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Arab countries are wasting tens of billions of dollars on subsidies for petrol and energy but dare not roll them back for fear of a political backlash, a UN report said.
The UN Development Programme (UNDP) report this week said six of the world’s 10 biggest subsidizers are in the Arab world, led by Kuwait, Saudi Arabia and Qatar. People in the three countries pay less than a third of world prices for car fuel and electricity.
The annual cost for Saudi Arabia is more than $43 billion, $4.15 billion for Qatar, $10.59 billion for Algeria, the report said quoting International Energy Agency figures.
In Egypt, the top 20 percent wage earners get 33 percent of the energy subsidies, against 3.8 percent for the poorest families. For gasoline, 93 percent of the subsidies go to the rich.
The subsidies also distort the economy by encouraging waste and holding up investment in renewable energy, the report said. Energy consumption in the Arab world tripled between 1980 and 2008.
UN researchers said the money could be better spent on infrastructure and social spending.