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| As Energy Prices Tumble, Developing Countries Trim Subsidies | As Energy Prices Tumble, Developing Countries Trim Subsidies |
| (1 day later) | |
| The coronavirus pandemic has sent economies into recession and reduced government revenue, so some countries are taking a politically perilous path: removing restraints on electricity and petroleum prices. | The coronavirus pandemic has sent economies into recession and reduced government revenue, so some countries are taking a politically perilous path: removing restraints on electricity and petroleum prices. |
| Nigeria and Tunisia have lowered fuel subsidies in recent weeks, and India has raised taxes on gasoline and diesel fuel. Sudanese officials plan to replace some subsidies with direct cash payments to the poor. Venezuela, where the economy was collapsing before the pandemic, has partly reversed decades of gasoline subsidies. And the state-owned electric utility in Dubai is seeking to raise rates for the first time in a generation. | Nigeria and Tunisia have lowered fuel subsidies in recent weeks, and India has raised taxes on gasoline and diesel fuel. Sudanese officials plan to replace some subsidies with direct cash payments to the poor. Venezuela, where the economy was collapsing before the pandemic, has partly reversed decades of gasoline subsidies. And the state-owned electric utility in Dubai is seeking to raise rates for the first time in a generation. |
| In contrast to the recent past, elected leaders are facing little political blowback for taking away subsidies and raising taxes. That’s because the prices of oil, natural gas and other fuels have collapsed in recent months. In addition, driving, flying and industrial activity have dropped off sharply. | In contrast to the recent past, elected leaders are facing little political blowback for taking away subsidies and raising taxes. That’s because the prices of oil, natural gas and other fuels have collapsed in recent months. In addition, driving, flying and industrial activity have dropped off sharply. |
| But that could change once world energy prices shake off the pandemic’s effects. | But that could change once world energy prices shake off the pandemic’s effects. |
| Energy subsidies are often taken for granted outside the halls of power. But they constitute vital policy choices that weigh on government budgets and economic development. | Energy subsidies are often taken for granted outside the halls of power. But they constitute vital policy choices that weigh on government budgets and economic development. |
| “Governments are caught in a dilemma,” said Jim Krane, an energy expert at Rice University who has studied subsidies. “Do they want to protect the poor who may have lost their jobs and incomes, or do they want to take action against the pernicious long-term cost to their budgets?” | “Governments are caught in a dilemma,” said Jim Krane, an energy expert at Rice University who has studied subsidies. “Do they want to protect the poor who may have lost their jobs and incomes, or do they want to take action against the pernicious long-term cost to their budgets?” |
| Countries with weak social-service and tax systems often resort to subsidies because they are a relatively easy way to deliver affordable electricity, cooking gas and petroleum. But many economists say this largess primarily benefits well-off families, because they have the biggest cars and homes. The poorest people in the developing world frequently do not own cars and may live in villages that have access to power for just a few hours a day, if they are connected to the grid at all. | Countries with weak social-service and tax systems often resort to subsidies because they are a relatively easy way to deliver affordable electricity, cooking gas and petroleum. But many economists say this largess primarily benefits well-off families, because they have the biggest cars and homes. The poorest people in the developing world frequently do not own cars and may live in villages that have access to power for just a few hours a day, if they are connected to the grid at all. |
| Still, any price increase hurts people earning subsistence wages. And cuts in subsidies have prompted political protests, riots and strikes from Iran to Indonesia. | Still, any price increase hurts people earning subsistence wages. And cuts in subsidies have prompted political protests, riots and strikes from Iran to Indonesia. |
| In October, for example, Ecuadoreans marched in the streets after the government slashed fuel subsidies to save $1.4 billion a year. As gasoline prices rose by 25 percent and diesel prices doubled, truck drivers, Indigenous people and other groups paralyzed the country for 11 days and forced the president to leave the capital, Quito. The protests ended when the government reversed course. | In October, for example, Ecuadoreans marched in the streets after the government slashed fuel subsidies to save $1.4 billion a year. As gasoline prices rose by 25 percent and diesel prices doubled, truck drivers, Indigenous people and other groups paralyzed the country for 11 days and forced the president to leave the capital, Quito. The protests ended when the government reversed course. |
| Rene Ortiz, Ecuador’s energy minister, said energy subsidies were a “flag” waved by politicians and activists to win votes. “That flag attracts the poor people, who think if subsidies are taken away they will become poorer,” he said in an interview. “It’s a myth that won’t easily go away.” | Rene Ortiz, Ecuador’s energy minister, said energy subsidies were a “flag” waved by politicians and activists to win votes. “That flag attracts the poor people, who think if subsidies are taken away they will become poorer,” he said in an interview. “It’s a myth that won’t easily go away.” |
| It is little wonder that few countries have eagerly followed the advice of the economists at the World Bank, the International Monetary Fund and other organizations to cut subsidies. | It is little wonder that few countries have eagerly followed the advice of the economists at the World Bank, the International Monetary Fund and other organizations to cut subsidies. |
| Experts say government spending on fuel and electricity makes it harder for officials to spend on health care and education. It also encourages people to use more energy than they need, increasing air pollution and traffic congestion. In addition, some benefits of low energy prices are frittered away when smugglers resell fuel in another country where prices are higher. | Experts say government spending on fuel and electricity makes it harder for officials to spend on health care and education. It also encourages people to use more energy than they need, increasing air pollution and traffic congestion. In addition, some benefits of low energy prices are frittered away when smugglers resell fuel in another country where prices are higher. |
