaxed play can attract new players who would otherwise avoid table games, like women or novices. The Live Multi Game System also works as a marketing promotion tool. Casino operators can deliver all sorts of advertisements to players at the electronic terminals. It also allows for player membership tracking and lucky draws. In addition, food and beverages can be ordered right from the terminal. LT Game will be providing trials of its products at booth 502. MAY 2013

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Chip leader Product innovation defines GPI’s exhibit at G2E Asia aming Partners International Corp is featuring an array of new casino currency products and radio-frequency identification device (RFID) table game solutions at G2E Asia. “The demand for RFID products that can drive casino and table game performance continues to increase in the Asian gaming market,” a spokesperson says. Banking on that, GPI is expanding its RFID product portfolio. These new advancements add to the company’s already extensive suite of RFID solutions. One new RFID table game product GPI is displaying at G2E Asia is its RFID Tray Inventory Module (TIM), which can be utilised with any of the company’s RFID single or dual chip trays. The module is an optional application that works with GPI’s Chip Inventory System, to provide operators with real-time chip tray currency inventory monitoring, directly at the table. With critical time-saving functions like automated table openings and closings, and on-going inventory accounting that eliminates the need for periodic manual rack counts, TIM helps improve table game productivity, GPI says. It also provides casino management with on-going, accurate information about each chip tray’s balance and activity during dealer shifts, while reducing human error and game downtime. Another new RFID product that GPI will be featuring at G2E Asia is its RFID plaque box. With its ability to store and track up to 60 RFID plaques, the plaque box can be installed next to a regular chip tray. This new product enables secure protection of a casino’s highest value currency items, while delivering realtime counting and movement details.

Faster and better There is more coming out from GPI’s headquarters in Las Vegas. With poker’s popularity maintaining its foothold around the world and

gaining track in Asia, the company brings to G2E Asia its RFID poker solution. It combines an RFID chip tray, a touch-screen display and an RFID antenna that quickly reads and validates all chips being played. This fast pot scanning reduces game downtime caused by manual pot calculations, making it possible to generate additional rounds per hour. It also eliminates dealer errors by instantly calculating rakes. GPI’s RFID poker solution can enhance poker table management processes by providing the information necessary to maximise a poker room’s efficiency. For instance, it can be used to identify the most profitable hours of play.

GPI’s chips, plaques and jetons continue to be the casino currency of choice for many operators. At G2E Asia, the company will be showcasing its new plaque design capabilities. It will also introduce several new standard chip designs for its American-style B&G chips. GPI will also highlight other table game products in its portfolio. The company’s Paulson plastic cards offer the same high quality as GPI’s Paulson and Paulson PSV paper stock cards, with the added benefit of being able to withstand long repeated play. GPI’s custom furniture manufacturing capabilities will also be on display at the company’s exhibit, at booth 1105. MAY 2013

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Lord of the coupons FutureLogic presents its latest couponing solutions .S.- based FutureLogic Inc is bringing its latest promotional ticket printing and couponing products to G2E Asia. The company will be displaying its new Ticket2Go ticket-out solution. It offers a network-less ticket-out payment solution for machines that have a serial or parallel coin hopper, making it “the only ticket-out payment solution that works with both state-ofthe-art as well as legacy machines,” FutureLogic says. Multi-lingual and multi-currency, the Ticket2Go solution can be installed across multiple sites. It enables operators to replace coin payout technology with a simple ticket-based solution. With the addition of the Ticket2Go Cash Redemption Module, which can be integrated with any third-party cash redemption terminal, this offers a secure and automated solution for small to medium-sized operations or venues, says FutureLogic. At this year’s G2E Asia, the company will also showcase its PromoNet promotional couponing solution, already installed in 12 locations worldwide. The company will feature PromoNet Online, PromoNet’s newest module, linking land-based game-play with online promotions and rewards. FutureLogic says this is “critical for land-based operations currently considering their online strategy”.

The power of print Concurrently, FutureLogic will showcase its award-winning range of gaming printers at G2E Asia. Designed to keep pace with current – and future – demands of serverbased gaming, promotional couponing and the evolving “ticket in, ticket out” (TITO) market, FutureLogic’s GEN3 Evolution printer includes several unique features. It offers precision grayscale printing and advanced multiport architecture. FutureLogic says it is the fastest printer in the gaming industry, with MAY 2013

the largest memory storage capacity available in the market and room for 450 tickets. The GEN2 Universal family of printers builds on the technology that has made FutureLogic a leading supplier of TITO ticket printers for cashless gaming. Developed with design feedback from global gaming equipment manufacturers and casinos, these printers are compatible with existing gaming platforms as well as the next generation of downloadable, server-based and USB games. The CouponXpress desktop TITO coupon printer includes all of GEN2 Universal printers’ features, functions and flexibility. It takes TITO coupon printing from the gaming floor to the cashier’s cage, hotel front

desks, unattended kiosks and other transaction points. The innovative TableXchange device is designed to enable players to use cashout vouchers at table games. It connects table games to a casino’s existing TITO network by scanning and printing TITO vouchers. This technology creates a common currency across the casino. It also establishes a bridge between slot machines and tables, helping casinos identify valuable crossover players. The TableXchange device further streamlines casino operations by virtually eliminating the need to replenish chips at table games. Product demonstrations will be available at FutureLogic’s exhibit, at booth 829.

Hospitality Hospitality

Photo: Carmo Correia

110

Michel Molliet

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Savoir faire

The Sofitel Macau uses its French pedigree to make itself stand out in the hospitality market BY ALEXANDRA LAGES

f it is French, it sells in Macau and the mainland. And the five-star Sofitel Macau at Ponte 16 hotel intends to exploit its French pedigree more, to add to its bottom line. The hotel is holding more and more events with a French flavour, is offering a greater variety of French food and drink, and has opened a spa. It wants to become a byword for French luxury here, says general manager Michel Molliet. This is part of an effort by Sofitel to increase the value of its brand by claiming the status of the top French luxury hotel chain worldwide. It is focusing on service and image over the next couple of years. The chain is part of Accor SA, the world’s fourth-largest hotel group. The Sofitel Macau opened in August 2008. The hotel is the headquarters property of the brand in Greater China. It means to set the standard that all other Sofitels around the market must measure themselves against. “We wanted to choose a good hotel as a base,” says Mr Molliet, who is also vice-president of Sofitel Greater China. “This hotel is seen as a role model for our hotels. All the new systems, procedures and pilot projects are tested here first.” He says the occupancy rate is now over 90 percent, having increased at an average annual rate of between 10 percent and 15 percent in recent years. This is not only because hotels here in general have been doing better. “It’s not just the city that is growing overall in terms of volume of business, but we are also growing our share of the pie,” Mr Molliet says. “We are enjoying right now a very good market share and guest satisfaction.” The Sofitel chain only manages the hotel, which belongs to the Ponte 16 complex. Ponte 16 is a joint venture by gaming company SJM Holdings Ltd, which owns 51 percent, and Hong Kong’s Success Universe Group Ltd, which owns the rest.

