Introduction

Abstract

Macao has experienced spectacular economic growth since it returned to Chinese rule in 1999. Following double-digit rates of economic growth between 2002 and 2013, Macao has become one of the wealthiest regions in Asia, with its GDP per capita rising from USD$ 14,258 in 2001 to USD$ 89,333 in 2014.¹ At the end of 2013, Macao had fiscal reserves of 168.9 billion patacas, an increase of 68.66 billion over the previous year, and foreign reserves of 128.95 billion patacas. Macao’s prosperity over the past decade can be largely attributed to the government’s decision to liberalize the casino industry in 2002 and the Chinese central government’s facilitation of individual travel (FIT) scheme implemented in 2003. The subsequent internationalization of the casino industry has transformed Macao from a small trading economy to one largely based on gaming and tourism. However, it has made the casino industry the sole pillar of the local economy, overshadowing all other economic sectors. The increasing dependence on the casino industry has also made Macao’s economy highly vulnerable and difficult to sustain. Although the government has made efforts to diversify the structure of Macao’s economy, the existing policies appear to be ineffective.