Example Of The Government’s Role In Setting Energy Policy Of Bangladesh Essay
During the last two decades Bangladesh has been experiencing increase in energy consumption. As far as the country aims at becoming a middle-income State by 2021, this tendency will only intensify in the future with the economic growth and development accelerating. Bangladesh now is entering a range of per capita income between 1000 USD and 10000 USD that according to other countries' experience will lead to prompt energy consumption rise. Such trend must be met by sufficient energy supply “in order to sustain the country's growth momentum.”
Energy is vital component that makes economic development possible in every country that in its turn results in better standards of living for every citizen. Electricity is the key form of energy used in Bangladesh. Electricity consumption trend is presented on the chart 1.
Electricity Consumption, Bangladesh, 2000-2012
Source: data adapted from IndexMundi.
Nowadays state-owned electricity plants and other utilities are unable to provide enough supply thus suffer from huge deficits. The energy crisis that the country is experiencing now mostly is a result of the government's failure to attract private investments in this sector because of inadequate pricing policies and other bottlenecks.
The chief aim established by the current government was to ensure “access to affordable and reliable electricity for all citizens by 2021”, however, almost a half of he population are left without access to electricity with the supply being hardly reliable. The government tries to improve the situation by all means possible. It has adopted a comprehensive energy development strategy where attention is mostly focused on supply-side problems and effective demand management that includes reasonable use and proper distribution.
The key issue now is to treat electricity as a private good with its price reflecting the production costs. This invokes the necessity of policy reform that will deal with proper pricing and generating of a fain return on investments. The government should consider the world's best practices and develop a strategy that would suit the Bangladesh economy most. Such a reform being a reform for the government must also include social issues thus use of cross-subsidization and explicit budget subsidies.
With the market being uncertain in Bangladesh and development is s key goal, the government is responsible for the infrastructure. This is why it faces such challenges as financing, design Know-how, construction Know-how and O&M Know-how. Although the government has an access to multilateral agencies that develop Know-how, this is not enough for granting sustainable development. Private sector must be also interested in research and development process that may allow to lessen the price and raise effective consumption. However, this task is difficult for a developing country such as Bangladesh because it imports almost every technology. The government should seek an opportunity to obtain Know-how in the energy sector. The ways of transfer are documentation transfer, organization of study process for scientists or participation of foreign experts in the production process. Know-how as an example of technical knowledge and production secrets that include technological, economic, administrative and financial information, may grant some developments in energy problem solving in Bangladesh based of foreign experience. First of all, new ideas and know-how must regard “renewable energy and energy conservation.”
“Electricity Consumption: Bangladesh.” IndexMundi. Accessed 2011. http://www.indexmundi.com/g/g.aspx?c=bg&v=81
Mujery, Mustafa, Tahreen Tahrima Chowdhury and Siban Shahana. “Energy sector in Bangladesh: An Agenda for Reforms.” Bangladesh Institute of Development Studies. March 2014. http://www.iisd.org/gsi/sites/default/files/ffs_bangladesh_agenda.pdf
Sudrathar, Bikash. “Green Energy Financing in Bangladesh.” IFAD-APRACA FinPower Regional GreenFinance Forum. March-April 2010. http://www.academia.edu/2094424/Green_Energy_Financing_in_Bangladesh