range of 2. 9 - 3. 2 % in the first 11 months of 2007 while inflationary pressure apparently intensified in the second half of 2007 and reached 5. 57 % for the whole year. 3. with an area of 28. 5 sq. km. and a population of about 530, 000, the burgeoning economy no doubt has put human resources and infrastructure under great strain. to maintain a sustainable growth, we have to overcome the bottleneck and diversify. to enhance the capacity of our development, the macao sar government has embarked on a number of infrastructural projects. internally, a light rail mass transit system will link up all essential spots in a few years. externally, the airport will be expanded while the hong kongzhuhai - macao bridge is on the drawboard. we have applied a number of incentive schemes to encourage our youths to acquire more knowledge so as to make preparation for a transformation to a knowledge - based economy. the most significant measure is the provision of 15 year free education to our kids. we are fully aware of our strong connections with mainland china and portuguese speaking countries and also our competitive edge in terms of comparatively low cost, quick and free flow of information, flexible business structure and low tax regime. we have fully exploited all these. thus macao has been able to benefit from the closer economic partnership agreement with the mainland and play a key role in platforms servicing portuguese speaking countries ; important economic bases of mainland china, particularly guangdong west ; and ethnic chinese merchants all over the world. we also realize that our tourism services industry needs non - gaming elements. ladies and gentlemen, you may take a break to tour around macao to appreciate macao as a metropolis which provides culture, entertainment, recreation, as well as convention and exhibition facilities to tourists and business visitors. 4. when we talk about diversification, we put the financial sector in our agenda as it accounts for about 10 % of our gdp. it is a high value - added, profitable and capital intensive industry which is most suited to an economic ecology like macao. the monetary authority of macao is the sole regulator of the financial sector, which is dominated by banks and insurance companies. at the moment, there are 28 banks operating in macao of which 3 are operating under offshore regime. in addition, there is a finance company with restricted banking activities and a non - bank credit institution which specializes in the issuance and management of electronic money stored value card service.

in 1996, amcm issued guidelines relating to aml to be complied by all credit institutions. these guidelines were revised in 2002 whereby they were edited into two sections. the scope of application was extended to include financial companies, financial intermediaries, money changers and cash remittance companies. meanwhile, aml guidelines applicable to insurance industry were issued in 2001. as the modes of crimes relating to money laundering and financing of terrorism are evolving all the time, the financial action task force on money laundering ( fatf ) modified the original text into 40 + 8 recommendations in 2003. one more was added in 2004 making it 40 + 9 which became the benchmark for aml / cft applicable to the international community. last year, in order to fully synchronize with the aml / cft legislations passed in 2006, amcm revised again its guidelines by taking into account the new international standards and the practical situation of macao in addition to in - depth review and consultation with industry practitioners. three sets of new guidelines were issued, “ aml / cft guidelines for financial institutions ”, “ aml / cft guidelines on large cash transactions ” and “ guidelines on aml / cft in insurance ”. in the process, amcm invited the international monetary fund ( imf ) to provide technical assistance. experts from the imf came to macao in 2004 and 2006 and provided expertise advice on our revised guidelines and on - site inspection which perfected our effort in supervision. simultaneously, amcm committed more resources internally for such purpose which included an internal aml / cft co - ordination working unit to strengthen co - ordination and planning of aml work. besides our continued effort to improve our capacity in this respect, amcm also provides training for the industry and relevant agencies in co - ordination and organization in order to enrich aml knowledge of the community and to impart the concept of prevention to the general public. on the other hand amcm proactively participates in the work of the trans - departmental aml working unit which was founded in 2001. before the inauguration of the financial intelligence office, amcm was responsible for general coordination with other government agencies including public prosecutions office, unitary police service, commission against corruption, legal affairs bureau, international law office, judicial police, macao customs service, economics services bureau, finance services bureau, gaming inspection and coordination bureau, macao trade and investment promotion institute, macao lawyers association, independent commission for the