Governments will go broke sooner or later with huge ballooning subsidies, even if they have oil and other natural resources.
The rocketing energy and food prices sparked by the Russian invasion of Ukraine will be a test for both people and governments.
Governments everywhere are also discovering that price caps do not spur increase in production, and that shortages resulting from proce capa are a sure way to push prices to shoot up astronomically.
Subsidies, if any, need to be targeted, timely, and temporary.
Targeting subsidies ensure they help those most in need. Broad based cap say on petrol prices at the pump simply benefits the wealthier car owning population disproportionately.
Timely support help those who are most desperate to get their next meal. 30 bowls of rice a month later is a useless gesture to a starving man, than a bowl of soup within a day.
What does it mean when folks clamour for roasted chicken, when given half a tingkat of economy rice even before they are starving?
Temporary subsidies help cushion short term price shocks to give time for people and businesses to adjust, adapt, and find new solutions.
Long term subsidies will shift behaviours wrongly towards less productive and less efficient solutions and habits.
Canute wisely showed his courtiers that even kings cannot hold back the waves lapping at their shores.
We are better off helping people and businesses find new grounds and new opportunities that are more sustainable.
We are certainly better off helping people and businesses who are willing to help themselves.
People, businesses and governments must be willing to tighten their belts, and work to chart a better path out of difficulties.
Governments will go broke sooner or later with huge ballooning subsidies, even if they have oil and other natural resources.
The rocketing energy and food prices sparked by the Russian invasion of Ukraine will be a test for both people and governments.
Governments everywhere are also discovering that price caps do not spur increase in production, and that shortages resulting from proce capa are a sure way to push prices to shoot up astronomically.
Subsidies, if any, need to be targeted, timely, and temporary.
Targeting subsidies ensure they help those most in need. Broad based cap say on petrol prices at the pump simply benefits the wealthier car owning population disproportionately.
Timely support help those who are most desperate to get their next meal. 30 bowls of rice a month later is a useless gesture to a starving man, than a bowl of soup within a day.
What does it mean when folks clamour for roasted chicken, when given half a tingkat of economy rice even before they are starving?
Temporary subsidies help cushion short term price shocks to give time for people and businesses to adjust, adapt, and find new solutions.
Long term subsidies will shift behaviours wrongly towards less productive and less efficient solutions and habits.
Canute wisely showed his courtiers that even kings cannot hold back the waves lapping at their shores.
We are better off helping people and businesses find new grounds and new opportunities that are more sustainable.
We are certainly better off helping people and businesses who are willing to help themselves.
People, businesses and governments must be willing to tighten their belts, and work to chart a better path out of difficulties.
Let’s not become a Sri Lanka.