Elegant touch The Sofitel Macau is in the Inner Harbour area, unlike most of the city’s other superior hotels, which are clustered in Cotai or in the vicinity of the Hotel Lisboa. Mr Molliet says this is not a problem. “We’ve found throughout the years that the location is not

a handicap at all. On the contrary, there are a lot of people who choose to come here because they like the location. It’s in walking distance from the whole city,” he says. This year, the Sofitel Macau is holding a string of cultural and gastronomic events to attract attention. That includes partnerships with the Alliance Française de Macau, the Consulate-General of France in Hong Kong and Macau, and the France Macau Business Association. “We want to get more people here, and these events are a way to achieve that,” Mr Molliet says. “One of the key strategies of the brand is to have a French DNA. We do that by focusing very strongly on some points related to French elegance, like the uniforms. Design, and food and beverage are also big components of the French touch, so we try to organise these activities.” The Sofitel Macau is adding facilities that are meant to emphasise its French flavour. Last year it opened a spa called So Spa. Next month it will open a gym called So Fit. The hotel has high hopes for its French restaurant, Privé, which opened last year. “That was a great contribution for the brand,” Mr Molliet says.

Human scale But “Frenchness” is not everything. Later this year the hotel will open a Cantonese restaurant. The moderate size of the property is an advantage in creating an aura of luxury, Mr Molliet says. The hotel has only 408 rooms. He says this makes it more “human-size and personalised” than the massive hotels in Cotai which have thousands of rooms. The moderate size of the Sofitel Macau also helps it retain staff, he says. This is an important consideration in a city that is short of suitable labour. Mr Molliet says a survey of his staff last year found about 80 percent were satisfied with their jobs. “When you have 10,000 employees, it is very difficult to create an atmosphere where you feel you are recognised as an operator,” he says. “When you have 350 employees, it’s a bit of a family. It is far more human, and people appreciate that.” Mr Molliet says demand has yet to catch up with the MAY 2013

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Hospitality recent growth in the supply of hotel rooms here. “There are a lot of rooms to fill,” he says. In the past two years almost 8,000 hotel rooms have been added to the city’s inventory, which is now about 27,500. But Mr Molliet sees it as a temporary problem. “It will stabilise eventually. There are no major openings next year. We will have this problem again in 2016. It takes time to absorb a big amount of inventory,” he says.

Photo: Carmo Correia

Favourite guests

WHERE THE HEART IS M

ichel Molliet is both the general manager of the Sofitel Macau at Ponte 16 hotel and vice-president of the Greater China arm of the Sofitel hotel chain. Mr Molliet was brought up in France, near Nice, but he has worked abroad for most of his career as a hotelier. Mr Molliet did stints in the Middle East, Southeast Asia and Australia before falling in love with Greater China. “People ask me, ‘Where is home?’ And my answer is: ‘Macau’,” he says. “Right now, this is the only place I would like to be. The dynamic in this part of the world is fantastic.” Mr Molliet’s career in the hospitality industry began in 1987, and only five years later he became general manager of a hotel in Thailand. In 2004 he moved to the mainland to take part in the opening of a complex of hotels in Xian run by the Accor SA hotel group. This was his first involvement with the Sofitel chain. He was vice-president of hotel operations of Venetian Macau Ltd, a subsidiary of Sands China Ltd, before rejoining the Sofitel chain in 2010.

MAY 2013

Mr Molliet says mainland visitors will continue to fill hotel rooms, protecting hotels here from the effects of competition from properties in other East Asian cities with casinos. “There is domestic growth that will continue to feed Macau,” he says. “I’m not overly worried that we will lose too much market share, especially with new infrastructure and new projects on the horizon.” The importance of mainland Chinese guests to the Sofitel chain is growing around the world. Mr Molliet says mainlanders are now the world’s number one tourism source market, so the chain is eager to burnish its image in the mainland. It already runs 21 hotels there and has plans for more in eight mainland cities. “The more we are present in the mainland and the better our experience and reputation is, the more travellers will choose a Sofitel property to stay in overseas,” he says. “The outbound mainland traveller is an opportunity for everybody. In many Sofitel units, the mainland client is becoming the number one customer.” The proportion of mainland guests in the Sofitel Macau is growing, although Mr Molliet declines to give figures. On the other hand, the proportion of guests from Hong Kong is dwindling slightly, he says. The Sofitel chain has been endeavouring to move upmarket since 2006. This has entailed reducing the number of hotels it runs to 120 by the end of last year, down from 201 in 2006, although it has opened 20 new properties since 2008. The chain’s move upmarket is part of a wider set of changes within Accor, which has failed to deliver the desired results. Accor has gone through three chief executives since 2005 – the latest to go was Denis Hennequin, just last month.

113 GUSTAVO CAVALIERE HOSPITALITY INDUSTRY EXPERT - gustavo.cavaliere@gmail.com

Arrested development THE LABOUR FORCE’S EXTREME FEAR OF ANYTHING NEW, NEED NOT THWART TRAINING EFFORTS

or most in Macau, Pablo Pineda’s name will not ring any bells. He is a Spanish casual actor with Down’s syndrome, who won the award for best actor at Spain’s San Sebastián film festival in 2009. Mr Pineda won the award for his performance in “Yo Tambien”, or “Me Too”, in which he plays a man with Down’s syndrome who gets a university degree and falls in love. Mr Pineda’s role is similar to his real life: he was the first student in Europe with Down’s syndrome to get a bachelor’s degree. He now gives talks on how well or otherwise, workers with disabilities are received in the labour market. Mr Pineda’s is one of the few conspicuous faces in a generation of people who are fighting prejudice against those with Down’s syndrome. Mr Pineda came to mind recently when a gaming company executive told me that Macau’s employees were “untrainable”. The executive rattled on about how workers here did not care about their performance because it was so easy to change jobs. The government’s labour policies only made things worse, he said. I understand the executive’s argument, up to a point, and share some of his frustrations. But should we give up? Is the labour force here really incapable of being trained? Mr Pineda serves as a reminder that with the right strategy, people can perform beyond expectations. I believe that just as Mr Pineda was capable of surmounting the obstacles posed by Down’s syndrome, workers here can overcome their own limitations. These limitations are what I call Macau syndrome. But while Mr Pineda’s is an inherited condition, Macau syndrome is more of an organisational psychology disorder.

Collective neophobia The most recognisable feature of Macau syndrome is the reluctance of employees, and even managers, to leave their comfort zone and abandon established work practices. Introducing change is hard in any workplace. Even minor adjustments can face powerful resistance, often thwarting acceptance of useful new ideas. This is especially true in Macau. The more a project here calls into question the status quo, the greater the resistance it is likely to face internally, whether the resistance is passive or active. Basically, people are unwilling to cooperate because they fear the unknown. Change brings big disruptions. It disputes past experience, challenges current routines and casts doubt on the efficiency of habitual thinking and behaviour. In extreme cases, change can shake up self-perceptions. It can impair the sense of belonging. Not surprisingly, many workers – and certainly a huge percentage in Macau – are quite creative when it comes to averting change. They consider change dangerous and find an array of schemes to fight it. This means many corporate initiatives fail to have the desired effect. Staff resist adopting them and companies lose, as their buck fails to produce the expected bang. Training is by definition disruptive. It brings change. Its

credo is: “Out with the old practices and in with the new”. That is why it is important, in training a workforce, to take into account their aversion to change.

