APEC Koh Samui March 18 2013 Paul Mitchell. Communication Integral to Reform Fuel Subsidy Reform...
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Communication and Fossil Fuel Subsidy Reforms APEC Koh Samui March 18 2013 Paul Mitchell
APEC Koh Samui March 18 2013 Paul Mitchell. Communication Integral to Reform Fuel Subsidy Reform will not succeed without communication that is integral
Communication Integral to Reform Fuel Subsidy Reform will not
succeed without communication that is integral to the process from
the beginning (or even before!) and continues throughout the
process and possibly for a period of time after the reforms have
been implemented. 2
Slide 3
Political Unrest 3
Slide 4
An oil price hike by Bangladesh has sparked a call from
opposition parties for a nationwide strike. Bangladeshs main
opposition parties have backed several violent strikes and
blockades in recent month. Reuters Jan 4 2013 4 India has announced
a sharp increase in fuel prices in a long awaited but politically
risky move. The increase risks triggering an intense political
backlash. Financial Times India Sept 13 2012. The demonstrations
that have mobbed the streets of Amman for two weeks are demanding
the overthrow of King Abdullah a criminal offense in Jordan. This
was spurred by a basic issue; the rising price of gas after the
government withdrew subsidies. Time magazine November 28 2012.
Thousands of people in Nigeria fought deadly street battles with
police after the government cut its fuel price subsidies in
2012.
Slide 5
Politics and Subsidy Reform Governments fear instability one
way to reduce dangers is to provide visible services at low cost.
Once this process has begun it is difficult to stop particularly in
oil rich states where the subsidy is a readily available means of
supplying visible goods and service to unrest prone populations.
The fuel price subsidy saga has not benefited any political party.
ADB, Asia Pathways, Oct. 30, 2012. Subsidies even in countries
lacking energy resources contribute to political and economic
stability. Yale Global online Will Hickey June 7 2012. Governments
give subsidies as part of a political bargain as a visible way of
delivering benefits. Global Subsidy Initiatives August 2012 5
Slide 6
Technical or Political Issue? Removal of fuel subsidies is a
POLITICAL issue based on policy and technical work Need to take a
political economy approach 6
Slide 7
Why communication ? Public information campaigns can mobilise
political support for reforms and help overcome vested interests.
The public should be informed about the drawbacks of existing
subsides and the benefits of reform. IMF Fuel and Food Price
Subsidies: Issues and Reform Options, Sept 8, 2008. Many
development failures particularly those involving economic reform,
utility reform and large infrastructure projects have resulted from
ignoring the political, social and cultural context within which
the development intervention takes place, and not from a failure to
propose the right technical solution. The Impact of Communication
on Development, World Bank 2006. Clear communication with
stakeholders and the public appears to be a key element of an
effective reform strategy. International Institute for Sustainable
Development, Global Subsides Initiative, Untold Billions. 7
Slide 8
Strategic Communication Strategic Communication is the
development of programs designed to influence the voluntary
behavior of target audiences to achieve management objectives.
Slide 9
Communications Darwinism Define Be Defined Copyright 2003
Chlopak, Leonard, Schechter & Associates
Slide 10
Communication: Two-way approach Government Society Stakeholders
Information Comm. Office Social programs, laws, Projects Media
Slide 11
Types of Communication
Slide 12
Communication Strategy Framework Strategic Context Management
Objective: Communication Objective: Strategic ElementsWork Plan
ElementsEvaluation Key Risks AudienceCurrent and desired behavior
MessagesChannels/ Activity TimingResponsibilityResourcesExpected
Outcomes
Slide 13
Perception of Consumers One Initiative - Two Perceptions
INSECURITY REMOVING FUEL SUBSIDIES Entitled to low fuel costs
Reduced Income Higher costs for food fuel and transport Government
corrupt no transparency No salary increase Lower lifestyle Who
benefits where will savings go Anxiety & mental problems Less $
for school fees Might have to move for job Feeling Trapped GREATER
BUDGET SECURITY REMOVING FUEL SUBSIDIES Reduce corruption Better
macro economic situation More for education and health Better
governance More money in budget Improved economy Satisfy donors and
markets Leaner government Better living standards Better Life
Better environment Perception of Government
Slide 14
Defining Political Risk effective political risk analysis is
not just a question of evaluating a country risk. Instead, risk
assessment must identify the implications of social, political and
economic conditions of each particular development intervention.
The key to analyzing the political risks facing a project is to
identify the winners and losers and assess their relative ability
to help or hinder a project, whether directly or by influencing
others.
Slide 15
Political Risk is Highly Contextual IssueInternal Politics Time
Place Who is involvedHistory External environment Social and
cultural environment
Slide 16
Dimensions of Political Risk
Slide 17
Risk Differences: Fuel subsidy removal Political Risk:
Likelihood of political and social unrest; protests. No way to win
on issue but must pursue for budget purposes. Issue could fail
government could be punished in elections. Social Risk: People
believe that they are entitled to the benefits of oil and gas
industry or that the government owes them subsidized fuel as their
right. Cultural Risks: Driving a car seen as important for status
even for short distances. Using other means of transit seen as poor
peoples transportation.
