Yemen Mired In Fuel Subsidy Dilemma

Yemen’s government has vowed not to bow to international pressure to remove fuel subsidies anytime soon. But past experience shows this policy may have to change, and soon, before many of its lingering economic problems can be tackled.

Historically, subsidies have posed one of the biggest challenges for politicians. Introduced for one purpose, they gradually cease to work towards that goal, and instead tend to distort the market and benefit anyone but those initially targeted. Once implemented however, subsidies are notoriously difficult to eliminate, as their main beneficiaries in society push – or in some cases even riot – to hold on to their subsidy-related ‘benefits.’ (CONTINUED - 1782 WORDS)