Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

Oil subsidies and Asian diplomacy

By James Norman - posted Friday, 11 July 2008


Here in Bangkok, when demonstrations hit the streets it is not just a matter of a few earnest folk wielding placards and chanting slogans. As we saw in September 2006 with the overthrow of Prime Minister Thaksin Shinawatra, street protests here can easily spill over into full scale civil unrest and the toppling of governments.

Kevin Rudd has made it his business to engage in pro-active diplomacy with Asia, as evident by his two visits in his relatively short time in office.

Evidently, there is much to be gained from Asian engagement such as trade advantages, the promotion of regional stability and positioning Australia to wield significant influence over the sustainable and peaceful development of the Asia Pacific region into the 21st century.

Advertisement

However, on this last point, the federal government will have to walk a much more conciliatory and sophisticated line if it is to be a successful regional leader, if the recent calls for Asian governments to halt their oil subsidies are anything to go by.

Comments by energy Minister Martin Ferguson suggesting that Asian fuel subsidies pose the biggest threat to Australian motorists might be well intentioned, but there is a real danger that the comments will be received here in Asia as at best naïve, or worse as a kind of thinly veiled imperialism.

Ferguson is right that subsidies on fuel will lead to increases in its consumption, and that this is a major problem in the context of rapidly diminishing oil supplies; and it is true that more than 50 per cent of Asian fuel consumption is occurring in countries with fuel subsidies.

But Ferguson seems to have failed to grasp the scope of the response that such changes would unleash in Asia.

If Asian countries were to follow Ferguson's recommendations tomorrow and cut their fuel subsidies, Asia would be plunged into mass civil unrest - and the cost to our regional economy would be devastating, not to mention the impacts of large scale regional instability.

Take Malaysia as an example. There the government lifted its subsidies on oil prices last month, meaning a 41 per cent in the price of gasoline and a 63 per cent increase in the price of diesel fuel. The result has been the biggest ever protests against Prime Minister Abdullah Badawi took place last week in Kuala Lumpur.

Advertisement

Here in Thailand, already in the grip of an ongoing street protests in Bangkok and Chiang Mai around constitutional changes, disgruntled farmers and fishermen have given the government notice that they will take to the streets en masse unless subsidies on fuel are put in place to help these workers meet the spiralling costs of living.

Western business leaders and governments have complained that Asian oil subsidies are distorting international markets, and giving some Asian countries an unfair advantage. "When it comes to energy, particularly oil, and increasingly gas, the world is retreating from the open markets and free trade we have worked so hard to achieve since World War II," Martin Ferguson said.

Similar sentiments are being voiced with regard food subsidies. Peter Brabeck-Letmathe, chairman of Nestlé, speaking at the World Economic Forum on East Asia in Kuala Lumpur recently, said food subsidies distorts the free market and therefore have a negative impact on the availability of food. “I am absolutely against food subsidies,” he said.

Both Ferguson and the Nestlé chairman are walking a very fine line here.

How do we measure global market productivity against the capacity of people to power their boats to fish, or their trucks to carry on daily work, or to ensure their families have enough to eat? Where does the free market ethos break down when weighed up against the very means of daily survival for some of Asia's poorest workers?

In Australian, as in the rest of the world, the rising cost of petrol is a serious problem. To some it might mean real financial hardship. But in many Asian countries, the cost of fuel is actually a matter of daily survival.

Thai fishermen have said that they will burn their boats if the government doesn't help them meet their living costs. Malaysian taxi drivers have said they will have to stop work because with the recent price hike, they will be running their taxis at a loss - the more they drive, the more they lose.

The underlying imperative to find new ways to reduce global fuel consumption is an urgent one, and it is good that the Australian government is seeking to look for those urgent solutions.

But to take the position that Asian countries have to halt their subsidies, subsidies designed to alleviate the hardship of some of our regions poorest, is a dangerous position that leaves the door open for Australia to be accused of reckless meddling in the affairs of sovereign states.

Instead, Australia needs to set the lead in the shift to more sustainable transportation and energy generation that we can then export to Asia, thus providing real long term energy alternatives to our region, while simultaneously promoting economic growth in Australia in renewable energy industries.

  1. Pages:
  2. 1
  3. 2
  4. All


Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

8 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

James Norman is communications coordinator for the International Campaign to Abolish Nuclear Weapons. He is a contributor to The Age, The Australian and the Herald Sun. He also wrote Bob Brown's biography for Allen & Unwin.

Other articles by this Author

All articles by James Norman

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Photo of James Norman
Article Tools
Comment 8 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy