by prominent Qatari intellect Dr. Lulwa Abdulla Al- Misned
Moral Grounds of Public Policy Design, Disseminate it!
Fuel products prices have been raised lately in the Qatari market within a range of 25% to 48%. This increase will be reflected in higher transportation cost and higher energy cost for infant industries in the local economy, and will implicitly raise all other prices. The inelastic nature of the demand for such commodities will reflect on higher revenue receipt for the relevant entity, if you fuel your car by spending around 80 QAR before the raise you still be willing to pay 130 QAR, you will not cut short your trips around Doha, Khor or Wakra. But the economy overall net benefit of this raise needs to be measured. We don’t really know the magnitude of the impact of this increase on the local inflation rate. The institutional ownership of measuring and publishing macroeconomic indicators is not defined. Moreover the institutional ownership of economic policy design and the philosophy of such design is unclear. I had been asked recently by one serious observer of Qatari public policy on the way Qatar will handle its external debt that mount to a figure getting closer to one hundred billion US dollars. As to IMF report, the external borrowing has doubled since 2008. My response was that he should address his question to the ministers or the technocrats who are cooking and preparing recipes in the economic policy kitchen.
Why were fuel prices raised and how would this reflect on the overall economy? What is the real magnitude of external debt? And how is this debt measured in relation to other indicators such as Qatari foreign investment, local infrastructure investments, the Gross Domestic Product (GDP), and the inter-generational distribution of national wealth? What are the different scenarios of medium and long term hydrocarbon prices, especially gas prices, and how would they reflect on the utilization of LNG production capacity and on other debt related or investment related issues? What is the rate of return on educational spending? Would the philosophy of supply create its own demand in the higher education sector, would it provide a suitable philosophy for our context or do we have to import demand from abroad to satisfy the growth of highly priced foreign universities , and how this would reflect back on other sectors of the economy? And if we follow the same philosophy in other sectors of the economy would this lead us to Qatari societal erosion? What is the real impact on demographics and how would it reflect back by creating more supply bottlenecks? We would need to increase hospitals, schools, roads, etc. What is the environmental impact of growth? If this impact is measured in monetary terms and internalized in project feasibilities would we change some major decisions? What is the magnitude of economic and social opportunities created by the 2022 World Cup hosting? And what are the relevant economic and social costs? Then what are the net benefits?
To answer such questions we do not need a technocrat’s or minister’s over-simplistic narration in media circles. Such narration says half of the truth and in many times it is counterproductive even for sound policy initiatives that seems obscure to the public. What we actually need is macroeconomic formulation and modeling independent of those who execute public policy; an honest and serious study of all the interrelated issues. However, this is not all, a prerequisite of such modeling is the question of the moral behind any policy. Any policy cannot be judged without this knowledge at the beginning of economic and societal policy design.
Fuels are not the only commodities subsidized in the Qatari market, and such subsidies were created for a reason. One subsidy is free electricity and water for the Qataris and where the non Qataris pay merely the cost of production. Why? We need to go back to 1963, when a group of Qatari youths proposed thirty-five administrative reforms on public policy. The seventeen or so gentlemen were imprisoned at first for these requests that were addressed to the ruler[1]. A couple of months later the ruler responded to the majority of these requests among which was zero pricing of utilities: free electricity and water to all Qataris. The moral behind this request, which was transformed into historical policy, is described by the following statement: "If utilities are to be provided freely to a group of Qatari citizens then equal citizenship requires equal treatment".
There is a gap between socio-economic realities and our perception of those realities. The image of these realities in the decision maker’s mind should not be reframed by mere narration of ministers and technocrats but verified by figures and numbers of socio-economic credible independent data. Moreover if the morality of any policy is obscure to the public then it will only fire back on the soundness and success of such policy in the long run[3].
by prominent Qatari intellect Dr. Lulwa Abdulla Al- Misned
Moral Grounds of Public Policy Design, Disseminate it!
Fuel products prices have been raised lately in the Qatari market within a range of 25% to 48%. This increase will be reflected in higher transportation cost and higher energy cost for infant industries in the local economy, and will implicitly raise all other prices. The inelastic nature of the demand for such commodities will reflect on higher revenue receipt for the relevant entity, if you fuel your car by spending around 80 QAR before the raise you still be willing to pay 130 QAR, you will not cut short your trips around Doha, Khor or Wakra. But the economy overall net benefit of this raise needs to be measured. We don’t really know the magnitude of the impact of this increase on the local inflation rate. The institutional ownership of measuring and publishing macroeconomic indicators is not defined. Moreover the institutional ownership of economic policy design and the philosophy of such design is unclear. I had been asked recently by one serious observer of Qatari public policy on the way Qatar will handle its external debt that mount to a figure getting closer to one hundred billion US dollars. As to IMF report, the external borrowing has doubled since 2008. My response was that he should address his question to the ministers or the technocrats who are cooking and preparing recipes in the economic policy kitchen.
Why were fuel prices raised and how would this reflect on the overall economy? What is the real magnitude of external debt? And how is this debt measured in relation to other indicators such as Qatari foreign investment, local infrastructure investments, the Gross Domestic Product (GDP), and the inter-generational distribution of national wealth? What are the different scenarios of medium and long term hydrocarbon prices, especially gas prices, and how would they reflect on the utilization of LNG production capacity and on other debt related or investment related issues? What is the rate of return on educational spending? Would the philosophy of supply create its own demand in the higher education sector, would it provide a suitable philosophy for our context or do we have to import demand from abroad to satisfy the growth of highly priced foreign universities , and how this would reflect back on other sectors of the economy? And if we follow the same philosophy in other sectors of the economy would this lead us to Qatari societal erosion? What is the real impact on demographics and how would it reflect back by creating more supply bottlenecks? We would need to increase hospitals, schools, roads, etc. What is the environmental impact of growth? If this impact is measured in monetary terms and internalized in project feasibilities would we change some major decisions? What is the magnitude of economic and social opportunities created by the 2022 World Cup hosting? And what are the relevant economic and social costs? Then what are the net benefits?
To answer such questions we do not need a technocrat’s or minister’s over-simplistic narration in media circles. Such narration says half of the truth and in many times it is counterproductive even for sound policy initiatives that seems obscure to the public. What we actually need is macroeconomic formulation and modeling independent of those who execute public policy; an honest and serious study of all the interrelated issues. However, this is not all, a prerequisite of such modeling is the question of the moral behind any policy. Any policy cannot be judged without this knowledge at the beginning of economic and societal policy design.
Fuels are not the only commodities subsidized in the Qatari market, and such subsidies were created for a reason. One subsidy is free electricity and water for the Qataris and where the non Qataris pay merely the cost of production. Why? We need to go back to 1963, when a group of Qatari youths proposed thirty-five administrative reforms on public policy. The seventeen or so gentlemen were imprisoned at first for these requests that were addressed to the ruler[1]. A couple of months later the ruler responded to the majority of these requests among which was zero pricing of utilities: free electricity and water to all Qataris. The moral behind this request, which was transformed into historical policy, is described by the following statement: "If utilities are to be provided freely to a group of Qatari citizens then equal citizenship requires equal treatment".
There is a gap between socio-economic realities and our perception of those realities. The image of these realities in the decision maker’s mind should not be reframed by mere narration of ministers and technocrats but verified by figures and numbers of socio-economic credible independent data. Moreover if the morality of any policy is obscure to the public then it will only fire back on the soundness and success of such policy in the long run[3].
http://inci-qataria.blogspot.com/2011/02/moral-grounds-of-public-policy-...