Aversion therapy Workers are not like computers. Their old software cannot easily be overwritten with new. Training should not only teach new skills but also show trainees how to integrate their new skills into their routines. Most of Macau’s workers are poorly qualified and conservative. Any kind of training is likely to throw them out of their comfort zone and so face resistance. But there are ways to teach old dogs new tricks. One of the most obvious stratagems is to engage employees in designing and implementing training programmes. Staff should also be asked for regular feedback, thus giving them a sense of belonging and helping to dispel their fears and apprehensions. If employees feel they are part of the process, they consider themselves responsible for the success of a training programme. They then regard change as evolutionary and not negative. Certainly, none of this is easy. It is often hard to get workers here to give candid feedback and opinions. It is only natural for people to gravitate back to their old comfort zones once training ends. This is why it is critical that personal guidance and coaching is accessible to all in the workplace, in the six months after a training programme. Research has found this is how long it takes, on average, for new habits to become embedded in working routines. Through a proper understanding of how workers relate to their comfort zones, managers can design more effective training programmes – programmes capable of training even those once thought “untrainable”. As Mr Pineda once said, improving training and education “is the most direct way to improve society”. MAY 2013

Tourism Statistics

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Visitor arrivals Year-on-year change (%)

2012 Total - Same-day visitors - Overnight visitors Average length of stay

0.3 -3.8 5.0 0.0 days

28,082,292 14,504,994 13,577,298 1.0 day

Year-on-year change (%)

Latest

7,076,442 3,675,841 3,400,601 1.0 day

1.9 -2.8 7.6 0.1 days

Notes Jan-Mar 2013 Jan-Mar 2013 Jan-Mar 2013 Mar 2013

Visitors by place of residence 2012 Asia - Mainland - Guangdong - Fujian - Zhejiang - Hunan - Beijing - Shanghai - Tianjin - Chongqing Individual visit scheme - Hong Kong - Taiwan - Japan - South Korea - Others America Europe Oceania Others

Year-on-year change (%)

Latest

0.3 4.6

6,903,983 4,414,194 2,035,871 177,434 142,943 130,067 95,768 149,126 30,817 47,622

27,356,924 16,902,499 7,929,668 811,288 620,196 587,904 326,469 505,280 127,635 194,420 7,131,904 7,081,153 1,072,052 395,989 444,773 1,460,458 306,521 262,692 129,165 26,990

-3.3 -13.0 7.7 10.2 3.7 7.2 26.9 12.9 8.2 -6.6 -11.8 0.0 11.5 -4.6 -1.3 4.3 0.9 8.6

Year-on-year change (%)

2.1 4.4 -3.1 -17.7 -0.1 -1.7 8.5 12.6 -3.2 -0.6 9.7 0.2 -4.5 -31.2 2.6 -2.7 -4.6 3.5 -8.6 -12.3

1,953,532 1,724,330 238,588 76,610 128,834 321,427 68,454 65,670 32,726 5,609

Hotels Hotel and guest-house rooms Hotel guests Hotel average occupancy rate Average length of stay

26,069 9,541,397 83.1 1.40 nights

16.6 10.8 -1.0 -0.1

percentage point nights

Latest

Year-on-year change (%)

28,122 1,607,669 80.1 1.4 nights

26.1 13.2 percentage -2.2 points -0.1 nights

Notes Feb 2013 Jan-Feb 2013 Jan-Feb 2013 Feb 2013

Visitor expenditure 2011 Total spending (excluding gaming) MOP 45.3 billion - Non-shopping spending - Shopping spending Per-capita spending

APRIL 2013

MOP 22.9 billion

22.4 billion MOP 1,619 MOP

Year-on-year change (%)

20 23 16 7

Latest MOP 14.6 billion MOP 7.5 billion MOP 7.1 billion MOP 2,019

Year-on-year change (%)

9 15 3 11

Notes Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012

Source: Statistics and Census Service

Year-on-year change (%)

2012

115

VISITOR GROWTH TO BE FLAT IN 2013 City will welcome 28 million tourists this year, Tourist Office head forecasts The Macau Government Tourist Office expects the 2013 visitor number to total 28 million, roughly the same as last year, bureau head Maria Helena de Senna Fernandes said last month. She added that the H7N9 flu is not expected to have a severe impact on Macau tourism. Macau welcomed almost 2.4 million tourists in March, up by

1.6 percent year-on-year. This was the second consecutive month in which tourist arrivals increased in comparison with one year before. Macau recorded consecutive year-on-year drops in monthly tourist arrivals from May 2012 until January this year. In the first quarter of 2013, visitor arrivals edged up by 1.9 percent year-on-year to 7.1 million.

SOUTHEAST-ASIAN TRAVEL OPERATORS VISIT MACAU

NO STAMPING TO BOOST BORDER EFFICIENCY: POLICE

A familiarisation group of nearly 100 Southeast-Asian travel agents from Singapore, Malaysia and Indonesia visited Macau for site inspections and business networking. The four-day visit, which took place last month, was organised by the Macau Government Tourist Office. The mega trade visit served to further promote Macau to international visitorsource markets, the office said in a statement. Singapore, Malaysia and Indonesia all ranked among the top-10 visitorsource markets for Macau last year.

The Public Security Police Force forecasts the introduction of a stamp-free clearance system for all Chinese twoway permit holders will improve efficiency at the border checkpoints. The new system was introduced last month: arriving visitors are issued a computer-printed arrival declaration form, in lieu of having their two-way permit stamped; the permit is also not stamped upon departure. This is the same system already used for arriving holders of Hong Kong Permanent Identity Cards.

MINIMUM CHARGE FOR TOURS MAY HELP REDUCE DISPUTES

The president of the Macau Tourist Guide Association Angelina Wu Wai Fong says possible guidelines on package tour fees for travel agencies, following an example from the mainland, could help minimise travel disputes here. Official news agency Xinhua reported that 16 travel agencies in Ningxia Hui autonomous region have come up with guidelines for arranging travel groups to Macau and Hong Kong. The rules say the lowest fee for seven-day tours including roundtrip flights should be RMB4,180 per person (MOP5,343), and RMB3,280 for nine-day tours by train.

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Human Resources

Money, lies, greed Fake job offers by people smugglers continue to lure unsuspecting Filipinos seeking the financial reward of working here BY LUCIANA LEITÃO

or many Filipinos, landing a job in Macau is a golden opportunity to build a better life. But the lure of Macau has spawned a swarm of unlicensed recruiters that charge a hefty commission for the promise of a fictitious job, or to be employed illegally. Macau had nearly 115,000 non-resident workers at the end of March, the most ever. That number will increase as workers move here to fill thousands of jobs created by Cotai’s casino resorts. The Philippines will be among the sources of labour. The size of the Filipino non-resident workforce peaked in March at 17,000 people. The Human Resources Office says most were working as domestic servants or in hospital-

MAY 2013

ity. The country is the second-biggest source of Macau’s imported labour after the mainland. The unlicensed recruiters take advantage of unsuspecting Filipinos seeking the financial reward of working here. The scam opens with an illegal recruiter promising a job in Macau. The job seeker pays a commission up front. When the candidate arrives in Macau, a second “recruiter” might demand further “employment fees”. Eventually the candidate recognises that no job exists and is stranded. In one case this year, 10 Filipinas who had arrived from Hong Kong were stranded at Macau International Airport for about a month. The Philippine

consul-general here, Danilo Ibayan, says they had been promised jobs in Cyprus but were sent to Macau. “The recruiter was a Philippine woman from Hong Kong, who already had a record, and the ladies were in the airport waiting for a ticket to Cyprus,” he says. Mr Ibayan says the authorities returned the women to Hong Kong and reported the case to police there. The “recruiter” has been charged. Mr Ibayan says that more recently, his consulate was notified of a complaint made in Manila by 40 Filipinos sent to Macau to take up “jobs”, who returned home disappointed. “They had already paid almost US$2,000 [MOP16,000] each,” he says.

