The IMF listed the key factors in its report, "Subsidy Reform in the
According to the IMF,
Food subsidies are, however, better targeted than fuel subsidies due to self-targeting mechanisms such as quality differentiation and food rationing/queuing schemes.
Global rating agency Fitch announced 8 July that fuel price hikes are an important step toward reducing
The IMF suggested cash transfers as a method of improving targeting. Uniform cash handouts are more advantageous than self-targeted food subsidies because they do not directly distort prices.
They also provide flexibility and more choice to recipients, have a relatively low administrative cost once the infrastructure has been set up, and can be easily scaled up in case of need.
IMF estimates indicate that well-designed cash transfer systems in MENA can typically result in about 50–75 % of spending reaching the bottom 40% of the population. This compares with 20% of the amount spent subsidising fuel prices and 35% subsidising food prices. Countries that have successfully implemented such a system of cash transfers include
Lower exports after the 2011 revolution and the large external and fiscal deficit and higher public debt were two main triggers of reform in
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