The National republishes an article by Rafik Hariri Center Assistant Director Svetlana Milbert on subsidy reform in the Middle East:
Subsidies are still widely used around the Middle East and North Africa (MENA) region, but there is growing consensus that urgent reforms are needed to address the economic effects of energy subsidies. In a recent report by the International Monetary Fund (IMF), Subsidies Reforms in the Middle East and North Africa: Recent Progress and Challenges Ahead, the Fund makes recommendations on how to best implement energy subsidy reforms aimed at reducing state budgets while advocating for social safety nets to replace subsidies.
For decades, governments in the region have used food and energy subsidies as part of the social contract.
Following the 2011 Arab uprisings, most governments increased expenditures on subsidies to placate protesters calling for social justice and greater economic opportunities.