117 One comfort for the unwary is that figures provided by the Philippine Consulate-General in Macau indicate that the numbers of Filipinos illegally recruited for jobs here is falling.

Double bind The consulate recorded five cases involving 30 victims from March to December 2010. All the victims were repatriated. In four cases the victims got their money back. One case is ongoing. The consulate says there were three cases of illegal recruitment involving 24 victims in 2011. All the victims were repatriated. Last year the consulate received 14 complaints from individuals saying they were promised jobs by conmen in Manila. The Judiciary Police told Macau Business that five illegal recruitment cases had been investigated between 2011 and March. Last year they investigated one case and, so far, none this year. The Labour Affairs Bureau says it received 83 complaints against employment agencies in 2011 and 66 last year. The bureau received 30 complaints in the first quarter of this year. The figures include all types of complaints, not just those involving conned Filipinos. The Philippine Consulate-General knows of no recruitment agencies in Macau illegally recruiting Filipinos. “The recruiters are usually also Filipinos,” Mr Ibayan says. A Filipino specialist in human resources at the University of Macau, Zenon Udani, says the first contact between the illegal recruiter and their victims takes place in the Philippines. “They [the victims] come from the provinces, not from Manila. These are usually people not too educated, that borrow money from relatives and friends, or sell their property to have money to come here,” Mr Udani says. Remittances sent home by the millions of expatriate Filipinos keep the Philippine economy afloat. Their remittances amounted to US$21.4 billion (MOP171.2 billion) last year, more than ever, and made up 6.5 percent of gross national income.

In one case this year, 10 Filipinas that had arrived from Hong Kong were stranded at Macau International Airport for about a month cies caught breaking the rules face prosecution and closure. Illegal recruiters may be individuals, here or in the Philippines, posing as middlemen for Macau employers. They may be bogus employment agencies, working with someone in Macau

pretending to be a placement agent. In some cases travel agencies in the Philippines that are legitimate in every other respect, have been suspected of illegal recruitment. Mr Udani says Philippine officials are aware that people are being sent to Macau. In some cases immigration officials have stopped Filipinos at passport control and prevented them from leaving the country on strong suspicion that they are victims of human trafficking or illegal recruitment, he says. A Filipino Catholic priest in Macau, Pedro Balde, says he has helped many of his compatriots lured here by illegal recruiters. Father Balde says he has dealt with an average of about 10 cases a year since 2006, but fewer than usual last year.

Helping hand The Philippine Overseas Employment Administration regulates the recruitment of Filipinos for jobs abroad. “Most Filipinos looking for jobs overseas normally have to pass through it first,” Mr Udani says. Licensed recruitment agenMAY 2013

118

Human Resources There is a spike whenever a new major resort opens, most recently when the Galaxy Macau casino resort opened in 2011. Galaxy Entertainment Group Ltd, the owner and operator of the Galaxy Macau, reported the matter to the Philippine Consulate-General. In some cases the victims are persuaded to recruit other Filipinos, Father Balde says. One example in 2008 involved about 200 people and forged passports. He says some casinos, hotels and restaurants dismissed employees for abusing their positions to dupe Filipinos into paying to fill imaginary vacancies.

Cost of silence

FILIPINO NON-RESIDENT WORKERS 18,000 16,000

Number of workers

14,000 12,000 10,000 8,000 6,000 4,000 2,000 0

2007

2008

2009

2010

2011

2012

2013 March

Source: Human Resources Office

MAY 2013

Father Balde says official figures fail to fully reflect the amount of illegal recruitment for jobs here. Many Filipino victims are reluctant to press charges, giving priority to getting their money back – if they can locate their contact. “Once the money is returned, not many victims file a complaint,” Father Balde says. In some cases, the victims and the recruiters are “close friends or relatives” and prefer to settle the matter out of court. Father Balde says prosecuting illegal recruitment here is complicated. “As the transaction usually happens in the Philippines, the Macau authorities may not interfere.” Most victims choose to return to the Philippines, but some try to stay on and make a living. He advises them to leave, as they can be drawn into doing something illicit to survive. Mr Ibayan says the Philippines sends thousands of workers overseas every year. “In Macau, we have more than 17,000 Filipinos working. That is a big number, considering there is a 580,000 population.” The Philippine government prevents people from leaving the country to work in some places unless they have a proper employment contract. Macau is not on the list. Mr Ibayan says most Filipinos working here first entered on tourist visas granted on arrival and only later signed their contracts. It is easier for them just to show up here to work now that low-cost airlines have frequent flights connecting Macau and the Philippines. When the consulate comes across a case of illegal recruitment, it starts mediation, he says. “If the money is returned, usually the case is over, because the victim does not want to complain,” Mr Ibayan says.

119 ANDRÉ RIBEIRO CONSULTANT AND EXECUTIVE COACH - andre@extracoaching.com

The power of focus THE FIRST STEP ON THE ROAD TO A SUCCESSFUL CAREER AND HAPPY LIFE IS TO SHARPEN YOUR ABILITY TO CONCENTRATE

ou use it throughout your entire life. You are using it right now, as you read this article. It is focus, and focus affects the way you act and react, each and every day. Being able to focus properly can improve your quality of life – and your career prospects. The benefits apply to everyone but are of particular importance for top executives. That is why focus training is a key component of most executive coaching courses. Each person has specific patterns of focus. These can be developed to make you more attentive. The baseline is to first understand what parts of a person’s work and personal life they give most attention to. These are their main areas of focus. Ideally, focus should be appropriate to the importance of what is focused on. It should be steady and sustainable, but also flexible, so it can respond rapidly to new events. Let us do an experiment. Look around you and try to detect as many blue objects as you can. Take 20 seconds doing it. Then continue reading this article. When you consciously choose to focus on something specific, your reticular activation system goes to work. It begins filtering out everything that is unconnected with the object of your attention. The result is that you give more importance to data relevant to the matter on hand, while disregarding what is irrelevant. For example, when you go outside, you usually pay no attention to the cars parked round about. But if for any reason you become interested in a particular model of car (which you may wish to buy, for instance), you will probably notice every time you see one. Soon you will begin wondering how it was that you never before appreciated how popular that model is.

The same thing happens with clothes, mobile phones or any other objects.

Seeing red Continuing our experiment, do you recall how many red objects you saw when you were focusing on finding blue items around you? You probably do not. This is because your attention was locked on the colour blue. Once you concentrate on something particular, you become increasingly aware of it, while filtering out other things. Focus also plays a role on a more personal level. By changing their patterns of focus, a person can shift from being depressed to feeling empowered. Focus directs your life because it is the first filter of reality. If you give more attention to what you lack than to what you have, you are probably going to feel miserable. Yet people are often unaware of the importance of focus. And few know how to put focus to best use. The first step is to become self-aware. At work, your focus affects your performance considerably. Some people focus on what they cannot control or influence. Others focus on what they can have an effect on, making them more productive. Executives need to understand the importance of aligning their attention with their objectives. Executives must learn which patterns of focus better suit their needs, and how to switch between high and low levels of attention whenever necessary. Asking the right questions is one simple way to redirect focus. Questions can direct a person’s attention to new areas. Having focus in your personal life and career helps you move faster towards your goals and attain overall wellbeing. MAY 2013

If you know of an event that you believe should be listed with Macau Business, please drop us an e-mail: editor@macaubusiness.com. In the subject bar, type in “List me as an event”.

