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Subsidy Reform in the Middle East and North Africa: Recent Progress and Challenges Ahead

Carlo Sdralevich, Randa Sab, Younes Zouhar and Giorgia Albertin

No 2014/008, IMF Departmental Papers / Policy Papers from International Monetary Fund

Abstract: In the Middle East and North Africa (MENA) countries price subsidies are common, especially on food and fuels. However, these are neither well targeted nor cost effective as a social protection tool, often benefiting mainly the better off instead of the poor and vulnerable. This paper explores the challenges of replacing generalized price subsidies with more equitable social safety net instruments, including the short-term inflationary effects, and describes the features of successful subsidy reforms.

Keywords: DPPP; DP; subsidy reform; exchange rate; fuel price; price increase; price subsidy; energy subsidy; food subsidy; fuel subsidy; Energy subsidies; Fuel prices; Inflation; Oil prices; Social assistance spending; Middle East; North Africa; East Africa; Middle East and Central Asia; Global; oil importer; oil exporter; reform outcome; reforms in the Middle East; Oil (search for similar items in EconPapers)
Pages: 130
Date: 2014-07-09
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Handle: RePEc:imf:imfdps:2014/008