Slide 18
Communication Based Assessment A process which obtains
information from the stakeholders allows us to recognize the
environment in which the development initiative will be
implemented; use the findings to shape the project before it is
implemented; bring certain stakeholders into the process; and
identify the information and communication gaps, and bridge them,
in order to achieve the desired impact. Through systematic analysis
of external actors, regime leaders, and the economic, social, and
political sectors, pressure and interest groups, and culture,
captures the relationships among key internal and external actors
and between those groups and government authorities. Public opinion
polling, as part of the CBA captures empirical information related
to the social, political, cultural, communicational and
institutional situation (including civil society participation) of
a development intervention.
Slide 19
Why use Survey Research ? Survey research objectively and
independently uncovers opportunities and identifies red flags,
obstacles and risks. Survey research can assess risk among a range
of stakeholders from opinion leaders to the general population.
Survey research allows you to track attitudes in order to have a
finger on the pulse of movement of risk
Slide 20
Which Research Methodology? Should be chosen on a case by case
basis that reflects the challenge your project/program faces. Also
based on information gaps from other assessments. The general
population's views may be best gathered through a combination of
qualitative and quantitative research. Topics are probably
sensitive when there is political risk to consider. Hence, use
independent firms to measure attitudes. Do not use firms that are
aligned with a political party. Choose a firm that has expertise in
the area of policy and is issue oriented. Exploration will require
a nuanced approach.
Slide 21
Reform Issues 21 Prepare
Slide 22
Reform Issues What was the political logic behind the
establishment of the subsidies? Often a mix of interest based
politics and some legitimate policy issues. On average the richest
20% now receive over six times more in subsidy benefits than the
poorest 20%. World Bank, Chief Economist for Africa, April 2012.
Yes we feel entitled to it and if government raises LPG prices next
week, as it inevitably will well scream bloody murder. Firstport
Jakarta May 24 2012 murder. 22
Slide 23
Reform issues The subsidies are the only tangible benefit the
poor can get in normal economies especially in resource rich
developing countries. Yale University, Global online, June 7, 2012.
Assuring the public that savings will be used well is critical
especially since many governments are viewed as corrupt and will
not use savings for peoples benefit. Embedding the reform within a
broader reform package. 23
Slide 24
3 Es 24 E motions E xpectations E ntitlement
Slide 25
Reform Issues 25 Focus on Outcomes Not Process!!!
Slide 26
What is consultation? Public consultation, or simply
consultation, is a regulatory process by which the public's input
on matters affecting them is sought. Its main goals are in
improving the efficiency, transparency and public involvement in
large-scale projects or laws and policies. It usually involves
notification (to publicise the matter to be consulted on),
consultation (a two-way flow of information and opinion exchange)
as well as participation (involving interest groups in the drafting
of policy or legislation)* *Wikipedia 2012 26
Slide 27
Language used by Government Essential step to revive the
economy and build investor confidence. A first step to fiscal
consolidation. Urgency to curb budget deficit to stave off a
threatened downgrade by credit rating agencies. Necessary to bring
order to public finances It is a credible step towards fiscal
consolidation that the government has taken something for which the
market has been waiting a long time. 27
Slide 28
Language Used by Opponents Black subsides Climate Spring
Financial terror Ending subsides only adds to the ranks of the poor
and threatens global security. A very cruel blow Those who want to
raise prices want to see this country burn. 28
Slide 29
Timing Tendency to undertake reforms too late often after a
series of other budget saving measures; in isolation; in a poor
economy; when fuel prices are high; people are already fed up.
Whether to go with big bang or slowly introduce reforms is highly
contextual : Is ultimately a political calculation partially based
on budget needs. Depends on the ultimate goal for reform. Is a
function of the political risk involved. Depends on the amount of
pain a government is willing to undertake and when it wants to take
it. 29
Slide 30
Transparency An effective political strategy benefits from
transparency in the cost and purpose of the subsidy. Many subsidies
survive because the parties that carry the burden are unaware of
the costs they are paying. Need to have an informed debate over
legitimate purposes of the subsidy. Public information allows for
an independent assessment of a subsidy policy. Disclose information
about how prices are formed (e.g. Ghana provides information on
taxes, distribution costs and refining margins). 30
Slide 31
Communication that Works 31 Ghana 2005 Outsourced research to
independent institute credibility Highlighted positive results of
subsidy reform and costs of inaction. President involved high level
commitment also high credibility in government. Finance Minister
led campaign Subsidy savings devoted to social priorities. Made
transparent and monitorable included elimination of school fees and
improved public transport Comparison to other countries showed low
cost of fuel in Ghana Multi media campaign radio broadcasts,
advertising, interviews Trade Unions still opposed but public
acceptance no large demonstrations.
Slide 32
Communication that Works 32 Indonesia 2005 2003 attempt failed
widespread distrust of government. Led large multi media
communication campaign newspapers, village notice boards,
televisions shows, FAQs Government greater popularity. Tied to cash
compensation scheme widely publicized. Carried communication
program throughout reform. responded quickly to problems.