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May Date: Event:

Asia Pacific Hotel Investment Conference Dusit Thani Bangkok Hotel, Bangkok, Thailand Questex Asia Events http://ihif.questexevents.net marketing@questexasia.com

Date: Event: Venue: Organiser: Address:

21st – 23rd

Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail: Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail:

G2E Asia Venetian Macao-Resort-Hotel, Macau Reed Exhibitions and American Gaming Association 39/F Hopewell Centre, 183 Queens Road East, Wanchai, Hong Kong (852) 2824 0330 (852) 2824 0246 www.g2easia.com info@g2easia.com 23rd – 24th

Japanese Investments Summit 2013 Hotel Chinzanso Tokyo, Tokyo, Japan Marcus Evans 6F HANY Higashi-kanda-Bldg, 2-1-8 Higashi-kanda, Chiyoda-ku, Tokyo 101-0031, Japan (81) 3 5823 0688 (81) 3 5823 0689 www.japaneseinvestmentsummit.com webenquiries@marcusevanscy.com 27th – 29 th

CMO Asia Summit 2013 Venetian Macao-Resort-Hotel, Macau Marcus Evans 9 Demostheni Severi Avenue, Nicosia 1080, Cyprus (357) 22 849 300 (357) 22 849 307 www.cmoasiasummit.com webenquiries@marcusevanscy.com

June Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail:

24th – 26th

Venue: Organiser: Address:

Hyatt Regency Hong Kong, Hong Kong Beacon Events 20/F, Siu On Centre, 188 Lockhart Road, Wanchai, Hong Kong (852) 2219 0111 (852) 2219 0112 www.corruptionandcompliance-asia.com info@beaconevents.com

15th – 16th

Venue: Organiser: Website: E-mail:

Tel: Fax: Website: E-mail:

Date: Event:

Tel: Fax: Website: E-mail: Date: Event:

27th

Venue: Organiser: Address:

Hyatt Regency Hong Kong, Hong Kong Beacon Events 20/F, Siu On Centre, 188 Lockhart Road, Wanchai, Hong Kong (852) 2219 0111 (852) 2219 0112 www.bankingandfinancecompliance.com info@beaconevents.com

Tel: Fax: Website: E-mail:

Venetian Macao-Resort-Hotel, Macau China International Contractors Association No.2, Dongzhimennei Street, Dongcheng District, Beijing, China (86) 10 5976 5212 (86) 10 5976 5214 www.iiicf.org iiicf@chinca.org

Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail:

5th – 7th

6th Computer & Digital Products Expo Venetian Macao-Resort-Hotel, Macau A Plus PR & Advertising Co Room 1408, 14/F Luso International Bank Building, Rua do Dr Pedro José Lobo, Macau (853) 2870 3930 (853) 2871 6297 www.aplus1996.com info@aplus-pr.net

Date: Event:

5th – 7th

Venue: Organiser: Address:

Venetian Macao-Resort-Hotel, Macau A Plus PR & Advertising Co Room 1408, 14/F Luso International Bank Building, Rua do Dr Pedro José Lobo, Macau (853) 2870 3930 (853) 2871 6297 www.aplus1996.com info@aplus-pr.net

Tel: Fax: Website: E-mail: Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail:

MAY APRIL 2013 2013

Banking & Finance Compliance Summit 2013

July

6th – 7th

4th International Infrastructure Investment and Construction Forum

Corruption & Compliance Asia Congress 2013

5th Home & Household Products Expo

12th – 14th

Macao Franchise Expo 2013 Venetian Macao-Resort-Hotel, Macau Macao Trade and Investment Promotion Institute World Trade Centre Building, 1st & 4th floors, 918, Avenida da Amizade, Macau (853) 2831 3220 (853) 2831 3221 www.mfe.mo sec@mfe.mo : A Macau Business partner event

Marketing

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Persuasive argument Wining an Effie award could help marketing businesses catch the attention of clients acau-based marketing communications companies need more opportunities from their clients to put their talent on display, says Rebecca Choi, the Macau partner of one of the marketing industry’s most important awards – the Effie Awards. Ms Choi, a director of Conde Group Ltd, is the Macau representative for this year’s Effie China Awards. The competition is open to entries from all over the Greater China region. She says there is “much room” to develop the city’s marketing communications industry, and that awards such as the Effies can help by showing effective creative work. The industry will never progress if clients with deep pockets do not start offering chances to Macau-based agencies, Ms Choi says. “At the moment, the big gaming operators use Hong Kong companies but do not involve local companies much. They think Macau companies are not up to the standard.” To show clients they can deliver, marketing companies here “need opportunities to try out more demanding jobs,” she says. Conde started in Macau 20 years ago before expanding to Britain and Hong Kong. The company has been associated with the Effie China Awards for two years, bringing an exhibition of winning work and an effective advertising seminar to Macau in 2011. This year, Conde has arranged a forum on marketing effectiveness at MGM Macau and a seminar on Effie awardwinning campaigns at the Macau University of Science and Technology on May 30 and 31 respectively. The events are directed at helping develop the marketing industry and promoting the Effie Awards.

Creative numbers The Effie Awards were first introduced to the mainland in 2003 after the China Advertising Association signed an agreement with the American Mar-

keting Association, which created the awards in 1968. The awards recognise the most effective advertising efforts each year, first in the United States and now at chapters around the world. The Effies emphasise creativity and advertising that delivers tangible business results. Participating campaigns are required to back their effectiveness claims with statistics. The Effie China Awards received about 400 entries from all over the Greater China region last year, says Ms Choi. Just one was related to Macau: the advertising campaign for The House of Dancing Water show at the City of Dreams casino resort. “The organisers want to involve Macau more,” Ms Choi says. Entries for the 2013 edition can be submitted until August. She says that by participating in the Effie China Awards and eventually win-

ning prizes, Macau marketing companies can also attract outside talent. “Sometimes, we cannot compete with money [to attract talents] and we have to compete with other things. We have to offer them better opportunities to learn and to have challenging work.” The 2013 Effie China Awards ceremony is scheduled to take place on October 27. Hong Kong has had its own Effie Awards structure for 10 years, run by the Association of Accredited Advertising Agents of Hong Kong. This year’s award winners were selected from 79 entry submissions – a new record. The award presentation takes place on May 30. The most successful advertiser from the 39 worldwide Effie competitions last year was Anglo-Dutch multinational Unilever. Fast-food chain McDonald’s was the most effective brand, and Ogilvy & Mather was considered the most effective advertising agency network. MAY 2013

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Luxury

Rollers on a roll

Rolls-Royce launches a new model after a high-performance 2012 BY ALEXANDRA LAGES

olls-Royce Motor Cars Ltd is having a particularly profitable spell, its sales in Macau helping propel growth in the Asia-Pacific region. Sales of Rolls-Royces in the AsiaPacific region rose by 18 percent last year, despite a more challenging environment in the mainland. Sales in Macau and Hong Kong were the highest ever. The two cities combined are RollsRoyce’s third-biggest market in Asia, after the mainland and Japan. Rolls-Royce does not disclose data solely on its market in Macau. But the general manager of Rolls-Royce Motor Cars Hong Kong, Samuel Sun, says it is about to deliver five Rolls-Royce Phantoms to casino operator Sands China Ltd. Wynn Macau Ltd is another casino company with a sizeable fleet of Rolls-Royces. Rolls-Royce’s general manager for the Asia-Pacific region, Dan Balmer,

MAY 2013

says: “We grew 18 percent last year compared to the year before, which is very good considering that we’ve changed from Phantom Series I to Series II last year. Usually, when you interrupt the production of a car for a new model, you have a slowdown in sales because you can’t provide so many units.” Rolls-Royce opened a showroom in Macau in March last year. The results have exceeded the company’s expectations. Many casino-hotels are pushing up demand for high-end vehicles to transport their VIP patrons. “There is a logical reason to be in Macau. The hotel trade is going very well,” Mr Balmer says. “For them, a car is not just a plaything but also a business tool,” he adds. “We are seeing some good activity, from the sales and servicing activities as well.” Rolls-Royce sold 3,575 cars last year,

the most in the marque’s 108-year history, breaking a sales record that had been set only the year before. China and the United States remain the company’s most important markets, although business in the mainland cooled as would-be buyers held back while political power in Beijing passed from the old guard to the new.

