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Nairobi, Kenya. Following reforms, electricity subsidies in Kenya fell from 1.5 percent of GDP in 2001 to zero in 2008 (photo: Tony Karumba/Newscom).
The IMF and Civil Society
IMF Sees Big Gains from Energy Subsidies Reform
March 27, 2013
A new IMF paper urges governments all over the world to reform subsidies affecting products ranging from coal to gasoline.
Subsidies are intended to protect consumers by keeping prices low. But many argue that subsidies are inefficient and could be replaced with better means of protecting consumers in need. This, according to the IMF, is possible if governments undertake the right reform path, and will in the process also help alleviate budgetary pressures being faced by governments.
The IMF work was carried out by regional and fiscal affairs experts from across the organization. In an interview, Carlo Cottarelli, Director of the IMF’s Fiscal Affairs Department; Masood Ahmed, Director of the Middle East and Central Asia Department; and Antoinette Sayeh, Director of the African Department, all spoke about what the paper will mean for the IMF’s work in countries and for the countries themselves.