May 03, 2007

You are on the invidual archive page of Macau riots. Click Simon World weblog for the main page.
Macau riots

Macau's Labour Day riots have at least achieved some measure of success: they've got people talking. There's plenty of advice streaming out of Hong Kong as to what the problem is and how to fix it, while newspaper editors give thanks to the protesters for filling many column inches. Jake van der Kamp in today's SCMP gives a concise summary (reproduced below the jump) of why ordinary Macanese workers felt pushed into rioting. And in all the reporting, at least in Hong Kong, there's just a hint of schadenfreude. For many years Macau has gathered the garlands while Hong Kong faced the brickbats...and one can sense the smug smirks in Hong Kong Government offices as they say "But that would never happen here..."

More interesting is this article in the (still gated, still the same old) SCMP which looks at the differing media responses in Macau and Hong Kong to the riots:

The media in Macau was more muted than their Hong Kong counterparts yesterday in their coverage of the Labour Day march in which police fire on protesters. While Hong Kong papers ran reports questioning the police's handling of the protest, Macau's focused on the force's insistence that opening fire was justified.

"It is down to a difference in culture," Chinese University political analyst Ivan Choy Chi-keung said. "Macau is a place dominated by pro-Beijing, pro-government people, and you can see many civil groups are set up and run by these people."

He said the disparity could be traced back to the 1960s - while Hong Kong's leftists were sidelined, those in Macau gained the upper hand. Mr Choy, who taught at the University of Macau in the early 1990s, noted that Hong Kong was a more open society.

"The big newspapers in Hong Kong are kind of anti-government - cynical about the government," he said. "The two biggest Macau newspapers, the Macau Daily News and Jornal Va Kio, are owned by pro-China people and in sympathy with the government."

Perversely, the Macau riots reveal an openly capitalist economy. Open immigration has kept wages down even though per capita GDP is shooting through the roof. Growing inequality has lead to resentment and anger that has spilled over to the streets. What is the solution? Some kind of redistribution of wealth to keep the poor quiet, for example through housing subsidies? That worked in Hong Kong. Or just wait and hope the trickle-down effect can override the downward pressure on wages from mainland immigration?

And most of all, are the right people watching? In many ways Macau is a microcosm of the large economic and social forces at play in China. The stresses of inequality, the impact of migration (in China's case, from the farm to the city), the discord between growing GDP and a lack of real wage growth, social order, corruption and more. They might hope it's an isolated incident, but Macau could well be China writ small, in more ways than one.


"Incensed by a lack of jobs and low pay while mainland labour floods in to drive Macau's casino boom - and accusing the government of corruption - the protesters mounted the most direct challenge yet to Chief Executive Edmund Ho Hau-wah, calling on him to step down."
SCMP, May 2

I cannot substantiate that bit about government corruption, although historically I don't think anyone ever bothered to do so in Macau. It has always been taken as a given. I can, however, substantiate the complaints about low pay and immigrant labour.

Pardon me if you remember seeing the first chart here only a short while ago in this column but when a chart makes a strong point I think it worth repeating. It is certainly worth repeating in the context of the so-called riots in Macau. This is a town that operates on a fascist economy and Macanese workers have reason to protest.

The red line in the chart represents Macau's gross domestic product per capita in pataca of the day terms. It is shown here as an index with a base of 100 for December 1999, the month of the handover to Chinese sovereignty. Since that time, GDP per capita in Macau has more than doubled.

Now look at the blue line. It represents pay for workers in Macau's gambling dens. There is no doubling here. Using that same index base of 100 for December 1999, these people were paid 138.20 at the end of 2006, seven years later.

This works out to a compound average gain of less than 5 per cent a year, which is not much when you remember that these pay figures are expressed in pataca of the day terms, which are not adjusted for inflation, and inflation in Macau is now running at 5 per cent a year. But gambling workers are among the best paid workers in Macau. Look at the green line. It represents the average pay of service and sales workers and this, over the seven years of Macau's existence as a special administrative region, has gone from 100 to only 113.7, a compound average gain of less than 2 per cent a year.

Macau's economy has grown rich. Macau's workers have not. The money has gone elsewhere, mostly into the pockets of casino operators, although others undoubtedly also benefited. I think it safe to assume that the operative rule here required only that the money go into pockets that were already well-filled, as I say, a fascist economy.

This obviously leaves you with a question, however. In normal circumstances any economy that has boomed as much as Macau's has done would soon encounter a shortage of workers and wages would rocket up as employers competed for the few idle hands left to employ. Why has this not happened in Macau?

The second chart gives you the answer to this question. Macau just imported the workers, mostly from the mainland but also quite substantially from Hong Kong, which seems unusual but I suppose was done to get English-speaking hotel staff.

Over the past two years alone, the proportion of non-resident workers on the employment rolls has doubled from 12 per cent to 24 per cent. Over that period, 57,000 new jobs were created in Macau, quite an achievement from a base of 229,000 jobs.

Three-quarters of these new jobs, however, were filled by immigrant workers.

Take note here also that we are talking only of declared foreign workers. I am far from confident that all non-Macanese workers declared themselves. The immigrant effect is almost certainly even greater than the figures suggest.

And undoubtedly this did a great deal to keep wages down. That's why I think it can be taken as no surprise that Macanese workers staged a protest on Labour Day. It could even have been enough to make them riot. But they didn't really. It was Macau's police who came closer to doing that.

posted by Simon on 05.03.07 at 10:43 AM in the Macau category.


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When is the SCMP's webpage supposed to be updated? I thought that was already supposed to have occurred by now?

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