Written by Bill Chou.

Macao used to be a better showcase than Hong Kong for demonstrating the success of the “One-Country Two-Systems” policy. In particular, Macao’s economy is robust after the liberalization of the casino industry in 2002. Political opposition is weak. Macao people identify strongly with Chinese culture and, more importantly, the political regime of China. Nevertheless, the public perception of the performance of the Macao government and the Chief Executive are deteriorating. Governance centered on GDP growth, political co-optation, and limited citizen participation cannot prevent a legitimacy crisis.

In Hong Kong, the pro-Beijing loyalists were loathed by the public after a riot in 1967, an overspill from the Cultural Revolution tha was engulfing the mainland. Chinese influence was contained by the British administration which vigilantly safeguarded their autonomy. On the contrary, Macao’s loyalists overwhelmed the Portuguese administration in a similar riot in 1966. Macao’s loyalists were able to expand their influence to various social segments. Consequently, civil society is pro-Beijing in their outlook in general and the public’s identification with China is higher than with Macao. Local identity is never vigorously promoted by Macao’s schools or mass media. With a weak sense of local identity, the public do not strongly feel the need to defend Macao’s way of life and autonomy against the influence of China. The Portuguese administration was very cooperative with Beijing after the socialist-led 1974 Carnation Revolution in Portugal. In Macao, the Chinese government had a bigger say in the making of government policies.

Macao’s casino-based economy has been propelled by the influx of capital into casinos and related industries. The GDP per capita is among the world’s top ten and the second highest in Asia, after Qatar. The unemployment rate has dropped to below 2% and the roaring economy has generated huge fiscal reserves for the Macao government. In 2013, its actual expenditure accounted for less than one half of the revenue even though the government raised the welfare expenditure substantially. Being so resource-rich, the government can buy the support of political and social elites through lucrative government contracts, subsidies to social organizations, and numerous pro-business policies. Social leaders are co-opted into the decision-making and consultative organs of the governments of China and Macao. Electoral politics is limited to the Legislative Assembly composed of members appointed by the Chief Executive, indirectly elected by the leaders of social organizations, and directly elected by the citizens. The first two categories of members are not responsible to the general public. They account for more than one half of the seats. Checks and balances on the executive branch is therefore inadequate. The supervisory function of the Legislative Assembly is further undercut by the weak political opposition: In Legislative Assembly elections, the Democrats (or political opposition) grossed only 30% of total votes at most. In 2013 elections, they could only seize 4 out of total 33 seats.

There is one similarity between Macao and Hong Kong. The economic prosperity and political cooptation cannot sustain the popularity of the government and the Chief Executive. Various opinion polls, commissioned by institutes of different political orientations, find growing public discontent with the performance of the Macao government and Chief Executive. More alarmingly, Macao people have started to identify less with China than Macao. Their trust in the one-country two-systems policy and Macao’s future dropped to the lowest point after 1999, in the shadow of the Asian financial crisis and the hesitation of casino-goers to gamble in Macao due to turf wars among gangsters of different factions and the low confidence of consumers and investors in general. The paradox of an ever-expanding economy and the low trust in the government indicated the public’s negative view of economic prosperity and its social costs. Moreover, the public resentment spreads to the central government of China, the patron of the Macao government.

What’s more, Macao’s corruption problem has become worse, as has the index of government size and regulatory efficiency according to the 2013 economic freedom score compiled by Heritage Foundation. The legitimacy crisis of the Macao government lies in its political institutions: Without a liberal democratic system, Macao has been turned into a plutocracy. Political power is concentrated in the hands of a few rich families who are co-opted by the central government of China. Cronyism and patronage have resulted: Casino concessionaires and property developers are granted land at prices below the market level whilst the average citizens are burdened with the skyrocketing residential prices fueled by the economic growth. The privileged businesspeople are allowed to recruit cheap migrant workers, while small proprietors struggle to compete for increasingly costly local workers. The working class and middle class disproportionately suffer the social costs of economic prosperity such as rising living cost, serious traffic congestions, and over-crowdedness resulting from the influx of mainland Chinese visitors.

The economic development of Taiwan and South Korea in the 1970s and 1980s has given rise to a middle class and a strengthened political opposition, which eventually overthrew authoritarian rules. Macao can hardly follow the same trajectory: China is the primary stumbling block for the democratization in Macao and Hong Kong. Electoral politics is plagued by vote buying orchestrated by the emerging pro-establishment social organizations whose leaders are beneficiaries of economic boom. They have accumulated huge wealth to hand out cash to their supporters. Other emerging but less resourceful pro-establishment social organizations may compete with the political opposition for public support through criticizing the government’s policy failure but refraining from challenging its allies and the political institutions. The support base of the political opposition is further eroded by widespread media censorship which plays down the news favourable to political opposition.

The current Chief Executive Chui Sai On will run for his second term of office in the second half of this year. His biggest challenge is not the political opposition, but Chinese leaders whose trust and patience with him are being undermined.

Bill Chou is Associate Professor of Political Science at the University of Macau.