Thanks for this. However, could you say more about how extending LEAP by 75,000 will reverse the poverty impacts of the removal of the fuel subsidies? As you note, 395,000 people were pushed under the poverty line so wouldn’t it require almost perfect targeting by LEAP to reach these people (yet we know that targeting is pretty poor on LEAP). And, presumably, LEAP beneficiaries are meant to be well below the poverty line anyway - it would only reach around 2.5% of the national population even with the increase - so few people near the poverty line are supposed to benefit. Furthermore, I’m guessing that many more people than the 395,000 pushed under the poverty line are experiencing greater poverty so how are they helped by a programme as small as LEAP.
It’s interesting to compare the targeting of benefits to the "poor" with the approach taken in Iran where compensation was provided on a universal basis, with all those living in and vulnerable to poverty able to benefit. I’ve attached an IMF report, if you’re interested. As we all know, benefits for the “poor” tend to be poor benefits.
It would also be interesting to know how much was saved by government by cutting the fuel subsidies and how much of this was spent on the increase in LEAP. It seems to me that LEAP is a programme without strong political support - hence the reason it reaches only 2.5% of the population (and requires significant donor support) - so I’d be interested in knowing whether a meaningful proportion of the fuel subsidy savings was passed on to LEAP.
Stephen KiddSenior Social Policy Specialist
Development Pathways UK