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The Sino-Portuguese Joint Declaration and the Basic Law, Macau's constitution promulgated by China's National People's Congress in 1993, specify that Macau's social and economic system, lifestyle, rights, and freedoms are to remain unchanged for at least 50 years after the transfer of sovereignty to China in 1999. Under the principle of "one country, two systems", Macau enjoys a high degree of autonomy in all areas except in defence and foreign affairs. Macau officials, rather than PRC officials, run Macau through the exercise of separate executive, legislative, and judicial powers, as well as the right to final adjudication. Macau maintains its own separate currency, customs territory, immigration and border controls, and police force.

The government in Macau is headed by the chief executive, who is appointed by the central government upon the recommendation of an election committee, whose three hundred members are nominated by corporate and community bodies. The recommendation is made by an election within the committee. The chief executive's cabinet is made up of five policy secretaries and is advised by the Executive Council that has between seven and eleven members. Edmund Ho Hau Wah, a community leader and former banker, was the first chief executive of the Macau SAR, replacing General Vasco Rocha Vieira at midnight on December 20, 1999. Fernando Chui Sai On is the current Chief Executive. The chief executive and the cabinet have their offices in the Macau Government Headquarters, located in the former area of the St. Lawrence Parish.

The legislative organ of the territory is the Legislative Assembly, a 29-member body comprising 12 directly elected members, ten indirectly elected members representing functional constituencies and seven members appointed by the chief executive. Any permanent residents at or over 18 years of age are eligible to vote in direct elections. Indirect election is limited to organizations registered as "corporate voters" and a 300-member election committee drawn from broad regional groupings, municipal organizations, and central government bodies. The original framework of the legal system, based largely on Portuguese law or Portuguese civil law system, was preserved after 1999. The territory has its own independent judicial system with a high court. Judges are selected by a committee and appointed by the chief executive. Foreign judges may serve on the courts.

Macau has a three-tier court system: the Court of the First Instance, the Court of the Second Instance and the Court of Final Appeal. In February 2009, the Legislative Assembly passed a security bill based on the withdrawn security legislation previously introduced in Hong Kong. Democracy advocates feared that the bill's excessively broad scope could lead to abuses, a concern which has been heightened after a number of prominent supporters of democracy in Hong Kong were denied entry into Macau in the run-up to the bill's passage.

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