I’ve been writing on Bangladesh’s power and water crisis. Admittedly I’ve been playing catch-up, because the story has been written up in The Daily Star and other news outlets. Nevertheless, it’s not a story that has reached an international audience, principally because the story, though a milling centipede does not have legs. No one has been massacred; there are no bombs to blame. But the cycle churns, and the lights still go out in the city.
Bangladesh’s political and economic rapprochment with India has been spurred on by the running and impending power crisis. As a political matter, the BNP has taken the Awami League to task for supposedly selling out Bangladesh’s sovereignty for a few utility poles. But these are nearly academic arguments for the chronic power outages in Bangladesh are costing Bangladeshis their livelihoods.
Consider Zahid Husain’s analysis on The World Bank’s “End Poverty in South Asia blog:”
“Bangladesh failed to invest enough in power generation while the rest of the economy boomed—manufacturing and construction in particular. The latter not only contributed to rapid income growth but also even faster growth in demand for power, which has now become the Achilles’ heel of the economy.”
“With power generation not growing even remotely as fast, this is now choking growth in the rest of the economy despite the fact that the latter have enough workers who are willing to do all the hard work and enough owners who have already installed the machines and procured the materials with which these workers can work to produce goods. The economy is missing out on boosting domestic incomes and fetching precious foreign exchange earnings.”
In the midst of a global recession, every day that Bangladesh’s utilities cannot generate enough power, its economy bleeds energy and capital. The externalities–spillovers to other sectors of the economy–are overwhelmingly costly to Bangladesh’s relative, counterfactual, long term economic outlook. Imagine what the IMF and the World Bank might have written up in their reports if every factory in Bangladesh could run without shutting down for a few hours every other day or so!
Consider again Zahid Husain’s admonition:
“Economists view “inefficiency” as a state of the economy in which you can actually or potentially make some people better off without hurting anyone else. The current power crisis in Bangladesh is a classic case of inefficiency.”
The sitting government needs to move faster to move the marker on power self-sufficiency to the pareto-frontier, that imagined place in our mental models where we might be indifferent between two resource or asset allocations because things are as good as it gets. At this moment, we are (light) years away from this new–fortuitously final–frontier.
