The decision by the Greater Amman Municipality (GAM) or the Ministry of Health not to renew the licences of water pipe cafés in Amman is an issue that begs to be addressed from a political-economy perspective, especially because the savings and livelihoods of so many vendors may be affected.
The decision must be therefore revised, with the investors’ welfare in mind.
Think of a person who obtained licence for a water pipe shop in Amman from GAM a few years ago. He paid the licence fees, about JD10 per square metre, I believe, and then went about paying all kinds of fees to the several government agencies.
After all the money and time due to the public sector was spent in sunk costs, he went about investing.
He rented or built a space, decorated it, hired people to work in it and advertised. He then started to produce his service, which is renting out water pipes to smokers.
The whole process has been legal, and in some cases had an investment tag that was in the millions.
The product is harmful to health. Yes, smoking a water pipe is equivalent to smoking 100 cigarettes (according to some sources) and is even more harmful than cigarettes because of the glycerine derivatives used in the tobacco and other disgusting things. So it is hard to have sympathy for the service or the service providers.
On the other hand, the more taxes the government places on cigarettes the more likely it is that the youth will choose to smoke water pipe, the latter being a nicotine substitute.
Therefore, one can discern that it was government tax hikes that encouraged the spread of such cafés.
Is there a conspiracy here? Is the decision not to renew the licences a ploy to bring people back to cigarettes so the government could earn more from cigarette taxes?
After all, cigarettes have been viewed for years as a good and growing source of income for the government.
But GAM, even though its mayor and half of the board members are appointed by the Council of Ministers, is not part of the government, and the government losing revenue is not welcome in GAM, I would think.
So, if the decision is not financially motivated, could it be health related?
Possibly, especially since there is a ban on smoking in public spaces, which is not observed even in government offices.
But let me go back to our investor who employed his time and savings to start the café.
I am sure he would not have spent what may have been his life savings if he thought that GAM or the government would suddenly decide not to renew his licence. And this is the crux of the matter.
Such an abrupt, seemingly unilateral decision is typical of developing country governance, whereby the economic managers could reverse the trend and change their minds and policy overnight.
And this is why investors shy away from the MENA region, where appointed governments find no need to go into a consultative process or worry about the welfare of those affected by their decisions.
A better decision would be to progressively raise the licence fees every year.
The owners would pass the rise in cost to their patrons and smoking the water pipe would thus be curtailed; shops would slowly wither and close.
Additionally, higher health standards and precautionary measures can and should be required of the cafés, especially when it comes to content, smoke suction, ventilation, hygiene, etc.
But not to renew the licences would simply send the wrong signal, something that nobody wants.
