Looking forward to the discussions as I would be contributing from Nigeria

The key to the initial success of the reform in Iran was a very thorough preparation, including a communication campaign and escrow accounts for the cash transfers.

Because government make money of it.. Duh so no one dates to write about it

Absolutely - in many of these countries, people don't really know how subsidies are used. but also mistrust in the state is common, and this can be improved by clear and honest communication.

It's tricky if you consider that many of those affected will be in rural areas and so it won't be easy to extend public transport to them

Lets also note that apart from subsidising corruption, Nigeria also subsidises importation of refined products. That is why Nigerians have called for a functioning refining environment, and a reformed oil sector in which government is solely a regulator, and not the dominant player etc. If all of these are in place, the subsidies will go away in a less disruptive manner.

@Carlo Sdralevich, Can IMF do a Mali elsewhere? Are there challenges?

@stellapaul We had an interesting dialogue here @odi_development between the group working on subsidies and on agriculture. It seemed to me that the agricultural subsidy debate is further tied up in issues of urban v rural, and studies that show that overal, farmers subsidise people in urban areas. There was certainly a feeling that many agricultural subsuidies were deserved in some way. We are hoping to look into subsidies and policies in some key commodities in the new year, mapping out at what stages in the supply chain they occur.

@ Megan Rowling on business interests - it is interesting to not that the business lobby on the renewables side is starting to also push for fossil fuel subsidy phase out. In response to the ongoing parliamentary inquiry on energy subsidies in the UK, Vestas Wind Systems highlighted that "subsidies for fossil fuelled power stations in the UK are significant… [and] distort the electricity market, making it unnecessarily difficult for technologies not in receipt of such subsidies … to compete."

The CEO of ReNew Power, one of India's largest renewable energy companies, has stated that "to the extent the government keeps giving cheap coal to power producers, you have to give something [to the renewable energy sector] … when they say that renewable energy needs subsidies to survive [that] is because our entire power market is totally distorted … there is no actual fair market pricing happening today"

We recommend that subsidy money be used first for targeted social support to the poor, who are the most hit by subsidy removal,
then for general social spending and investment - and here it is important that governments can credibly explain where the money will go, otherwise the middle classes lose the subsidy but do not see anything in return.

@Temi & @Hamzi12 - It is certainly true that concerns around credibility of reform promises are real in Nigeria. But it is also true that increasing international fuel prices are likely to once again cause major economic problems, driving future price changes. Is it possible in the meantime to develop a plan that most people see as credible - an alternative to fuel subsidies that overcome people's concerns about governance? Very interested to know your thoughts on the feasibility of this, and what to do about the likelihood of pressure for future price rises.

@ Laurie - Where is best to spend additional revenue or money saved from subsidy phase out will be different for every country. But protection of the poor and vulnerable (from price increases) and investment in efficiency (to keep energy costs low) have to be priorities across the board.

What I liked about the analysis in Shelagh's report 'Time to change the game' (http://
bit.ly/18zav2r) is that she compared the scale of fossil fuel subsidies in some countries to health and education expenditure. I couldn't help thinking about some of the increased negative health impacts climate change will cause. There was an irony there... (Underspend on health compared to fossil fuel subsidies, which are driving climate change, which will complicate health issues.)

Laura, interesting question. My gut feeling is that cash transfers will be problematic. I will support investment in infrastructure, healthcare and some other basics. This is the best approach to reach the greatest majority. Incentives could also be provided in rural areas for renewables to take firm footing especially off grid energy solutions that would empower women and alleviate poverty. Direct cash transfers would be hijacked.

I appreciate what Armsfree is saying, and that's one major reason behind the riots when fuel prices go up. If people do not trust their governments to use the extra money honestly, communication will not help

Cash transfers are good when they can be targeted to the poor. We should not forget that even though subsidies benefit mostly the better off in terms of resources they get, the impact is bigger in the budget of the poor. So it is crucial to compensate them for the loss of the subsidy.