2005News

Subsidies don’t get to the poor

The subsidies the government provides on propane gas and electricity, a heavy financial burden for the National Treasury, do not always go to the neediest. In other words, according to Alexander Pena of El Caribe, the expenditure of the RD$20.86 billion budgeted for this year, 2.4% of the GDP, along with US$700 million, does not reach the people it is supposed to help. According to a study by the Juan Montalvo Center for Social Studies and the Center for Economic Research in the Caribbean (CIECA), a large part of these resources flow to high income sectors because of a lack of “equal distribution” that allows a focusing on the neediest, based on people’s income and expenditure. According to their numbers, the poorest 20% of the population spend 0.37% of income on propane gas for cooking while the richest 20% spend just 0.11% of income on the same product. Considering total household expenditures, propane uses 0.47% of the bottom fifth of the population and only 0.23% of the total expenditure of the top fifth.