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Kuwait 2030, what Tony\'s Team Left Out
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Foreign Workers, Utility Subsidies, CO2 Emissions and the Case for Automation A Demand Side Approach
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Foreign Workers, Utility Subsidies, CO2 Emissions and the Case for Automation
Transcript of Kuwait 2030, what Tony\'s Team Left Out
Foreign Workers, Utility Subsidies, CO2 Emissions and the Case for Automation
A Demand Side Approach
A Migrant Worker’s Cost Benefit Analysis
Motivating Discussion
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BenefitsState Subsidies
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Subsidized Fuel / “Free” Public Transportation
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Free* Public Transportation
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Free Electricity
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Free Water
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Free Health
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CostsDirect
“IQAMAS”
IQAMAS
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CostsIndirect
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Environmental Impact
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Health Care Impact
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Law and Order Impact
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The Mathematical Formulation Current Modus Operandi
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Current processes in Kuwait are typically of the type solving the following stochastic non linear optimization problem:1 2
1 2
:
: Space of stochastic processes satisfying certain regularity and
integrability conditio
inf exp( )
. .
( , , , )
ns
:Time indexed production possibility fronti
0
{
er
T
}
: h
:t t
t
Where
S
g
aL L b
s t
g X L L t T
X X t T S
X
1
2
e optimized process
: Unskilled labour
: Skilled Labour
: Technology
: Strictly positive processes
a : Small positive constant
L
L
b
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• Relatively technology neutral,
• Being heavily penalized for hiring skilled labour,
• Has little incentive to innovate and,
• In real terms is being subsidised for hiring unskilled workers.
In the above problem, the representative agent is:
Research ProposalNatural Resource and Environmental Impact
of Objective FunctionTransformation Policies
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We postulate the study of a family of policies Θ which transform representative objective functions as in the example below:1 1 2
: Space of stochastic processes satisfying certain regularity and
integrability conditions
:Time indexed produc
inf 1/ / ( ( ) )
. .
tion possibility frontier
( , , , ) 0
: Technology
:
t
i
S
g
L e a aL bL
s t
g X T L
X S
L Lab
0
: Production possibilty frontier at time t
( ): ( ) depending on such that: lim 0
t
a
our
g
e ae e a a
a
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•A high technology component and,
•A “small” unskilled labour component *.
Optimal solutions to such problems will all have the following desirable characteristics:
*Indeed, by making e depend on a as indicated above, he policy maker can insure that the amount of L1 remains low even as a – in real terms – declines.
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In this problem, the agent is:
•Being encouraged to introduce technology and substitute this for labour in general.
•Being heavily penalized – e(a) can also be made to depend on externalities – for using unskilled labour
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•Technology demand will increase for each choice of policy in the set Θ
•Depending on which policy in Θ is chosen, the quantity of skilled labour required will remain at most constant, and may for some choices of policies in Θ decrease
•Demand for unskilled labour will decrease for each choice of policy in the set Θ
Impact on factor of demand:
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•Reduction in usage of public utilities (health, water, electricity, fire, police)
•Reduction in traffic congestion
•Reduction in emmisions (fewer diesel run busses /older vehicles/ jawalla Taxis)
•Fewer violent crimes
Pottential environmental and social impacts:
