Solar energy to mitigate the problem of power shortage

Solar home equipment

Bangladesh is populated by a huge 162 million people. The people are mostly rural based, poor and live their life doing cultivation and small businesses. Roughly 25 per cent people live in the urban areas. After 1990's, Bangladesh is experiencing a rapid growth in its economy. Industrialisation is mainly contributing to the economic growth by giving the pace in the wheel of development. Nevertheless, many problems encumber our economic development and the most acute one is power crisis. No less than 40 per cent of the total population is deprived of the blessings of electricity. The main consumers of electricity are residential places and industries. In the summer times like now the demand for electricity is the highest. Now-a-days total demand for electricity is about 6700 MW of which the government is capable of supplying roughly no more than 5000 MW against the soaring demand. Hence, we are undergoing an anticipated load shedding which also varies by duration in various neighbourhoods. It could be sour to hear but true that the government will not meet the full demand of residential houses by depriving the industries to retain the full swing of economic growth.

This is the high time to think about alternative energy production which could solve the problems. One of the options could be the solar energy which best fits with our country conditions as nature blessed us with relentless sunlight. More than one million households in off-grid areas use solar system but regrettably solar energy is not being used where it should be, in the megacities like Dhaka. People use diesel-based backup power in the apartments and commercial buildings at the time of power failures but the supply of diesel is limited in the world and its use adversely affect the environment, including air and sound pollution. Solar home system (SHS), on the other hand, is completely environment-friendly, reduce pressure on grid electricity, reduce load shedding and free up power to supply to the off-grid people. 

According to a report of April of this year, per unit price of electricity, for residential connections, ranges between Tk 3.05 and 7.90. Per unit price of electricity for small industries is Tk. 6.02. For lean periods, the rate is Tk. 5.11 per unit. For peak hours, it is Tk 7.33. For big industries, per unit price of electricity is Tk 5.90. The flat rate is Tk 5.16. During peak hours, it is Tk 8.08. According to the Power Development Board (PDB), per unit cost of electricity (on an average) is Tk 6.68. However, the cost for fuel-fired plants is Tk. 16. 

The government has to subsidise the power sector to supply electricity at a lower rate to the consumers. As a result, other sectors suffer fund crisis and the huge subsidy widens the budget deficit. If the government decreases the subsidy on electricity to develop other sectors; inflation soars on the ground of electricity price hike and it dwindles the purchasing power and swells the woes of the people. To meet the soaring demand the PDB operates some fuel-run power plants but it needs to spend Tk 200-240 million (Tk 20-24 crore), a day to produce power from the fuel-run plants. However, Tk 90 billion (Tk 9,000 crore) is needed to buy fuel, but the finance ministry is ready to pay only Tk 62 billion (Tk 6,200 crore) and due to this financial crisis, the PDB is not able to produce power to its capacity and there are frequent power cuts every day. 

High-rise buildings, both residential and commercial, are built in Dhaka city with no proper urban planning. Now-a-days building apartments by developers are very common. The landlords and developers in Dhaka are cash-rich and high-yield earner through house rent and flat sale respectively. The government should compel them to establish SHSs on rooftops to cover the maximum usage of power from solar systems. According to Dr A K Enamul Haque, Economics professor at the United International University, there is opportunity in Dhaka city alone to produce nearly 600 MW of electricity if all dwellers produce 10-20 per cent of their power consumption using solar systems.

Therefore, the builders and land developers should design the land area and buildings in a fashion that is environment-friendly and more prone to seizing the unhindered sunshine. Many developed and developing countries use solar system for meeting their demand of electricity. For instance, Gujarat in India has set up a Solar Park with 600 MW capacity. Approximately 8.0 million tonnes of carbon dioxide emissions will be reduced by the park annually.

The government has already taken some measures to popularise SHSs but the exposure is very low. What the government should do is to make a specific law on using SHS for power generation. 

This article was publishes on The Financial express, Views & Opinion, (Monday, May 28, 2012)

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Need for keeping a close watch over sustainability of public debt

  
 By Asif Reza Akash

"Blessed are the young, for they shall inherit the national debt" — Herbert Hoover

When a government spends more than it collects in taxes and other forms of revenue, it has a budget deficit. This deficit is financed by borrowing from the private sector. The accumulation of past borrowing is national/government/public debt. Generally, contents of public debt are: a) currency (when the central bank is a part of government), b) short-term debt (e.g. treasury bills), c) floating debt (e.g. provident fund, small savings etc.), d) special floating debt (e.g. issued securities to international organisations like International Monetary Fund (IMF), the World Bank (WB) etc., e) permanent/funded debt (maturity is usually between three and thirty years), f) external loans (obligations owed to foreigners- governments, institutions, firms or individuals). In general, however, the currency obligations of the government are usually excluded from the definition of the public debt and only the floating, funded, external and other obligations are included in it. 

The most popular source of taking debt is foreign aid. Most laymen think that aid is something that is non-repayable in nature. But the fact is, depending on the conditionalities, aid may be in the form of 1) hard loans, 2) soft loans, 3) grants, 4) tied aid and untied aid. The recipient country has to pay higher amount of interest (at the commercial rate) for hard loans, and nominal interest at the rate of two per cent or less with long repayments period in the case of  soft loans ordinarily received from international financing institutions. In the case of tied aid, procurement of goods and services from the donor country is obligatory, but in the case of untied aid, the recipient country is free to procure the goods and services from any country at a competitive price. All aid except grants adds to the debt burden of the recipient country and has to be repaid.

Whether public debt is a curse or a blessing is a very debatable issue in the field of macroeconomics. The first US secretary of treasury and economist Mr. Alexander Hamilton believed that "a national debt, if it is not excessive, will be to us a national blessing." While the fourth president of the USA Mr. James Madison argued that "a public debt is a public curse" .Whether public debt is a curse or a blessing but public borrowings have a profound effect on various dimensions of economy; distribution, capital accumulation, income and employment stability, and so forth. This way, public debt is both a source of problems and a tool of economic management in the hands of the authorities concerned. Simply, as long as the return on investments is higher than the cost of borrowings, public debt is beneficial until then. But most economists are critical of the external aid because of its adverse macroeconomic effect.

According to a research titled 'Analyzing Bangladesh's Debt Sustainability Using SimSIP Debt' by Bernhard G. Gunter and A. F. M. Ataur Rahman, Bangladesh's total public debt at the end of 1993, amounted to Tk 725 billion. Six years later, at the end of 1999, it just surpassed the Tk 1.0 trillion level; and at the end of 2006, Bangladesh's total public debt amounted to nearly Tk 2.0 trillion (about US$32 billion). The amount has still continued to increase. This increase in public debt levels has worried many observers inside and outside Bangladesh. Such trends seem to indicate that Bangladesh's debt is not sustainable. However, calculation of Bangladesh's public debt as per cent of its gross domestic product (GDP) provides a different picture; this ratio has actually decreased from 58 per cent in 1993 to less than 47 per cent in 2006. According to CIA world fact book, the data to Bangladesh's public debt as percentage of GDP were as followed:

Country	2004	2005	2006	2007	2008	2009	2010
Bangladesh	43	44.5	46.7	37.4	34.5	39.7	39.3

However, Bangladesh, forty years ago, was a country with abysmal poverty among the economic of the world. Henry Kissinger openly referred Bangladesh a,' a bottomless basket case'. But the living standard of its population has been improving and poverty has extensively been on the decline. Nevertheless, the amount of public debt does not always matter; rather, the sustainability of public debt matters. 

Bangladesh Economic Update, a report published by Unnayan Onneshan, a multi-disciplinary research centre based in Dhaka, revealed that the public debt issue was putting an upward pressure on real interest rate crowding private investment out. Public debt is also increasing the demand for debt servicing payments and reducing the government's capacity for public investment. The spending in the social sector has been the prime causality of this development. The per capita debt burden in fiscal year (FY) 2010-11 in Bangladesh increased 8.41 per cent than that of FY 2009-10, rising from $151 to $163. This is 22.99 per cent of Bangladesh's per capita GDP and it might increase to $171.83 in FY 2014-15, reflecting an increase by 5.42 per cent, the report said. Total debts of Bangladesh in FY 2010-11 stood at about $23,322 million, which was 22.21 per cent of its total GDP. Total domestic borrowing as percentage of GDP remained between 1.5% and 3.0% of GDP over the last ten years, according to the report. In FY 2010-11, total external debt of Bangladesh stood at $21,347.4 million which was 20.24 per cent of its GDP. The government may have to borrow Tk. 177.57 billion from domestic sources in FY 2014-15 and its outstanding external debt will then stand at $23.47 billion, according to figures reported by a national English daily in one of its recent issues.

