Macau Institute of Management (MIM) President Samuel Tong Kai Chung told The Macau Post Daily yesterday that the government has launched another “timely” economic support scheme in response to the COVID-19 menace.
Tong made the remarks in an exclusive interview with The Macau Post Daily at the MIM office in Zape.
Tong stressed that in order to comment on the effectiveness of the scheme, one must understand the economic background when it was implemented and its aim, as well as look at the scheme as a whole.
‘L shaped economic growth’
Tong pointed out that Macau relies heavily on the external demand economy captured by exports of goods and services. He added that, therefore, before the proliferation of vaccinations and the lifting of travel bans, the best thing the local government could do was to ease the current economic pressure.
Tong noted that Macau’s novel coronavirus pandemic situation is under control and the economic pressure is not as much as it was when the government released its first two rounds of financial support.
According to Tong, the economic situation has recovered a bit, adding that the number of visitors now stands at 20,000 to 30,000 per day but it would not reach the same numbers as 2019 “anytime soon”. He called this “L-shaped economic growth”, meaning that after the drastic drop in the second quarter last year, Macau economic recovery would be slow and moderate.
Tong pointed out that before the complete recovery of the tourism industry, the aim of the government’s economic support scheme should be to ease the current pressure.
Tong said that the government bringing forward the payout of its wealth-sharing handout could help people who need immediate financial relief. He added that the 10,000 pataca wealth-sharing handout could also encourage spending, while the government’s voucher scheme would encourage a second and third round of consumption.
While permanent residents will receive a cash handout of 10,000 patacas, non-permanent residents will get 6,000 patacas.
Tong also said that the government’s local tour and hotel subsidy would help tourism industry employees maintain their skills. He also pointed out that encouraging local people to experience their city’s tourism side would help give the sector a boost because staycationers could promote local hotels’ quality service by word of mouth.
Tong also said that the third part of the scheme, which consists of a vocational training upgrade, could help jobless residents make some money while picking up new skills. He underlined that vocational training helps human capital avoid depreciation during the COVID-19 pandemic.
Participants in the training programmes will be entitled to a 5,000 pataca cash allowance.
Change of spending habits
Tong said that the novel coronavirus pandemic has altered consumers’ spending habits, such as people are spending their money more carefully due to unforeseeable circumstances, apart from the popularisation of e-payment. He added that the change in spending habits would not go away when the pandemic is over.
According to Tong, the government has been helping local businesses adapt to consumers’ new spending habits. He underlined that the government is gradually cooperating with Macau’s different e-payment platforms to encourage businesses to transit to the new consumer spending and payment habits.
When asked whether the government should extend the vouchers’ validity period, Tong said it was “too soon” to comment. He said that the government should have an assessment half-way through the scheme and make adjustments along the way.
Tong said that the government had already taken into account elderly residents’ needs by launching a special benefit for them to ease their spending habit into the new e-payment world, whereas for children the government should think of a way so that they could “share a piece of the pie” as well.
Tong acknowledged that Bank of China (BOC) and Macau Pass are trying to make e-payment more accessible to children. He suggested that the government should think of a way so that all age groups can equally enjoy the new voucher scheme.
2 pieces of advice for businesses
Asked by The Macau Post Daily whether the voucher scheme would push up the inflation rate, Tong gave two pieces of advice to businesses.
“First, I urge local businesses to cooperate with the government’s voucher scheme and also launch their own promotions to help encourage local consumption. Secondly, I hope local businesses would take on some social responsibility and not abuse the system by raising the price of goods and services,” Tong said.
Many residents have voiced their concern over the monthly and daily limit of the voucher system. Tong said as a resident, he would, of course, like to get more money. However, he added, people should understand that the government used a lot of money from the public coffers last year to launch the first two rounds of economic support schemes. He pointed out that the government needed to make decision wisely to sustain the local economy.
Policies tailored to specific groups
Tong emphasised that the COVID-19 pandemic lasted longer than anyone expected. He said the government could have launched schemes for people who are unable to enjoy the voucher or subsidy scheme. He gave an example: people who cannot afford to spend much in the first place to enjoy the voucher scheme, adding that the government should also implement tailor-made policies to help people who are in serious financial trouble because of the pandemic.
Transition period
Tong commented that the Macau government performed “decently” during the COVID-19 pandemic. He said that “even though internal circulation couldn’t help Macau’s economy return to its situation in 2019 but it can help many local businesses get through the transition period between the worst time during the pandemic and once the local economy has fully recovered”.
Macau Institute of Management (MIM) President Samuel Tong Kai Chung poses at his office at the Macau Chamber of Commerce Building in Zape in January. Photo: Prisca Tang
