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Communication and Fossil Fuel Communication and Fossil Fuel

Communication and Fossil Fuel - PowerPoint Presentation

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Communication and Fossil Fuel - PPT Presentation

Subsidy Reforms APEC Koh Samui March 18 2013 Paul Mitchell 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 perio ID: 550037

communication political government reform political communication reform government fuel risk public subsidy subsidies 2012 information social development issue process

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Slide1

Communication and Fossil FuelSubsidy Reforms

APEC

Koh

Samui

March 18 2013

Paul MitchellSlide2

Communication Integral to ReformFuel 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.

2Slide3

Political Unrest3Slide4

Political Unrest “An oil price hike by Bangladesh has sparked a call from opposition parties for a nationwide strike. Bangladesh’s 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.

Slide5

Politics and Subsidy ReformGovernments 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

5Slide6

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

6Slide7

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

.

7Slide8

Strategic Communication

Strategic Communication isthe

development

of

programs

designed

to

influence

the

voluntary behavior

of

target

audiences

to

achieve

management objectives

. Slide9

Communications Darwinism

Define

Be Defined

Copyright © 2003 Chlopak, Leonard, Schechter & AssociatesSlide10

Communication: Two-way approach

Government

Society

Stakeholders

Information

Comm.

Office

Social programs, laws,

Projects

MediaSlide11

Types of CommunicationSlide12

Communication Strategy Framework

Strategic Context

Management Objective:

Communication Objective:

Strategic Elements

Work

Plan Elements

Evaluation

Key Risks

Audience

Current and desired behavior

Messages

Channels/

Activity

Timing

Responsibility

Resources

Expected

OutcomesSlide13

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 GovernmentSlide14

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.”Slide15

Political Risk is Highly ContextualIssue Internal Politics

Time

Place

Who is involved

History

External environment

Social and cultural environmentSlide16

Dimensions of Political RiskSlide17

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.Slide18

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.Slide19

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 Slide20

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.Slide21

Reform Issues21

PrepareSlide22

Reform IssuesWhat 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 we’ll scream bloody murder.”

Firstport

Jakarta May 24 2012 murder.”

22Slide23

Reform issuesThe 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 people’s benefit.Embedding the reform within a broader reform package.

23Slide24

3 E’s24Emotions

ExpectationsEntitlementSlide25

Reform Issues25

Focus on Outcomes Not Process!!!Slide26

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

26Slide27

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.”

27Slide28

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.”

28Slide29

TimingTendency 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.

29Slide30

TransparencyAn 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).

30Slide31

Communication that Works31Ghana 2005

Outsourced research to independent institute – credibilityHighlighted 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.Slide32

Communication that Works32Indonesia 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.Slide33

Fill Your Reform with Communication33