Case of the GTs Mr Sun forecasts a “steady increase” in sales in Macau and Hong Kong this year. “We are looking optimistically to the future, as well,” he says. Rolls-Royce’s authorised dealer in Macau is Goodwood Motors Ltd, part of the Sime Darby Bhd group. Rolls-Royce introduced its latest model in Hong Kong last month. The Rolls-Royce Wraith, first unveiled in March at the Geneva Motor Show, is a departure from the conventional four-

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Rolls-Royce Wraith

door cars the marque is famous for. It has two doors and is inspired by the grand tourers of the 1950s and 1960s. The Wraith is the most powerful Rolls-Royce ever produced. It has novelties ranging from voice-activated functions to a satellite-aided transmission. The first vehicles will be rolling onto the market in the fourth quarter of this year. Mr Balmer says that the introduction of the new model is part of an effort to entice a wider range of buyers. He says the Rolls-Royce Ghost and the Rolls-Royce Phantom appeal more to buyers that see themselves sitting in the back while a chauffeur drives. “With the Wraith, we are expecting customers with a different kind of need in terms of a car,” he says. “Maybe they were driving sports cars before. But the Wraith offers four seats, as opposed to most sports cars that offer two seats or two-plus-two, which is very narrow.” Mr Balmer does not expect many potential buyers in the Pearl River Delta to fall in love with the Wraith immediately. “Customers here will buy more Ghosts and Phantoms than the Wraith, while other markets, for example Japan and Australia, might see more fifty-fifty

“There is a logical reason to be in Macau. The hotel trade is going very well,” says Rolls-Royce’s general manager for the Asia-Pacific region, Dan Balmer. “For them, a car is not just a plaything but also a business tool”

between the Wraith and others,” he says. Rolls-Royce expects its new grand tourer to sell better in Hong Kong than in Macau. “Macau will be more a saloon car market rather than a coupé market,” Mr Sun says. A basic Wraith costs HK$5.5 million (US$708,000). But most RollsRoyces end up costing much more than their basic price because buyers demand customisation. A previous model of Rolls-Royce, launched in the 1930s, was also called the Wraith. Wraith is a word of Celtic origin meaning ‘a guardian spirit’, Mr Balmer explains, “but more on the evil and darker” side of mythology. “The Ghost is our conventional car and the Wraith is more an angry version,” he says. All Rolls-Royce models have names that mean spirit in one way or another. But Mr Sun says this does not raise eyebrows among often-superstitious Chinese buyers. “When you say Ghost or Phantom to people who know cars, they think of cars and not of spirits,” Mr Balmer remarks. “I think the Wraith will have the same effect.” MAY 2013

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Arts & Culture

MAY 2013

125

Macau’s most prolific polymath, Carlos Marreiros is set to represent the city at the upcoming Venice Biennale BY LUCIANA LEITÃO

rchitect, painter, civil servant, professor, event promoter, activist: Carlos Marreiros is one of Macau’s most creative minds. It is little wonder then that he has been given the honour of representing the city at the Venice Biennale International Art Exhibition. His latest project, called “Pato.Men”, is a large-sized art installation, which will be Macau’s entry at the Biennale, one of the world’s most celebrated events for contemporary arts. It kicks off next month in Italy and runs until November 24. Pato.Men is one the exhibition’s secondary events, since Macau is not included in the main programme.

MAY 2013

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Arts & Culture

This year’s Biennale is going under the title “Il Palazzo Enciclopedico” or “The Encyclopaedic Palace”. It refers to an idea by Italian-American artist Marino Auriti, who in 1955 proposed creating a museum to house all worldly knowledge. It would have brought together the greatest discoveries of the human race, from the wheel to the satellite. Auriti’s plan was never carried out but Marreiros decided to take up the challenge. For this, he is using a personal in-

terpretation of the “Theatre of Memory” proposed by 16th century Italian philosopher Giulio Camillo, whose aim was to order knowledge through pictures and scrolls. The information was to be stored in drawers in a multi-tiered theatre of his own design, organised in such a way as to aid memory. With this in mind, Pato.Men uses images, installations and drawings to encourage reflection on information and knowledge, how they are ordered, and their manipulation. Pato.Men

TOWER OF BABEL T

he Venice Biennale has for more than a century been one of the most prestigious cultural institutions in the world. Established in 1895, today it attracts more than 370,000 visitors to the art exhibition. After starting out as an art exhibition, it began expanding in the 1930s when new festivals within the Biennale were born: music, cinema and theatre. The Venice Film Festival in 1932 was the first of its kind in the world. In 1980, the first International Architecture Exhibition took place, and in 1999 dance made its debut at the Biennale. This year, 88 countries will be participating at the art exhibition. Ten will be there for the first time. On top of that, 48 side events and exhibits will also be on display, including Carlos Marreiros’ Pato.Men. The side events are promoted by non-profit national and international bodies, including the Macau Museum of Art in Macau’s case. They aim to enrich the diversity of voices that characterises the Venice exhibition, according to the organisers. Among the side events this year will be mainland artist

MAY 2013

Ai Weiwei’s “Straight”. This is a project that uses long steel reinforcing bars recovered from schools that collapsed during the Sichuan earthquake in 2008. The Biennale will also feature a central exhibition, with works spanning the past century alongside several new commissions, including more than 150 artists from 37 countries.

Venice

127

Carlos Marreiros’ work as an architect can be seen all around Macau, from Tap Seac Square to the C Shop building, to several redevelopments of historic buildings. He also designed the Macau Pavilion at the Shanghai World Expo 2010. The pavilion took the form of a traditional jade rabbit lantern is an acronym of “Palace Theatre of Memory Encyclopaedic”. The journey starts in Biblical times, with Noah’s Ark, and stretches up until today’s cybernetic era. A trinity of Camillo, the father; Apple’s Steve Jobs, the son; and Auriti, the spirit, serve as guides.

