Friday, May 18, 2007

High prices and the state

Rising fast food prices in the UAE are viewed with concern by the state. Yet they are the result of higher costs to the retailers (mostly due to rising costs of imports transmitted through the fixed exchange rate with the dollar).

Meanwhile we wonder whether a reduction in the state's royalty burden on telecom profits (currently 50%) would be coupled with a change in state regulation that would allow price competition between etisalat and du. Price competition would reduce the burden of high prices on the people.

Shouldn't the mission of the Telecom Regulatory Authority be to promote competition rather than to protect competitors?

We also wonder why the telecoms don't capitalize their names.

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Anonymous fellow atheist said...

Because some ad agency thought it was 'hip' to go with 'du' being lower-case. Then etisalat wanted to make sure that du don't have a 'differentiator', and proceeded to copy the style -- in other words, their efforts to differentiate themselves from etisalat are continuously and systematically undermined by etisalat in that manner. Really, smart move.

Either way, it's silly.

The State's concern over prices are indeed a result of pegging the dirham to the dollar. However, I'm not so sure it would be a good thing to remove that now. If/when this bubble busts, I would think the dollar would come to the rescue.

8:17 PM  
Blogger UAE Students said...

Have you seen this story about attempst to prevent social unrest in the Middle east:

8:29 PM  

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