x Abu Dhabi, UAEThursday 18 January 2018

Shops need clear options to improve

Rules governing the minimum size of some retail businesses may prove to be a hardship for law-abiding shopkeepers – and for consumers.

Abu Dhabi officials are moving methodically to impose higher standards on small retail businesses. The campaign's stated motive has to do with health and safety, but the process may be a hardship for many law-abiding shop operators - and ultimately for consumers.

The latest sector to come under the eye of the Municipality is that of the laundry shops that are scattered across most residential neighbourhoods. Washing and ironing shops under 40 square metres are now deemed too small, and must close. "I don't know what I am going to do," said one man who has operated a laundry for 25 years.

Similar rules now apply to curtain and furniture shops, tyre-repair businesses, hardware stores, and beauty salons. Meanwhile the proprietors of small grocery stores have been ordered to invest in costly upgrades or else close their doors.

Aside from the question of fairness, there is also a risk that these changes will drive up consumer prices in new or renovated shops.

Some retailers also complain about a lack of transparency. One merchant said he was ordered to change his shop, but was refused access to a printed copy of the rules he must follow because the document was not yet ready.

To be sure, many residential neighbourhoods of the capital house unsightly, or even squalid, shops where improvement is overdue. As Abu Dhabi renovates the downtown area, there is a public interest to be served by redressing these problems. The question, then, is how best to do it.

Central planning does not always have the intended consequences. Cities, as organic, evolving entities, often respond poorly to sweeping decrees.

The alternative way to prevent decay is the sometimes-derided process called gentrification. This is slow, diverse improvement, the sum of numerous small decisions by individual proprietors, each making personal choices in response to market forces.

Rather than issuing sweeping decrees making life harder for merchants and more costly for customers, the Municipality could serve people better by finding ways of encouraging investors to open modern shops and businesses, big enough to be appealing and efficient but small enough to retain some neighbourhood character.