Every year an increasing amount of our budgetary expenditure has to be spent on payments of interest on the outstanding amount of public borrowings on a cumulative basis and also on debt amortisation i.e. , repayment of the principal amount of such debts in phases. The overall debt service now involves annually more amount of more than what is spent on social security, safety net and welfare, out of the annual budgetary allocation. Furthermore, excessive borrowing from the banking sector, as has been witnessed in recent times, tends to crowd out the private sector, in terms of their access to bank credits. If this trend about government borrowing continues, this will also impact adversely its capacity to extend development spending. 

Against this backdrop, the government should try to keep a careful watch on the sustainability of the public debt. Every effort should be made by it to help avoid the recurring deficit budget on a larger scale and to allocate more fund - not squeeze it - for infrastructural development activities, with a simultaneous drive being made for strengthening its capacity to improve the implementation performance relating to the Annual Development Programme (ADP). Public-private partnership (PPP) should also be actively promoted. Unfortunately, the government has not been able to make progress, in real terms, about exploiting the potential for PPP programmes. Meanwhile, the tax collection authorities will need to make sustained efforts on a vigorous scale to raise the level of domestic revenue collection. Corruption should be curbed effectively. All political leaders and lawmakers must rise above their individual selfishness and well-being as well as narrow partisan interests.

This article was published on The Financial Express, Views & Analysis, (Sunday, January 22, 2012)

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Border killings: When would it stop?

By Asif Reza Akash

Bangladesh and India share an international border of about 5000 kilometres. Five Indian states adjoin 28 Bangladesh districts on the border. India has already fenced in about 70 per cent of the border, secured by BGB Border Guard Bangladesh (BGB) and Border Security Force (BSF) of India, with barbed wire. The major peacetime duties of both forces include preventing the trans-border smuggling, especially narcotics, fake coins and currency, explosives, human trafficking, illegal cross-border movement of people and prevention of other crimes.

It is a matter of tension that the indiscriminate and extrajudicial killings have increased significantly in the border, mostly by the BSF men who killed 1000 Bangladeshi citizens over the past decade (Source: Human Rights Watch), that is, one killing every four days over the period. Have any punishments been given to the culprits involved in these killings? The BSF insists that there are internal investigations, and are unwilling to reveal anything. This apparent impunity encourages the BSF members to continue the killing spree. Human Rights Watch defined it as 'Trigger-Happy Culture' of BSF. 

"The border force seems to be out of control, with orders to shoot any suspect," said Meenakshi Ganguly, South Asia director of Human Rights Watch. The organisation found numerous cases of indiscriminate use of force, arbitrary detention, torture, and killings by the security force, without adequate investigation or punishment. The investigation and report of HRW is based on over 100 interviews with victims, witnesses, human rights defenders, journalists, law-enforcement officials, BSF and BGB members. In many of the cases investigated by the Human Rights Watch, the victims were cattle rustlers - farmers or labourers hoping to support their meagre livelihood as couriers in the lucrative, but illegal cattle trade which is rampant at the Paschimbanga border. Reportedly, the illegal trade between the two countries amount to 3/4th of regular trade. 

The Indian satellite channel NDTV recently telecast a video where several BSF jawans (personnel) were seen severely beating up a Bangladeshi youth after stripping him naked for failing of pay them a bribe of Indian rupee 1000 (US$23). When everyone is singing the song of humanity, how are we turning a blind eye to these killings? The Bangladesh government is obliged to protect the lives of its citizens, even those who may be involved in illegal trade. It should demand of the Indian government to stop these killings. Unfortunately, comments of Bangladesh ministers and leaders of the ruling party are sometimes confusing. In the last official visit, Indian premier Dr Manmohon Singh assured that border killings would cease but actually it is not true. When nine Indian fishermen were apprehended by Sri Lankan navy inside Lankan territorial waters, India did not take it so easily. 

The Indian premier asserted that they would not take any action which will cause any harm to Bangladesh, but they are building 'Tipaimukh Dam' which, many quarters fear, may become a death trap for the people living in the north-eastern part of Bangladesh. India is poised to enjoy transit facilities through Bangladesh, but in turn giving us virtually nothing. Even, they are not willing to give us our legitimate share of water of the trans-boundary rivers. As the upper riparian country, India always takes the absolute advantage of the international rivers, but when China does the same with India they raise a hue and cry. 

We urge all Bangladeshis, including expatriates, and to the world community to raise their voice against these extrajudicial killings in the India-Bangladesh border. 

This article was published on The Financial Express, Editorial, (Saturday, February 12, 2012)

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