| Energy subsidies in more than 40 countries totaled $318 billion last year, according to the International Energy Agency — half for oil and petroleum products, and the rest for electricity, natural gas and coal. The countries with the biggest subsidies last year were Iran, China, Saudi Arabia and Russia. Roughly 10 percent of global consumption of fossil fuels was subsidized, according to the energy agency. | Energy subsidies in more than 40 countries totaled $318 billion last year, according to the International Energy Agency — half for oil and petroleum products, and the rest for electricity, natural gas and coal. The countries with the biggest subsidies last year were Iran, China, Saudi Arabia and Russia. Roughly 10 percent of global consumption of fossil fuels was subsidized, according to the energy agency. |
| To cushion the pandemic’s economic blow, countries like Indonesia, South Africa and Ghana recently increased electricity subsidies. | To cushion the pandemic’s economic blow, countries like Indonesia, South Africa and Ghana recently increased electricity subsidies. |
| “The overwhelming priority for governments given the Covid-19 pandemic is to try to mitigate the impact, and so governments are trying to make sure the incomes of households are protected to some degree,” said Tim Gould, head of energy supply and investment at the International Energy Agency. | “The overwhelming priority for governments given the Covid-19 pandemic is to try to mitigate the impact, and so governments are trying to make sure the incomes of households are protected to some degree,” said Tim Gould, head of energy supply and investment at the International Energy Agency. |
| But Mr. Gould added that the collapse of energy prices gave governments “a golden opportunity.” Lower prices make it easier to cut subsidies without inflicting much pain on the poor, especially in oil-exporting countries with reduced revenues. | But Mr. Gould added that the collapse of energy prices gave governments “a golden opportunity.” Lower prices make it easier to cut subsidies without inflicting much pain on the poor, especially in oil-exporting countries with reduced revenues. |
| “As you move from the immediate emergency phase into the stimulus and recovery stage, there is a real opportunity to make sure the pricing signals are the right ones,” he said. | “As you move from the immediate emergency phase into the stimulus and recovery stage, there is a real opportunity to make sure the pricing signals are the right ones,” he said. |
| Updated June 12, 2020 | |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. | Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. |
| Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. | Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. | Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. |
| The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. | The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| The last time oil prices plunged, in 2014 and 2015, countries like India, Malaysia, Morocco, Saudi Arabia and the United Arab Emirates reduced subsidies. Some, including India, compensated the poor with direct cash payments. | The last time oil prices plunged, in 2014 and 2015, countries like India, Malaysia, Morocco, Saudi Arabia and the United Arab Emirates reduced subsidies. Some, including India, compensated the poor with direct cash payments. |
| The moves made fiscal sense, but countries like Kuwait and Oman reversed course after protests. Others, like Russia, which has subsidized fuel since the Soviet era, did not enact proposals to raise energy prices. | The moves made fiscal sense, but countries like Kuwait and Oman reversed course after protests. Others, like Russia, which has subsidized fuel since the Soviet era, did not enact proposals to raise energy prices. |
| Subsidies are just one way governments hand out money to the energy industry. The United States does not directly subsidize the retail price of gasoline or electricity, but it offers tax breaks to fossil-fuel and renewable-energy companies. Gasoline and diesel taxes are also lower at the pump in the United States than in European countries. | Subsidies are just one way governments hand out money to the energy industry. The United States does not directly subsidize the retail price of gasoline or electricity, but it offers tax breaks to fossil-fuel and renewable-energy companies. Gasoline and diesel taxes are also lower at the pump in the United States than in European countries. |
| More governments may reduce energy subsidies if oil and gas prices stay low. | More governments may reduce energy subsidies if oil and gas prices stay low. |
| The biggest test could come in Nigeria, where cheap gasoline and diesel fuel are considered sacrosanct because the country is the biggest oil producer in Africa. When Goodluck Jonathan, the president at the time, scrapped energy subsidies in 2012, he faced two weeks of protests and riots as prices surged before he reinstated half of the previous subsidies. | The biggest test could come in Nigeria, where cheap gasoline and diesel fuel are considered sacrosanct because the country is the biggest oil producer in Africa. When Goodluck Jonathan, the president at the time, scrapped energy subsidies in 2012, he faced two weeks of protests and riots as prices surged before he reinstated half of the previous subsidies. |
| The current president, Muhammadu Buhari, is calculating that this time will be different. He has deregulated prices at the pump, in a move designed to save his government $2 billion a year. With global oil prices down by roughly 40 percent since the beginning of the year, the decontrolled price at the pump is several cents a gallon below the controlled price Nigerians paid as recently as last month. | The current president, Muhammadu Buhari, is calculating that this time will be different. He has deregulated prices at the pump, in a move designed to save his government $2 billion a year. With global oil prices down by roughly 40 percent since the beginning of the year, the decontrolled price at the pump is several cents a gallon below the controlled price Nigerians paid as recently as last month. |
| “He removed the subsidies because they are not necessary anymore,” said Judd Devermont, director of the Africa program at the Center for Strategic and International Studies, a research group in Washington. “If oil creeps up again, there will be pressure on Buhari to reinstall the subsidies. Nigerians may not get the democracy they want or the security they want, but they expect cheap oil.” | “He removed the subsidies because they are not necessary anymore,” said Judd Devermont, director of the Africa program at the Center for Strategic and International Studies, a research group in Washington. “If oil creeps up again, there will be pressure on Buhari to reinstall the subsidies. Nigerians may not get the democracy they want or the security they want, but they expect cheap oil.” |