Macau gov’t integrity falls to lowest level on record

The integrity of the Macau government has fallen below world averages to hit its worst level in over a decade, according to the Heritage Foundation’s 2018 Report on the Index of Economic Freedom.

Macau dropped to 36.4 percent on the Heritage Foundation’s index score for government integrity, falling below that of mainland China (47.3 percent) for the second year since data was collected on the SAR in 2009.

According to the organization’s classification system, a score of above 60 represents a level of “moderately free” economic activity, while between 50 and 60 is considered “mostly unfree” and below 50 is considered “repressed”.

The highest score Macau has ever held on the index is 57, recorded in 2009, the year that Chui Sai On was first elected. It has since been in a state of deterioration – halting at 49.7 between 2014 and 2016 – before plummeting to 37.1 last year and 36.4 this year.

In contrast, the Heritage Foundation has recorded an improvement in its assessment of the Chinese government’s integrity, which has steadily risen since the mid-1990s and today stands at 47.3 percent.

2018 is the second year in which the MSAR government has held a lower integrity rating than the government of mainland China.

In other areas concerning the rule of law, Macau recorded 60 for both property rights and judicial effectiveness, with the Heritage Foundation noting that “private ownership of property and contractual rights are well established,” as “there are no restrictions on foreign property ownership” and “Macau has its own judicial system with a High Court [and a] legal framework based largely on Portuguese law.”

On the other hand, the report praised Macau for its continual protection of economic freedoms – notably trading freedom (90), investment freedom (85) and financial freedom (70), all of which were well above world averages.

Macau also remains strong in tax burden (75.3), government spending (91) and fiscal health (100), for which it is at world average level or higher in each category.

In terms of regulatory efficiency, Macau continues to post mixed results with no year-on-year change recorded in business freedom (60) and labor freedom (50), but a 2.8 percentage point rise in monetary freedom (73.6).

According to the Heritage Foundation, the overall tax burden is approximately equal to 28.3 percent of total domestic income, while government spending amounts to just 17.4 percent, leaving a budget surplus of 14.7 percent. Macau has no public debt.

The report’s economic findings were publicized by the Monetary Authority of Macao in a statement published at the end of last week. However, neither the Monetary Authority nor any other government department has yet addressed the rule of law indicators, showing the deterioration in political freedom.

The Report on the Index of Economic Freedom assesses the degree of economic freedom in most of the world’s individual jurisdictions based on 12 attributes. This year, Macau was awarded a general score of 70.9, up 0.2 percentage points, and significantly higher than the regional average of 61.0 and the world average of 61.1. It ranked ninth among 43 countries in the Asia-Pacific region and 34th in the world.