As a rule, subsidies are a very ineffective and inefficient way of 
delivering social benefits.

By experience, they end up ballooning in cost and delivering little 
benefit that could not be achieved at far lower cost by other means.

Consider the effectively 'subsidised' 5% VAT rate we have on fuel in UK. 
We have it ostensibly to combat fuel poverty. But the greatest benefit 
goes to the richest people, who use most fuel.

According to the first (I think) law of welfare economics, it is much 
more efficient to simply give the money away on a per capita basis. That 
way it costs the same, but people get the choice of how to spend the 
money - like a reverse poll tax. Even better is to target the funds to 
the people who need it most - like child support. Provided you can do 
that - actually it is often harder than you think.

So I have to say, Morales is absolutely right to end the subsidies on 
fuel. Like here in UK, the biggest beneficiaries are surely rich people 
with cars, big houses to heat, etc. But to mitigate their impact on the 
poor, he should target additional aid to help them - for example, 
supporting bus companies to keep fares down. That way the change can 
become socially progressive, while costing considerably less.

For all the same reasons, here in UK VAT on fuel should go up to 20% and 
the money gained put back into additional social expenditures / reducing 
the scale of cuts /  supporting energy efficiency and conservation 
measures. Even just distributing the money to the population on a per 
capita basis would be a great improvement.