Guilty pleasures Macau is also represented in the installation. There are references to the city’s own ethnic group, the Macanese. Marreiros is Macanese. Revolutionary leader Sun Yat Sen, dubbed the father of modern China and who lived in Macau for a few years, is also mentioned. This will be the fourth time Macau has participated in the Biennale, since debuting there in 2007. For the first time, the Macau Museum of Art chose to take only one artist to Venice. It did not hold a competition to select the winning project, simply inviting Marreiros. He says he has already invested about MOP500,000 (US$61,000) in Pato.Men. Preparing it involved some 15 people, including carpenters, painters and architects. The artwork is now on its way to Venice by ship. The Biennale honour is but the latest in a long line of achievements by Marreiros, who was born in 1957. His work as an architect can be seen all around Macau, from Tap Seac Square to the C Shop building, to several redevelopments of historic buildings. He also designed the Macau Pavilion at the Shanghai World Expo 2010. The pavilion took the form of a traditional jade rabbit lantern. In a much-decorated career, Marreiros has planned, designed and built close to 200 buildings in Greater China, Portugal and Australia. His artworks, often ironic, satirical and caustic, are also widely recognised. One of his solo exhibitions, “Some Smoky Stories”, was on display in 2010, when the Legislative Assembly was discussing a bill to ban smoking in public spaces. It featured several smoking-related sketches by Mr Marreiros, who admits tobacco is one of his own guilty pleasures. Marreiros has a special affection for drawing, which he considers the purest art form. It is his preferred medium for the Biennale installation, which will be essentially in black and white. Marreiros heads the cultural association Albergue SCM. He founded the government-run magazine “RC – Review of Culture” and headed the Cultural Affairs Bureau between 1989 and 1992. Marreiros is also a community leader, serving on many non-governmental organisations and governmental committees.

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Arts & Culture

Sainte-Beuve, 1987

is the task of radical thought, since the world is given to us in unintelligibility, to make it more unintelligible, more enigmatic, more fabulous,” Jean Baudrillard once said. That was what the controversial, often ironical Frenchman did throughout his life, mainly through philosophy. But it is through his photography, one of his less well-known accomplishments, that Macau is getting to see the world as Baudrillard saw it. This month, the Tap Seac Gallery will hold an exhibition of about 50 photographic works by Baudrillard. The gallery describes the exhibition as the “most complete and comprehensive introduction” to Baudrillard’s photographic oeuvre shown since his death in 2007 at the age of 77. Baudrillard’s widow, Marine Baudrillard, personally chose the works to be exhibited, and the curator of the exhibition is French-Chinese Fei Dawei. The Cultural Affairs Bureau has arranged the exhibition with the help of the Consulate General of France in Hong Kong and Macau, and the Alliance Française de Macao. The exhibition forms part of both the Macao Arts Festival and the French art festival, Le French May. It was first shown at the Lianzhou International Photography Festival in Guangdong in 2010. The Tap Seac Gallery will also hold a seminar on Baudrillard’s life, work and legacy. Mr Fei and researchers Gu Zheng and Che Hio Ieong, who have studied Baudrillard’s photographic theory, will discuss the philosopher’s artistic concepts in detail. The seminar will be held on May 11, in the afternoon (2:30pm-5:30pm), and will be conducted in Cantonese and Mandarin.

Self-reinventing

PHOTOGRAPHIC WORKS BY FRENCH PHILOSOPHER JEAN BAUDRILLARD ARE ON SHOW IN THE TAP SEAC GALLERY

MAY 2013

Baudrillard is one of the most influential French philosophers of our time and one of the most read in China. He was a trans-disciplinary theorist, and a prolific thinker and author. Baudrillard was born in northeastern France. His grandparents were peasants and his parents civil servants. He was the first in his family to go to university, studying at the Sorbonne in Paris. Baudrillard published his first book, “The System of Objects”, in 1968. The book was a sharp critique of contemporary consumer society. In subsequent writings, he expanded on consumer society, and dealt with the relationship between truth and reality and the use of symbols. He went on to publish dozens of books, com-

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Bruges, 1997

Paris, 1986

Sainte-Beuve, 1990

Rio, 1996

menting on some of the most salient cultural and sociological phenomena of his era. He often assumed the role of provocateur, calling into question the status quo. His fame spread beyond the academic world when he argued that the First Gulf War, in 1991, had never taken place. He meant that what the television-viewing public had seen was a simulation, which disguised the reality. Baudrillard eventually became one of the foremost intellectual figures in postmodern cultural studies. A British newspaper, The Guardian, dubbed him “the David Bowie of philosophy” because of his ability to reinvent himself.

Oddly haunting Photography became part of Baudrillard’s arsenal in 1981, when he was given his first camera. His activity as a photographer became more intense during the 1990s, as he travelled the world. He focused mainly on objects, rather than people.

“To turn an object into art you just have to make it useless,” he argued. The works he made stripped the objects depicted of depth and time, of continuity and ultimately of meaning, so creating unintelligible images. “To add back all these dimensions one by one – movement, ideas, meaning, desire – to multimediatise the image so as to make things more real, that is to say, better simulated, is a total misconception,” Baudrillard wrote. The way the world looked through Baudrillard’s lens attracted widespread attention and stirred controversy in the world of art. British art critic Adrian Searle described Baudrillard’s photographic works as “wistful, elegiac and oddly haunting... like movie stills of un-regarded moments.” To Baudrillard, his photographic works were more than that. Their “disembodiment” was the price to be paid for “something that is neither true nor real, but is beautiful”. MAY 2013

130 130

Moments

EVERYONE’S A WINNER

Caesars Golf Macau welcomed the Special Olympics Golf Masters 2013 last month, hosted by the Charity Association of Macau Business Readers. Only in its second edition, it is already the biggest tournament of its kind in Asia. A total of 14 teams from 12 countries joined the competition, including South Africa’s Special Olympics gold medallist Thomas Lugg. Some of Macau’s businesspeople and golf enthusiasts also participated in the event, partnering with athletes on the greens as ‘guardians’, serving and teaching them how to improve their game. In the end, all were winners. That’s a true driver

Katharina Swanson

William Cottrell, his coach and guardian player Roberto Sousa

Great golfing

Give me five MAY 2013

131 Photos: Gonรงalo Lobo Pinheiro

The traditional group photo

Guardian player Alastair Dick and Scott Hastings

Darren Tait

Jayden Wright

Guardian player Lindsay Stewart and Man Shan Cheung

Amal Athira Nordin

Kim Ah Ra

Guardian player Paulo A. Azevedo and Kim Tae Hyun MAY 2013

132 132

Moments

HAPPY BIRTHDAY

Business Daily, Macau Business’ sister publication, is already one year old! The newspaper, also under the umbrella of De Ficção – Multimedia Projects, celebrated its first anniversary last month. Joining it was Essential Macau, which turned two. The publication is produced by Global Asia Media, a joint venture between De Ficção and Open Media from Portugal. Over 150 guests flocked to the China Rouge club, at Galaxy Macau, to show their support for the two projects.

Luciana Leitão and Filipa Queiroz

Paulo A. Azevedo, Peter Kendall, Janette Kendall and Gabe Hunterton

Ronald Cheung

Zoe Sou and James Chu

Beth Doherty

Denise Gould and Ian Gould

Nuno Simões and Vítor Gomes

Kera Whelan and Edwin Whelan

Paulo Barbosa

MAY 2013

133 Photos: Gonçalo Lobo Pinheiro

Jiji Tu

Pedro Cortés, Bruno Ascensão, José Braz Gomes and José Costa Santos Mafalda Melo and Luís Melo

