Leveraging Fuel Subsidy Reform for Transition in Yemen
AbstractYemen is currently undergoing a major political transition, yet many economic challenges—including fuel subsidy reform—remain highly relevant. To inform the transition process with respect to a potential subsidy reform, we use a dynamic computable general equilibrium and microsimulation model for Yemen; we show that overall growth effects of subsidy reduction are positive in general, but poverty can increase or decrease depending on reform design. A promising strategy for a successful reform combines fuel subsidy reduction with direct income transfers to the poorest one-third of households during reform, and productivity-enhancing investment in infrastructure, plus fiscal consolidation. Public investments should be used for integrating economic spaces and restructuring of agricultural, industrial and service value chains in order to create a framework that encourages private-sector-led and job-creating growth.
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Bibliographic InfoArticle provided by MDPI, Open Access Journal in its journal Sustainability.
Volume (Year): 4 (2012)
Issue (Month): 11 (October)
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Web page: http://www.mdpi.com/
fuel subsidy reform; development; poverty; Middle East; Northern Africa; Yemen;
Find related papers by JEL classification:
- Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
- Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
- Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
- Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Breisinger, Clemens & Ecker, Olivier & Funes, Jose & Yu, Bingxin, 2010. "Food as the basis for development and security: A strategy for Yemen," IFPRI discussion papers 1036, International Food Policy Research Institute (IFPRI).
- Ecker, Olivier & Breisinger, Clemens & McCool, Christen & Diao, Xinshen & Funes, Jose & You, Liangzhi & Yu, Bingxin, 2010. "Assessing food security in Yemen," IFPRI discussion papers 982, International Food Policy Research Institute (IFPRI).
- Teguh Dartanto, 2012.
"Reducing Fuel Subsidies and the Implication on Fiscal Balance and Poverty in Indonesia: A Simulation Analysis,"
Working Papers in Economics and Business
201206, Faculty of Economics, University of Indonesia, revised May 2012.
- Dartanto, Teguh, 2013. "Reducing fuel subsidies and the implication on fiscal balance and poverty in Indonesia: A simulation analysis," Energy Policy, Elsevier, vol. 58(C), pages 117-134.
- Solaymani, Saeed & Kari, Fatimah, 2014. "Impacts of energy subsidy reform on the Malaysian economy and transportation sector," Energy Policy, Elsevier, vol. 70(C), pages 115-125.
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