GLOBAL SUBSIDIES INITIATIVE
Subsidy WatchIssue 38, May 2010
Download as PDF: Subsidy Watch, Issue 38, May 2010 (662 KB)
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The Real Reasons Behind India’s Reluctance to Liberalize Petroleum Prices
By Bhamy V Shenoy, Convener, Mysore Consumer Council
In just four years the Indian government has had three high-level committees recommend how petroleum product prices should be determined. All three have shared the same general conclusions: the government should reform fuel-price subsidies and use other, more effective policies to improve the welfare of the poor. But the reality behind India's reluctance to liberalize prices is not a lack of good policy advice. It is that dealers and wholesalers can make large amounts of money out of the subsidies, and, one way or another, some of this ultimately ends up supporting politicians.
Also in this issue:
Analysis
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Pakistan puts electricity-tariff increase on hold, but still plans to eliminate electricity subsidies
The Pakistani government has delayed its latest planned electricity-tariff increase, citing strong public opposition and continued economic troubles caused by its battle with militants on the Afghan border. The country has been raising its heavily subsidized electricity tariffs as part of a program to curb large budget deficits that it agreed to as part of a US$ 11.3 billion bailout package from the International Monetary Fund (IMF).
Commentary
News
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Fossil-fuel subsidies round-up: March and April 2010
Following announcements that fossil-fuel subsidies will be phased out, from the G-20, the Asian-Pacific Economic Cooperation (APEC) and a number of independent countries, including Iran, Nigeria and Bahrain, Subsidy Watch each month highlights important news stories that touch on this theme ...
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WTO Subsidy Dispute Round-up
This month, the United States agreed to pay Brazilian cotton farmers US$ 1.473 million a year; and Boeing and Airbus both claimed victory over a WTO ruling on the EU's Launch Aid subsidies. Find out why in the WTO Subsidy Dispute Round-up....
Studies
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Earth Track investigates U.S. Energy Information Administration subsidy estimates
In March, subsidy research organisation Earth Track released a new report, EIA Energy Subsidy Estimates: A review of assumptions and omissions, which analyses why the United States' Energy Information Administration (EIA) underestimates the true cost of federal energy subsidies.
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Reports conflict in analysis of EU fishing subsidies’ impacts
In March, a shadow evaluation of the EU's fisheries subsidy was released by Poseidon Aquatic Resource Management Ltd. and the Pew Environment Group, in anticipation of the European Commission's own evaluation of the program.
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World Bank critical of farm subsidies to private goods in Indonesia
According to a recent note published in the World Bank's Economic Premise, agricultural spending in Indonesia should be directed at improving the provision of public services, rather than subsidizing private inputs.
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The public goods paradigm and the EU’s Common Agricultural Policy
By Valentin Zahrnt, Research Associate, European Centre for International Political Economy (ECIPE) and Editor of www.reformthecap.eu
From the outside, the European Union's Common Agricultural Policy (CAP) may look immutable. The only major effect of the reform passed by farm ministers in 2009, dubbed the ‘Health Check', was to dissipate more serious ambitions for change for the rest of the EU long-term budget (2007–2013).
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