Mimi Chan

José Drummond, Clara Brito and Manuel Correia da Silva

Katherine Liu, Charles Ngai and Reddy Leong

Tim Shepherd and Hannah Shepherd

Cristina Lobo and Ana Telo Mexia

Martin Schnider and Bruce Hawker

Eric Sautede and Emilie Tran

Rashid Suliman, Simon Broad and Chris Rogers

Jack Galati and Denise Galati MAY 2013

134 BRAHMA CHELLANEY PROFESSOR OF STRATEGIC STUDIES AT THE NEW DELHI-BASED CENTRE FOR POLICY RESEARCH

Asia’s resource scramble INCREASINGLY MURKY RESOURCE GEOPOLITICS THREATENS TO EXACERBATE EXISTING TENSIONS AMONG ASIAN COUNTRIES

ompetition for strategic natural resources – including water, mineral ores and fossil fuels – has always played a significant role in shaping the terms of the international economic and political order. But now that competition has intensified, as it encompasses virtually all of Asia, where growing populations and rapid economic development over the last three decades have generated an insatiable appetite for severely limited supplies of key commodities. Asia is the world’s most resource-poor continent, and overexploitation of the natural resources that it does possess has created an environmental crisis that is contributing to regional climate change. For example, the Tibetan Plateau, which contains the world’s third-largest store of ice, is warming at almost twice the average global rate, owing to the rare convergence of high altitudes and low latitudes – with potentially serious consequences for Asia’s freshwater supply. In other words, three interconnected crises – a resource crisis, an environmental crisis and a climate crisis – are threatening Asia’s economic, social and ecological future. Population growth, urbanisation and industrialisation are exacerbating resource-related stresses, with some cities experiencing severe water shortages, and degrading the environment (as anyone who has experienced Beijing’s smog can attest). Fossil-fuel and water subsidies have contributed to both problems.

Resource geopolitics Faced with severe supply constraints, Asian economies are increasingly tapping other continents’ fossil fuels, mineral ores and timber. But water is extremely difficult – and prohibitively expensive – to import. And Asia has less fresh water per person than any continent other than Antarctica, and some of the world’s worst water pollution. Likewise, food scarcity is a growing problem for Asian countries, with crop yields and overall food production growing more slowly than demand. At the same time, rising incomes are altering people’s diets, which now include more animal-based proteins, further compounding Asia’s food challenges. The intensifying competition over natural resources among Asian countries is shaping resource geopolitics, including the construction of oil and gas pipelines. China has managed to secure new hydrocarbon supplies through pipelines from Kazakhstan and Russia. But this option is not available to Asia’s other leading economies – Japan, India and South Korea – which are not contiguous with suppliers in Central Asia, Iran or Russia. These countries will remain dependent on oil imports from an increasingly unstable Persian Gulf. Furthermore, China’s fears that hostile naval forces could hold its economy hostage by interdicting its oil imports have prompted it to build a massive oil reserve and to plan two strategic energy corridors in southern Asia. The corridors will provide a more direct transport route for oil and liquefied gas MAY 2013

from Africa and the Persian Gulf, while minimising exposure to sea-lanes policed by the United States Navy. One such corridor extends 800 kilometres from the Bay of Bengal across Burma to southern China. In addition to gas pipelines – the first is scheduled to be completed this year – it will include a high-speed railroad and a highway from the Burmese coast to Yunnan province, offering China’s remote interior provinces an outlet to the sea for the first time. The other corridor – work on which has been delayed, owing to an insurrection in Pakistan’s Baluchistan province – will stretch from the Chinese-operated port at Gwadar, near Pakistan’s border with Iran, through the Karakoram mountains to the landlocked, energy-producing Xinjiang province. Notably, in giving China control of its strategic Gwadar port in February, Pakistan has permitted the Chinese government to build a naval base there.

Strategic competition Given the significant role that natural resources have historically played in global strategic relations – including driving armed interventions and full-scale wars – increasingly murky resource geopolitics threatens to exacerbate existing tensions among Asian countries. Rising dependence on energy imports has already been used to rationalise an increased emphasis on maritime power, raising new concerns about sea-lane safety and vulnerability to supply disruptions. This partly explains the current tensions between China and Japan over their conflicting territorial claims to islands in the East China Sea, which occupy an area of only seven square kilometres but are surrounded by rich hydrocarbon reserves. Disputes in the South China Sea involving China and five of its neighbours, and in southern Asia, are equally resource-driven. While strategic competition for resources will continue to shape Asia’s security dynamics, the associated risks can be moderated if Asia’s leaders establish norms and institutions aimed at building rule-based cooperation. Unfortunately, little progress has been made in this area. For example, 53 of Asia’s 57 transnational river basins lack any water-sharing or cooperative arrangement. Indeed, Asia is one of only two continents, along with Africa, where regional integration has yet to take hold, largely because political and cultural diversity, together with historical animosities, have hindered institution-building. Strained political relations among most of Asia’s sub-regions make a region-wide security structure or more effective resource cooperation difficult to achieve. This could have significant implications for Asia’s ostensibly unstoppable rise – and thus for the West’s supposedly inevitable decline. After all, Asian economies cannot sustain their impressive economic growth without addressing their resource, environmental and security challenges – and no single country can do it alone.

135

COSTLY PAY-RISE POLICY

Civil servants will enjoy a pay increase of 6.06 percent this month. This year’s increase, like last year’s, comes into effect in May, since the government took its time deciding how much it should be. Under the watch of Chief Executive Edmund Ho Hau Wah, things were different: pay rises for civil servants were announced in the government’s annual policy address, in November, and came into effect the following January. The private sector used the amount of the civil service increase as the benchmark for their own pay rises, which usually take effect in January or around the Lunar New Year. The change in modus operandi by Chief Executive Fernando Chui Sai On’s government leaves employees of private companies worse off. They already have a hard time negotiating pay rises, and now they have lost an important bargaining chip – the government’s example. Meanwhile, the new arrangement makes life easier for bosses. Thank you, Mr Chui.

EMPTY WARNINGS

Several notable politicians are in the field, readying for this year’s elections for the Legislative Assembly. But the Electoral Affairs Committee has warned it will not tolerate campaigning outside the official campaign period. Oddly enough, the committee has yet to say what constitutes campaigning. Macau is still politically naïve. But an ad hoc supervisory body such as the Electoral Affairs Committee, set up just a few months before the elections and acting like a pit bull on steroids, is not what the city needs to improve political awareness. What is required is a full-time supervisory body that works continuously to persuade people to take part in elections and to vote responsibly. It should also make people more aware of their role in public affairs. Of course, few members of the elite are keen on this idea, preferring our present bread-and-circus kind of politics. After all, greater political awareness may rapidly lead to the people discovering that their voice counts for little in the existing system.

EAGER BEAVERS ON SPEED

Frozen Spy feels sorry for the director and deputy directors of the Public Administration and Civil Service Bureau. It seems they really have a lot on their hands – so much that they even need to take work home. Your correspondent cannot understand the fuss about them having super-fast fibre-optic Internet connections in their homes paid for by the government. The public should be thrilled that they are model civil servants, working tirelessly on our behalf. By the way, Chief Executive Fernando Chui Sai On, Frozen Spy usually pays parking tickets online. Since we tend to clock up an extreme amount, could we be eligible for free, fast, fibre Internet, too? The remainder of Macau might also appreciate high-speed Internet.

Jorge Neto Valente

Leonel Alves

POWER COUPLE

Spotted last month were two of the city’s most powerful lawyers, Jorge Neto Valente and Leonel Alves, dining at a top-notch restaurant with the “Diamonds Are Forever” soundtrack playing in the background. Mr Neto Valente is the managing director of Galaxy Casino SA, a subsidiary of Galaxy Entertainment Group Ltd that holds the company’s gaming concession. Mr Alves is Sands China Ltd’s outside legal adviser and a member of the Legislative Assembly. The power couple chose neutral ground for dinner: Wynn Macau’s Ristorante Il Teatro. The Frozen Spy accepts tips, particularly from anyone that might be able to read lips.

MAY 2013

136

May 2013

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