Subsidies are not just wasteful but quite a lot of it ends up fattening up the already fat cats, says the International Labour Organisation (ILO). Subsidies are not just wasteful but quite a lot of it ends up fattening up the already fat cats, says the International Labour Organisation (ILO). A report published by the ILO points out that subsidies in general, all over the world, tend to be large and “wasteful” as they most often go to the rich.
The report looks at the role of subsidies, and how they affect a country’s economy and consequently the economic welfare of its people.
“Subsidies”, according to the report, “always induce inefficiency. They are bad economies. They are bad social policy.”
Sri Lanka, which falls into the ‘much to be done’ category of countries was not among the 15 countries studied in depth for the report but findings on subsidies are just as applicable.
“When the assertion is made that a government ‘cannot afford’ to provide its citizens with basic economic security, the first place to look for potential funds is the subsidy pool, to determine whether or not subsidies are efficient, or contributing to pub