April 20, 2024

Nigeria Rolls Back Gas Price After Protests

Faced down by thousands of demonstrators, demands for his removal and a weeklong general strike that paralyzed his fractious country, President Goodluck Jonathan abruptly gave in, partly restoring the fuel subsidy that — more than an Islamic insurgency in the north or a long-running conflict in the south — seemed to crystallize the frustrations of the people and draw them to the streets in outrage.

“Government appreciates that the implementation of the deregulation policy would cause initial hardships,” Mr. Jonathan said in a stiffly worded capitulation on Monday, after a week of refusing to back down.

Similar scenes have played out around the world in recent years, from Latin America to the Middle East to Asia, and the government response is frequently the same: give in quickly, despite the counsel of economists and international financial institutions that fuel subsidies are wasteful and distorting, sapping governments of money that could otherwise be used to improve education, public health or other needs.

The Nigerian government spends about $8 billion a year on fuel subsidies, and getting rid of them would be “an important first step” to shoring up the finances of one of Africa’s largest economies, according to a 2009 International Monetary Fund report.

But in resource-rich countries like Nigeria, with its enormous gap between rich and poor, subsidized gas is one of the few benefits trickling down from an infamously corrupt government that has pocketed billions of dollars in oil profits, with little to show for it.

For the poor — and three-fourths of this country’s population lives on about a dollar a day — the fuel subsidy means a cheap ride to the market. It means lower prices for the food they buy there. And it means some sense of ownership in a national resource, oil, in which roughly 80 percent of the economic benefit has flowed to 1 percent of the population, according to some estimates.

“It’s one of the few ways the urban and rural poor feel they benefit from this strategic resource,” said Michael J. Watts, an expert on the politics of oil at the University of California, Berkeley. “The fuel subsidy is experienced as one of the few things they get.”

That sentiment was strongly in evidence as the protests dwindled here on Monday. Under the rollback union leaders agreed to, gas in Nigeria will drop to about $2.27 a gallon from about $3.50 — higher than the $1.70 price before Jan. 1, but low enough to end the strike.

Still, many Nigerians were disappointed that Mr. Jonathan had not dropped the price all the way back down.

“We are not benefitting from this oil,” shouted Ali Mohammed, a motorcycle-taxi driver. “No lights, no roads, no hospitals. Make him reduce the price. We are suffering in this country.”

Hundreds of other young men milled about close by in what has been a center of the protest here: the New Afrika Shrine nightclub of the Afro-beat star Femi Kuti, son of the Nigerian musician and dissident Fela Kuti.

In a speech Monday morning, Mr. Kuti both incited and calmed the crowd listening at his feet amid clouds of marijuana smoke, expressing disgust with Nigeria’s institutions from his rickety wooden stage as supporters murmured their approval.

Later in his office, Mr. Kuti shouted at his television as he watched the labor leaders announce the end of the strike. “I told you those people would back down,” he said to his aides, looking up from the screen. As for the government, he said, “They prosecute people for being gay, but there is no law against stealing 14 million.”

Nigeria has seen similar tumult over the issue in the past, and it is hardly alone. In Bolivia, protesters burned photos of President Evo Morales and vandalized government buildings in December 2010, forcing Mr. Morales to withdraw his subsidy-cutting measure only days after introducing it.

In Venezuela, before the rise of Hugo Chávez, days of riots and hundreds of deaths followed a fuel price rise in 1989. President Chávez now controls one of the world’s most generous fuel subsidies, despite being critical of it.

In Jordan, an announcement last year that subsidies would be lifted helped inspire antigovernment demonstrations that forced a reversal. In Indonesia, a 30 percent increase in fuel prices in 2008 led to bloody rioting. Economists nonetheless praise that country for doing what others often do not: sweetening subsidy removal with cash programs that aid the poor.

Ethan Bronner contributed reporting from Jerusalem, Rick Gladstone from New York and Simon Romero from Rio de Janeiro.

Article source: http://www.nytimes.com/2012/01/17/world/africa/nigerian-president-rolls-back-price-of-gasoline.html?partner=rss&emc=rss

Obama Seeks Aid for Egypt and Tunisia at Meeting

These crosscutting pressures show the complexity of the Arab upheaval and the responses it is drawing from major powers. While the United States is emphasizing the need to stabilize the economy of Egypt, its major Arab ally, France and Britain are eager to intensify the NATO airstrikes on Libya’s leader, Col. Muammar el-Qaddafi.