Oliver Tickell.
www.kyoto2.org/


On 05/01/2011 05:28, Chris Keene wrote:
>
>
> -------- Original Message --------
> Subject: 	[climate09-int] Fwd: Open Letter from Oscar and other former
> companeros of Evo Morales and Alvaro Garcia Linera
> Date: 	Sun, 2 Jan 2011 12:45:17 -0800
> From: 	david solnit <[log in to unmask]>
> To: 	[log in to unmask]
>
>
>
> FYI: Passing this along at the request of Bolivian friends. It was
> written in the midst of Bolivia's national protests at the sudden
> doubling of gas and diesel prices by the Morales Government and includes
> internal criticism of the Morales Government around climate/fossil fuel
> and neoliberal policies. It seems valuable for climate justice movements
> to have a full and complicated view.
>
> ---------- Forwarded message ----------
> From: *Marcela Olivera*
> Date: Thu, Dec 30, 2010 at 11:05 AM
> Subject: Open Letter from Oscar and other former companeros of Evo
> Morales and Alvaro Garcia Linera
>
> Companeros,
>
> The leftist press is not saying anything about what is happening here
> after the Gasolinazo couple of days ago. We ask you your help spreading
> this letter from Oscar and other former companeros from Evo and Alvaro.
> We need to start to look seriously at the contradictions in Bolivia
> under Morales government,
> Thanks!
> Marcela
>
> Para la carta en Espanol: http://narconews.com/Issue67/articulo4292.html
>
>
>   Open Letter to Evo Morales and Álvaro García Against the Gasolinazo
>   and for the Self Governance of Our People
>
>
>     The People Come First, not Numbers nor Statistics
>
>
>       By Oscar Olivera Foronda, Marcelo Rojas, Abraham Grandydier,
>       Aniceto Hinojosa Vásquez and Carlos Oropeza
>       Bolivia
>
> December 30, 2010
>
> Cochabamba, (La Llajta) December 30, 2010
>
> Sirs;
> Evo Morales Ayma and
> Alvaro García Linera
> La Paz.-
>
> We speak to you through this open letter although it probably won’t be
> read because you don’t hear of it or because it doesn’t interest you.
> However, although you may ignore it, although it may not exist, we want
> to tell you how we, like many of our people, feel today. We tell you,
> Sirs, because years ago you ceased being our brothers and compañeros,
> you distanced yourselves from the people, and thus you don’t know what
> happens down here, below. Your defects – and not your virtues – that we
> know have multiplied ten times in a worrisome, indignant and sad manner.
>
>
> Oscar Olivera (wearing baseball cap, interviewed by reporters) with Evo
> Morales (in the green shirt, to the right of Oscar) during the 2000
> “Water War” in Cochabamba.
>
> We still remember when we marched, together with you, Evo, for our
> people, when we campaigned to get Alvaro out of prison; when the ancient
> textile workers’ building in Cochabamba became our headquarters to
> conspire against the bad governments that today look a lot like
> yours:BAD GOVERNMENT.
>
> You quickly forgot that we sent you into the government not to
> administrate, but, rather, to transform and change the lives of the
> people. Today we see all of you transformed and the lives of the people
> have changed, but badly so, from bad to worse.
>
> Since that December 22 of 2005, when you cried, Evo and Alvaro, you have
> only busied yourselves making traditional and privileged politics,
> subordinating and coopting social and union leaders, military and police
> officials, with money, with positions, disqualifying and stigmatizing
> everything that has criticized you, everything we said we wanted to do
> away with. Some of us had the luxury to reject your offers and you
> converted us into your enemies or simply behaved as if we did not exist.
> We asked you: *Change the economy*, worry about the people more than
> your political enemies, create jobs, industry, work, *build solidarity,
> brotherhood and generosity.*
>
> Where is your “obedience leads” slogan that was invented by the
> Zapatistas? Did the people send you there to pact with the right in the
> Constituent Assembly? Did the people send you there to fill your cabinet
> with neoliberals, opportunists, incompetents and advisors for
> international organizations that we never saw in the struggles of the
> people, in the streets, the highways, the communities, the hunger
> strikes and factories? Where were most of the members of your cabinet in
> 2000, 2001, 2002, 2003, 2004 and 2005? Did the people send you there to
> invite your mayors, governors, “beauty pageant contestants,” and
> neoliberal technicians into the government? Who decides in this
> government? The people? Or the llunk’us (a Quecha indigenous word for
> lackeys and adulators) that surround you in order to not lose the
> privileges that gives them power?
>
>
> Álvaro García Linera (vice president of Bolivia) in a 2002 press
> conference with Oscar Olivera and Raquel Gutiérrez Aguilar, when Olivera
> joined the hunger strike to demand that the Bolivian government withdraw
> charges against them.
>
> Who continues controlling the economy of our country? The indigenous
> and “social movements”? Or the multinational oil and mining companies
> and large bankers who today have made more money than during any
> previous government to yours, those which you affectionately call
> “partners”? They are partners in the conditions of anguish and poor
> living to which we have been subjected during these last five years.
> Where are the billions of dollars in fiscal reserves that you constantly
> tell us are there?
>
> What about the nationalizations that have been a trick against the
> population, indemnifying the multinational looters with the people’s
> money? These businesses are being administrated by the old neoliberal
> and corrupt bureaucracy.
>
> Where is the industrialization of gas in the country? Where is the new
> economy based on respect for Mother Earth and the balance and harmonious
> relation with Pachamama that you always proclaim? Haven’t you delivered
> thousands of acres to the multinational oil and mining companies so they
> can keep exploiting Mother Earth? Have you given the New Political
> Constitution of the State to the plantation owners of the Eastern region?
>
> The economic model continues being extractionary, neoliberal,
