WE HAVE A SERIOUS PROBLEM97uprising, unrest is not the typical outcome. All but five of twenty- eight
substantial energy subsidy reforms documented by the IMF in the past
two decades met with some success.^35 Among energy exporters, Indo-
nesia, after failed attempts in 1997 and 2003, successfully raised fuel
prices in 2005 and 2008 and reduced its subsidy load from 3.5 percent of
GDP in 2005 to 0.8 percent by 2009. Yemen also managed small reduc-
tions in fuel subsidies, which, however, still accounted for 7.4 percent
of 2009 GDP. Mexico eliminated gasoline subsidies in 2014 after raising
them at various times, including in 2005 and 2006.^36 Mexico’s attempts
to cut electricity subsidies between 1999 and 2002 failed, however, and
in 2016 the government was still paying half the cost of residential elec-
tricity.^37 Malaysia underwent a series of attempts to reduce fuel subsi-
dies, some of which were reversed following public outcries. By 2014,
however, Malaysia managed to eliminate price supports amid low global
oil prices.^38 Nigeria’s fuel price reforms of 2011– 2012 triggered antigovern-
ment unrest but still managed to reduce subsidy costs from 4.7 percent
to 3.6 percent of GDP.^39 A further Nigerian reform in 2016 eliminated
price supports.^40
Can the Gulf monarchies come to grips with the consequences of
their long hiatus from market prices? Two pioneering cases provide
clues. Iran and Dubai both launched ambitious price reforms, with
mixed results. I’ll explore these in the next chapter and in chapter 8
will turn to Saudi Arabia to study a young leader’s attempt to take on
this knotty problem that his predecessors avoided. Chapter 9 unveils
the near- simultaneous changes in energy prices in the rest of the Gulf,
from low- level tinkering in Kuwait to a foreigner- focused approach in
the United Arab Emirates.