For residents, these qualities are an important source of their long-standing pride and sense of independence. But over the last decade, the local community has been riven with divisions concerning plans to introduce casinos as a cure-all for the region's economic ills. "Penghu's greatest asset is its living environment. We want more people to experience this beauty," Hung Tung-lin, director of Penghu County Government's Tourism Department, said Jan. 22.
Hung explained that the gaming business combined with foreign investment lured by casino and resort development is likely to put Penghu, also known as the Pescadores, on the international tourism map. "For five months a year, the wind stops all tourism," he said. "This new strategy gives the area's economy a fighting chance." Official statistics showed that Penghu, with a population of 92,000, welcomed 500,000 visitors last year, mostly from Taiwan proper.
The introduction of casinos was first mooted in the early 1980s when legislators began reviewing a draft of the Isolated Islands Construction Act. The goal was to develop tourist casinos on offshore islands as a way of boosting local economies. A first draft included the stipulation permitting Taiwan's local governments to designate special zones for gambling tourism. Demonstrating remarkable foresight in 1993, Penghu's former New Party Legislator Chen Kwei-miew proposed that revenue be channeled into a construction fund earmarked for future developments.
Over the past 10 years, various casino proposals have been floated but were all shot down following heated debate and allegations of vested interests. This did not deter Penghu's lawmakers and county commissioners from pursuing the idea though. Their mantra of "casinos will help put tourism first," as coined by Penghu County Commissioner Wang Chien-fa, was aimed at dispelling concerns over the rise of casino-associated problems, such as organized crime, drugs and vice, which would impact Penghu's peaceful living environment.
Since 1996, Chen's successor, Kuomintang Legislator Lin Pin-kuan, has been an outspoken proponent of developing Penghu's gaming business. So committed was he to this belief that in 1998, incensed by the opposition of then Premier Vincent Siew and the KMT leadership's stance against decriminalizing gambling, he resigned from the party.
But after the KMT took office in May 2008, the party underwent a dramatic turnaround on the issue. In August that year, Premier Liu Chao-shiuan instructed the Council for Economic Planning and Development to push for a bill amending the Isolated Islands Construction Act. This would allow gambling in designated places, and was seen as key component of President Ma Ying-jeou's campaign promise to develop the country's offshore islands.
When the amendment finally passed its third reading in the Legislature Jan. 12, Lin--now a Non-Partisan Solidarity Union lawmaker--beamed with joy that his 13-year odyssey was at an end. The amendment lifts a ban on gambling and allows casinos to be built within integrated resorts on Taiwan's outlying islands. The only catch is that local residents must first approve the development via referenda.
Surprisingly, the country's Referendum Act, which requires more than half of all eligible voters to support a proposal before it can be adopted, does not apply to these polls. If a casino proposal passes the 50-percent threshold of votes cast, this is now enough to greenlight the project.
In addition, the amendment does not specify related measures as to the license fee, taxation and distribution of revenues, which were in Lin's original proposal, and the CEPD has not submitted a plan to draw them up. By the end of this month, the Cabinet will designate an agency responsible for drafting rules concerning casino licenses, such as the application procedure and approval criteria.
Following the bill's third reading, Wang revealed that the Penghu County Government had set aside 120 hectares of land in Baisha and Huxi districts for potential development, hoping to attract NT$33.75 billion (US$1 billion) of investment and create 10,000 new jobs. The county commissioner believes that after tourist casinos open their doors, the island will attract around 5 million visitors a year, generating NT$3.75 billion in revenue. He estimates that 60 percent of this revenue, supplemented by average visitor spending of NT$5,000, will see Penghu rake in NT$2.25 billion per annum.
Several investors are already looking like safe bets to share in the casino's revenue, most notably, the Isle of Man-based property development company Amazing Holdings PLC. The company began acquiring land for its 500-room five-star Penghu resort in May 1999, and by September 2003, had effectively secured its 26-hectare site after signing a revised purchase agreement with landowners. In August 2007, the final parcel of land was transacted and the purchase process completed.
With AMZ Holdings set to build Taiwan's first casino, there are concerns among Penghu residents that the developer is more interested in short-term profits than the region's long-term development. It is no secret that AMZ Holdings has long hungered to get a slice of the US$100 million that Taiwan's baccarat players reportedly wager in Las Vegas each year. And by building a Singaporean-modeled integrated resort, the developer believes it can attract Taiwan's gamblers all year round.
With the company's target market appearing to differ enormously from what the central and local administrations have in mind, the onus will be on the government to minimize a potential over-reliance on local punters. CEPD Minister Chen Tain-jy previously suggested there would be a limit on the number of Taiwanese allowed to enter the casino. "We are not creating a casino industry, but tourist casinos in certain areas," he said.
But not every one in Penghu believes the rosy picture painted by the central and local governments about casinos and their economic benefits. Lin Chang-hsin, a Penghu resident, asked: "Is Penghu ready to cope with the government's 'estimated' 5-million visitors a year?" With the figure 10 times in excess of the region's current level, many are concerned that existing water, electricity, waste management and transportation systems will collapse under this additional load.
Officials believe that casino-based development will bring about infrastructure improvements to the island group, which is located at the geographic center of East Asia's major cities. Wang said proceeds from casinos would help Penghu stand on its own two feet economically, rather than relying on central government funds.
Lin had repeatedly argued, as in the Jan. 12 legislative session: "Those opposed to casinos do not understand the plights and needs of people living on the outlying islands." He explained that while the new amendment permits casinos to be only a small part of an integrated resort, they still represent a huge opportunity for Taiwan's neglected outlying islands.
Some citizens suspect, however, that politicians have been exploiting the relatively slow economic development of regions such as Penghu. By cashing in on residents' feelings of being marginalized by the central government, they have been able to justify their drive for the quick buck gaming industry, as opposed to pursuing sustainable development plans.
Lin Chang-hsin argues that the local government has wasted the past 10 years, which could have been used to develop the region's existing environment and cultural assets for the benefit of the local and national tourism industries. He also claims that the Isolated Islands Construction Fund--established in 2001 with NT$30 billion to help meet the outlying islands' infrastructure needs over 10 years--was not put to effective use on Penghu.
"First they built harbors, then came wave-damping blocks, and then they used money to maintain harbors and cement works," Lin said. "It's a case of literally throwing money into the sea, while destroying Penghu's natural surroundings and ecosystems."
Lin organizes bird-watching tours to the region's less-visited islets during summers and is working with academics to push for designating Penghu as a Taiwanese geopark, featuring its famous basalt columns that experts believe are on par with Northern Ireland's top tourist attraction, the Giant's Causeway.
While tourism officials argue that a casino will help supplement Penghu's tourism industry, Lin believes this assertion is out of sync with the region. "We are exceptionally blessed with various resources, not to mention generous funding from the central government," he said. "Penghu does not need a casino, nor can it afford having one. It's time for residents to think very clearly about the future of our county."
Write to June Tsai at june@mail.gio.gov.tw