CONFIDENTIAL

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Local Macau residents have so far shown no interest in direct elections to the legislature to which the Organic Statute of Macau entitles them to. Those who have so far voted were in the main employees of casinos and other local organisations which had threatened them with dismissal if they failed to vote.

The vast majority of Chinese residents of Macau have little interest in and hence poor knowledge of local community leaders. I do not believe that the present state of affairs will be radically changed by 1999. elections as a device to identify the best men for the government can be discounted.

Direct

Macau has had functional elections to their legislative assembly ever since it was formed. If we disregard the Portuguese and the Macanese with hardly any exception, members so elected are from leftist associations. The trade unions - not at present a functional constituency - are also almost all leftists. All lawyers are either metropolitan Portuguese or Macanese. Hence functional elections as a device to identify the best persons for government is not likely to be effective either.

Of equal urgency are Macau representatives on the Basic Law Drafting Committee. If the Macanese are regarded as Portuguese (and it is clear they are) and on that ground excluded, the Macau representatives will almost without exception be leaders of leftist organisations, with a handful of Macau counterparts of Mr LI Ka-shing and Sir Y K Pao whose attendance at and contributions to meetings of the BLDC are likely to be equally exiguous. Macau needs representatives who must not only know what makes Macau tick but also be familiar with the present structure of government. A Macanese of Dr Carlos D'Assumpcao's stature would make an ideal candidate. His family goes back a century in Macau. It is in my view in HMG's interest to do 'what it can to ensure that Macau is ably represented on the BLDC.

Macau's total lack of an infrastructure for the formation of a special administrative region with a high degree of autonomy is a matter of some concern. Expatriate cannot be counted on remaining beyond 1999 if the Secretaries and Heads of Departments under whom they serve do not inspire their respect or confidence. The Macanese have worked under metropolitan Portuguese, though not without some resentment, since they came into existence following inter-marriages between metropolitan Portuguese and local inhabitants becoming a common practice. However, an increasing number of Macanese have by now bought homes in Portugal and there

CONFIDENTIAL

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