Kuala Lampur, June 2 -- There is a peculiar kind of madness in the world. We are talking about fuel subsidies. In capitals across the world - from Jakarta to Abuja, New Delhi to Brasilia - policymakers are trapped in a ritual as predictable as it is destructive. Every time global oil prices spike, the same debate erupts. And every time, we settle for the easy lie: that subsidising fuel is an act of mercy.

Let us be clear of the fact that the good, the bad, and the ugly of this policy are not three equal columns on a ledger. They are a cascade of failure, and we are already halfway down the cliff. Yes, on paper, fuel subsidies help the poor. A fisherman in a remote village needs diesel. A single mother driving a battered rickshaw needs ga...