Power and jobs

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The obvious relation

Two billion dollars. That is the figure the World Bank puts on our annual power sector deficit. In its recently published report titled “More and Better Jobs in South Asia”, the WB cites the power deficit as a significant cause of unemployment in the region. That is an interesting approach to study the effects of the power crisis. The bank estimates that around 400,000 jobs were lost in Pakistan owing to industrial load-shedding.

But it is not Pakistan alone that is suffering from power outages. Bangladesh, for instance, has a peak time deficit of one gigawatt, which accounts for 13 per cent. India’s deficit can go to 12 gigawatts, or 10 per cent. The study says the region has a whopping 600 million people without electricity, which makes up more than 40 per cent of the global total. What exactly is wrong with South Asia?

Nothing, first of all. There has been great industrial growth in the region, coupled with the spread of tube-wells and other mechanised and electric powered tools in the agricultural peripheries. The grids of these countries simply haven’t caught up with these developments. If, theoretically, a magic wand were to make just the power problem go away, the other ingredients for significant economic growth are present along with their catalysts. Even mushroom clouds have a silver lining, this is but a mere structural problem.

Second, the international markets for fuel are acting up. This does not bode well for thermal power plants, a significant proportion of our respective power profiles. In India, for instance, 17 per cent of the total capacity is based on diesel fuel alone. In Pakistan, the Musharraf regime failed to forecast the power demand growth accurately and its effects were felt well within its tenure in power. The demand grew unabated into the next government’s term. Though the problem can be, for the most part, put on the military regime, the incumbents don’t have much by way of a plan to show for themselves on this front.

The solution is simple but tough to carry out. First, a rationalisation of the price structures; if domestic prices of petroleum products reflect changes in the international markets, so should power tariffs. Then, initiating newer projects, be they run of the river projects or smaller dams, to increase our hydel capacity. Simultaneous to this, capital should be pumped in to take care of the circular debt; the newer capacity augments will ensure the debt doesn’t ratchet up again.

While the aforementioned is being attempted, perhaps the authorities could take decisions to prioritise industrial users over households. Won’t be palatable politically, yes, but stable livelihoods yield greater political mileage than well-lit houses.