> capitalist, all of it contrary to your speeches.
>
> Was it the people who sent you to buy a private airplane for $40 million
> when millions of “your people” do not have housing nor basic services?
> Did the people send you to tolerate narcotrafficking like never before
> and that, sooner or later, will turn our city into a Ciudad Juárez or a
> Medellín? Maybe the same coca leaf that you promoted so that you could
> be president will be the same leaf that takes that privilege away from you.
>
> Do you know what it’s like to have to wait on line overnight to sign
> your sons and daughters into school or to receive inadequate medical
> attention in the public hospitals? The people don’t have private and
> privileged insurance for the clinics of the rich.
>
>
> Felipe Quispe, Evo Morales and Oscar Olivera, in 2003, when they joined
> forces as the popular “chiefs of staff” in opposition to the government
> of Gonzalo “Goni” Sánchez de Lozada.
>
> Are you familiar with what it is to get on a public bus or taxi and
> listen to the sentiments of our people? Have you gone to the markets to
> bargain the prices of basic foods that each day are harder to obtain to
> calm the hunger of our families?
>
> Did the people send you there to have so many privileges, bodyguards,
> assistants, cabinet chiefs who make it impossible to speak directly to
> both of you? Who pays you? Who pays your food, your transportation, your
> health insurance, your security, your planes, your costs? We do: the
> people which you were once part of.
>
> Did the people send you to impose such a brutal, irrational, arrogant
> and neoliberal “gasolinazo” (an 82 percent hike in gasoline prices) that
> will make the people, who barely survive if they have the luck to have a
> stall in the market or a job, even poorer?
>
> You always said that neoliberalism has failed. Is the gasolinazo a
> revolutionary and popular measure? Or is it that your economic model has
> failed?
>
> Why must you – like all the governments previous to yours have done –
> carry out your failures behind the backs of the population, notably over
> those making minimum wage whose median income is fifty times less than
> yours and whose needs are one hundred times greater than yours?
>
>
> Álvaro García Linera at the home of Oscar Olivera.
>
> What a pain that you always say that power is in the hands of the
> people, that this is an indigenous-popular government, what a pain that
> all of this is a lie:LLULLAS! (A very strong indigenous Quechua word
> for “liars.”)
>
> Luckily, thanks to the struggles in which we have been together, we
> learned something very important. We learned to think and act for
> ourselves so that never again would anyone tell us what we must do, so
> that nobody ever again would be able to trick us so that the popular
> vote, trust and hope that has come in recent times from the most
> impoverished and humble sectors would be converted into a party for the
> rich, the well-off, the neoliberals in sheep’s clothing, the “beauty
> pageant contestants.” The process is not propaganda, it is not a speech,
> it is not about marketing: the process is to change the lives of the
> people. And read this well, because we won’t allow ourselves to be
> tricked again by anybody. That’s the way that people – who come, like
> you, from the breast of The People – are.
>
> *We would like to finish by saying something that an Aymara elder said:
> The indigenous are not defined by physical traits, nor language, nor
> last name, nor culture. The indigenous come from an attitude of
> generosity, of respect, of reciprocity, transparency, of listening to
> others.*
>
> We ask you: Do you have that? From below and to the left, as the
> Zapatistas say, we see arrogants who decide everything, who don’t listen
> to anyone, who discriminate, who insult, who disqualify, who defame. Is
> that how you want to remain in power for many years?
>
>
> Oscar Olivera and Evo Morales after Morales’ 2005 election to the
> presidency.
>
> The problem is that you don’t understand the enormous responsibility
> that you assumed as part of this process with our people and other
> peoples of the world: of demonstrating that it is possible to govern
> ourselves, that it is possible to lead by obeying, that it is possible
> to construct another model of development, of “good living,” that
> another world is possible. This was a process that delivered itself to
> you with hope and joy. The legitimate owner of this process is the
> Bolivian people, the girls and boys, men and women, youths, elders, from
> the country and from the city, whose effort cannot be worn down,
> diverted, usurped, expropriated, betrayed or subordinated by anyone,
> even less by you and those who equivocally decide for us.
>
> We don’t care about governments. We care about the people and this
> process is losing the social base that it cost us so much to construct
> while returning it to the right against which we fought and will fight.
>
> *To make you understand that we exist we must mobilize and this we will
> do, do not forget it.*
>
> But we will not mobilize to fight among brothers and sisters in the way
> that you’ve been encouraging in these years in your incapacity, and the
> result is in Huanuni, Cochabamba, Pando, Yungas, Sucre… where so many
> brothers and sisters, all children of Mother Earth, have hated and died.
>
> *Alvaro, we already told you: The people come first, and later the
> numbers and statistics.*
>
> Do not confront us. Do not provoke us. Do not divide us or ignore us. We
> exist. We are dignified. We will struggle against everything that harms
> our daily lives. We seek:
>
>     *
>     -The repeal of your anti-popular and nefarious Decree 748
>
>     -The decolonization of the Plurinational State
>
>     -That no political party, not of the left, the center or the right,
>     can benefit from or involve itself in our actions and decisions
>
>     *
>
>     *-Like in 2000, like in 2003, Cochabama and El Alto defeated the
>     anti-popular policies.*
>
> Oscar Olivera Foronda
>
> Marcelo Rojas
>
> Abraham Grandydier
>
> Aniceto Hinojosa Vasquez
>
> Carlos Oropeza
>
>

-- 
--
Oliver Tickell
e: [log in to unmask]
p: +44 1865 728118
a: 379 Meadow Lane, Oxford OX4 4BL, UK.