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1. Macao SAR has been hit hard by the COVID-19 crisis, but the strong policy response helped contain the spread of the virus and soften its economic impact.1 Strict containment and border control measures helped preserve people’s health and safety. Macao SAR has reported only 79 confirmed COVID-19 cases and no deaths as of February 15, 2022. Deploying its large fiscal reserves, the government helped stabilize employment and consumption with fiscal stimulus amounting to about 12 percent of GDP in 2020–21.
This chapter evaluates whether Macao SAR’s current labor market meets the skills demand of the four sectors targeted by the government’s diversification strategy. Analysis based on the overall and sectoral occupational composition suggests that sectors targeted by the government’s diversification strategy demand high-skilled labor, while Macao SAR’s current labor market mainly comprises low and middle-skill-requiring occupations. This indicates a need for skill upgrading to bridge skill gaps. Further estimates show that overcoming the skills mismatch to achieve occupational labor mobility is costly and takes time. These findings underscore the need for Macao SAR to undertake labor market reform to nurture and attract talents.
The Macao SAR government aims to develop a modern financial sector, and some progress has already been made. This chapter evaluates structural factors conducive to the development of financial hubs and studies the experience of the already established financial centers to draw lessons for Macao SAR. The analysis suggests that to further advance Macao SAR’s financial sector development, policies should focus on addressing the limited availability of skilled labor, closing the gaps in physical and ICT infrastructure, enhancing the efficiency of public institutions, and improving the business environment.
PEOPLE’S REPUBLIC OF CHINA—MACAO SPECIAL ADMINISTRATIVE REGION