Wednesday, October 10, 2007

Macau People can't make it!!!

The economy is growing at double digits. Company profits at record highs. Property prices smashing new records. Demand for workers is so high, the workers have to be imported from China. Yet people are unhappy and protesting on the streets.

What are these people complaining about anyway? Cost of living? They have to accept that their city is a globalised one and things are priced based on global demand and supply. There is this nice theory in International Economics called Factor Price Equalisation Theorem. Macau is an open economy. Its payment to factors - wages, rents etc - are set by international price. So why are these people protesting against price increases when they are getting what they deserve in a globalised market place. Obviously they haven't attended economics 101 and cannot see that all this is just a natural consequence of globalisation.

They are complaining that workers from China keep their wages down. This again is an absurd accusation against their govt. As we know in Singapore wages are set by international price based on marginal return. If wages are allowed to inflate, businesses will move to China. Like in Singapore office rentals, govt services, utilities, transport etc can inflate but wage inflation is a no-no.....they too have to import Chinese labor to prevent this wage inflation.

Looks like the Macau people cannot make it in their globalised city. Singapore is following Macau's foot-steps in the building of casinos and keeping the economy open in a globalised world. Singaporeans understand globalisation much better then these protestors in Macau thanks to our media that has explained thoroughly all its wonderful benefits. As long as Singaporeans work harder, longer and take all the prices increases in good spirit, our esteemed govt can embrace globalisation for the good of the ordinary citizens.

MACAU'S casinos are the richest in the world - the 23 casinos in the city made a whopping US$6.87billion ($10.1b) last year, more than Las Vegas casinos did.

More than 1,000 people protested that day. -- -->Pictures: AFP, REUTERS -->

But not everyone in the territory is benefiting and that has sparked discontent among its residents, reported the International Herald Tribune.
'The government tells us the casino boom is bringing wealth to Macau,' said Jose Pereira Coutinho, a deputy in the Legislative Assembly.
'That is not true, because this wealth is only for a few.
'It is not helping people who are suffering.'
For the first time on 1 Oct, China's National Day, hundreds protested in the streets.
Their grievances ranged from harsh new penalties for illegal parking of motorcycles, to government corruption and the use of illegal labour.
There was also a protest in May and another demonstration is expected at the end of the year, during the anniversary of Macau's handover to China.

A protester in Macau on 1 Oct, China's National Day.
Many Macanese complain about workers from China who are keeping wages down.
They are also unhappy about the rising cost of living, especially the rents in working-class areas.
Those who benefit most from gambling are the 45,000 people working in casinos - their average earnings rose almost 15 per cent in the past year.
But for others, opportunities and incomes have worsened.
Many earn less than a quarter of the wages of a casino card dealer.
Said political science lecturer Eilo Yu: 'The society is developing in Macau and starting to mobilise... In the long run, people will keep on challenging the government.'


Corriflute said...

Hi Lucky,

Do you like the song 'Imagine' by John Lennon? In it he describe a world with no religion, no heaven, no hell below us, no countries, nothing to kill or die for, no greed nor hunger, best part of all living in a brotherhood of man, sharing all the world.

When I first heard that song, I was like, wow! This guy sees the future man! And like a few years later some wacko shot him in the head. Yeah... He decided to died.

That said, your globalised world with factor price equalisation theorem would probably look and feel like that way. All you need to do is imagine. :D

For the time being, I feel the Big Mac index holds more truth in measuring parity.

Anonymous said...

What is "factor price equalisation theorem" and what is "Big Mac index" and "parity".

Hey me got only primary 3 education, don't confuse me.

All me know is in Singapore there is only PAP index for the major expenditures like housing, food, transport and all these are fixed by PAP.

Housing : HDB flats selling between $170,000 to $250,000 for 3 and 4 room flats respectively. If you buy "green" flats may be more.

Hey heavily subsidized by PAP hor. So be happy.

Food : Go take a walk in PAP's prime location NTUC Fairprice outlets please and you will know how far more expensive the vegetables and meat are compared to other outlets.

Transport : COEs, traffic fines, road taxes, ERP ... you also should know.

What Big Mac index; it is all PAP index.

Wake up!

Anonymous said...

It's all about globalisation. Very soon, doctors from Mainland China, India and Sri Lanka will be treating us. Maybe the PAP have decided that our own NUS medics cannot make it. So must aspire to have a health system like in India and Sri Lanka. Time to brush up on my Tamil.

Corriflute said...

Hi to the guy who only had a primary three education, I'm sorry our fine education system failed you.

The reason I suggested similarity with John Lennon's song is to show the assumptions necessary for to prove FPET...

I cite David Gowland's book, Internation Economics, pg 20, for reference.

Incidentally, Mr Gowland is a professor of econimics in a third rate UK university.

And, if you like freebies like me, I refer you to Google books to flip through the pages.

At most one can argue, FPET tends toward equalisation...

And what better showcase to present this argument than to use the Big Mac index, in Lennon's world, you would be paying the same price for every Big Mac you brought, as what FPET prescribe.

Anonymous said...

corriflute, you still don't get it do you, talking about John Lennon, Big Mac Index, FPET. This is blog not your lecture hall.

Get to the point.

You're pathetic.