These goals are not mutually exclusive, American and European officials said. The United States said it expected the Group of 8 countries — France and Britain, among them — to express strong support for efforts to generate jobs and revive growth in Arab countries.

“Chancellor Merkel, President Sarkozy, a number of leaders, have all stressed the importance of using these meetings to show a unified front in providing support for Egypt and Tunisia,” Benjamin J. Rhodes, Mr. Obama’s deputy national security adviser, said of Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France.

Libya and the Arab world dominated the meeting of world leaders in this fashionable seaside resort in Normandy. Mr. Sarkozy, the host, is still pushing for the United States to deploy A-10 attack aircraft and AC-130 gunships in Libya, said a French official, though he said Mr. Sarkozy was making his pitch privately.

At a news conference here, the French president reiterated his call for Colonel Qaddafi to relinquish power. “We’re not saying he should go into exile,” Mr. Sarkozy said. But he “cannot stay in power.”

Mr. Obama, who has rejected calls for more combat aircraft, is trying to keep the focus on economic stability and jobs in Egypt and Tunisia. At the same time, he is relying on European governments and international financial institutions to supply much of the capital.

Prime Minister David Cameron told Mr. Obama on Wednesday that Britain would support the effort, and it would pledge $178 million. American officials said they had gotten encouraging signs from Germany and France, even if neither has made a concrete pledge.

The International Monetary Fund, which has had a team in Egypt for the last week, is readying a package worth $4 billion to $5 billion to help it bridge a financing gap, a fund official said. Egyptian officials said their economy, damaged by unrest that halted trade and tourism, will need an infusion of $12 billion just this year to steady itself.

Last week, Mr. Obama announced $1 billion of debt relief and $1 billion in loan guarantees for Egypt. The European Union plans to increase its aid by $1.75 billion.

The United States and Europe have played down expectations of a big dollar total, saying this is not a pledging conference. That partly reflects the bitter experience of past summit meetings, where tens of billions of dollars were pledged to alleviate poverty and many countries dragged their feet in delivering on their promises.

It also reflects the fact that the most cash-rich countries — as well as the ones with the most incentive to support stable Arab countries — are their neighbors in the Persian Gulf. The Obama administration is focusing much of its efforts on persuading Saudi Arabia and other gulf countries to make pledges to Egypt and Tunisia, officials said.

The Group of 8 is also expected to take a harsh stand against Syria’s crackdown on pro-democracy protesters, officials said. That may require some arm-twisting, however, since Russia has opposed efforts to impose United Nations sanctions on the Syrian government.

Conceding those differences, Mr. Rhodes said, “We want to have a strong and unified voice that we’re speaking with our allies and all who share concerns for the rights of the Syrian people.”

The Libyan campaign was high on the agenda when Mr. Obama met for 90 minutes with Russia’s president, Dmitri A. Medvedev. But they also discussed Russia’s bid to enter the World Trade Organization and efforts to settle disagreements over the deployment of an American missile-defense system in Eastern Europe.

Russia is less bitterly opposed to missile defense than it was a year ago, an American official said. But he said the Russians remained suspicious that the most advanced version of the system — not scheduled to be deployed until 2020 — would threaten their nuclear defenses.

“They have a perception that when we get to that phase, that there may be some capability to threaten what we call strategic stability,” said Michael McFaul, senior director for Russia at the National Security Council. “We have no intention of doing that.”

Mr. Medvedev and Mr. Obama appeared stern-faced after their session, but American officials insisted it went well. Their expressions, one said, reflected only the stuffiness of the room.

Despite much anticipation, the leadership void at the I.M.F. did not figure much in hallway chatter. The French government is promoting its finance minister, Christine Lagarde, as a candidate to succeed Dominique Strauss-Kahn, who has been charged with the sexual assault of a hotel maid in New York.

The Obama administration remains noncommittal on her candidacy, saying only that it wants the most qualified person. But a French official said he was confident that Ms. Lagarde, who did not attend the meeting, had amassed enough support to win the managing director post.

Liz Alderman contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=118f4bfb0ad4abbf78fc33fc73bfefb6