How Macau's 1+4 Strategy Will Bring the City to New Heights this Decade
In anticipation of the revival of Macau’s economy and image in the wake of the pandemic, Macau’s Chief Executive, Ho lat Seng, uttered in his 2023 Policy Address in mid-November a new initiative to commit the SAR government to a new five-year plan on boosting the economy and promoting steady development of the city.
In his press conference on a rainy November day, CE Seng introduced the 1+4 strategy, the basis of the Plan for Moderate Economic Diversification of Macau's SAR (2024 - 2028), to diversify the city's economic dependence on the gaming industry and introduce investment in other spaces.
The five-year economic blueprint was designed not only to enrich Macau's function as "One Centre" for integrated tourism and leisure, but also to facilitate the development of four nascent industries: Big Health industry, modern financial services, high technology, and expanding the city’s MICE sector to culture and sports.
Chief Executive Ho lat Seng, alongside the MSAR and mainland, wants to be bold and brash by redefining Macau for business and pleasure. The government aims to increase the non-gaming sector's contribution to Macau's gross domestic product to about 60% in the future.
To diversify an entire society dedicated to a single venture for decades is a challenging task. It requires structural reforms, reallocation of existing production factors, and significant investment in creating or attracting new resources where these are lacking.
Importantly, a diversification strategy should consider the specific circumstances and comparative advantages (and disadvantages) of existing social and economic structures.
The government aims to strengthen cross-industry collaboration to diversify its economy. By adopting a “1+4” strategy, the government devotes sustained efforts to make Macau a “World Centre of Tourism and Leisure,” with emphasis on developing the health, finance, technology, MICE, culture, and sports sectors.
The "1" in the "1+4" formula is therefore the key. The repositioning of the tourism industry is the most efficient path towards a more sustainable and diverse economy. With the mandate given to casino operators under the new concession contracts introduced in early 2023, Macau's largest employers are now committed to this goal.
They are developing entertainment and tourism attractions, promoting an active and diverse MICE industry, creating a destination that can attract tourists from other source markets, and digitising IR experiences. These are all goals within reach and can be achieved by building upon Macau's private sector, existing infrastructure, and talent.
Macau's strategy of diversifying its economy is a crucial step towards a more sustainable future. The city's dependence on the gaming industry has left it vulnerable to economic downturns and changes in consumer preferences.
The 1+4 strategy will help Macau's economy become more resilient and less dependent on any industry. By developing new sectors, Macau can attract new businesses, create new jobs, and become more competitive on the global stage.
It is a bold plan, but could pay off. By diversifying its economy and developing new sectors, Macau can become a more sustainable and competitive city. With the commitment of the city's largest employers and the government's sustained efforts, Macau's vision of becoming a “World Centre of Tourism and Leisure” may become a reality.
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