The Energy Crisis: A Reality Check

More direly than increasing the price of living for the layman, mounting electricity bills will have crippling effects on the fragile state of Myanmar's economy. Although these consequences may not be immediately apparent, their long-term repercussions are grim. For a nation still embroiled in a state of renovation and economic development, raising the price of energy will be as constructive asbreaking the legs of a foalbeing groomed for the Preakness.

In the past, the government justified inflating energy tariffs by citing high operating costs and increased expenditures on transmission and distribution. It pointed its finger at countries like the United States, Great Britain, Australia, and Singapore, noting how much those well-developed nations charged their citizens for power. It publicly mourned the losses incurred by a state-run electricity enterprise.

Hikes in energy costs will remedy immediate monetary deficits, but let's think long term. What will the lasting consequences of expensive energy be? Productivity of domestic businesses will undoubtedly be crippled; some companies will be dealt a fatal blow. Expansion plans being nursed by domestic SMEs (small and medium enterprises) will grind to a halt. Foreign investors will question the value of their ventures in Myanmar, anxious whether extreme operating costs will be worth the return.

Is endangering Myanmar's bright future really worth a few extra kyats a month to the government?  

It is time for the government's rationale to mature. It is time for it to think broadly about the consequences of its actions instead of simply choosing the quick and easy solution. It cannot offer hollow excuses for its actions anymore.

There exist several healthy alternatives to drastic price inflation. The government could subsidize energy expenditures until cheaper, more efficient production alternatives arise. The Ministry of Energy could be allocated a higher budget. The elaborate lifestyles of the country's MPs could be tempered to further cut costs.

Whether or not the government will ever consider these options is anyone's guess.

Fortunately, there are several lifelines being extended to Myanmar that will hopefully quell the impending energy crisis. Several large international financial institutions, such as Asian Development Bank, along with the nation of South Korea are set to provide Myanmar with significant loans to improveits energy infrastructure. Smart, systemic, and efficient investments of these loans have the potential to negate the damage looming in the wake of the tariff increase. If they are gambled, wasted, or not applied accordingly, however, then the economy, the States, and Myanmar as a whole will begin to crumble, and the government will have to rewrite what it has hand written with the soles of its feet.

Source: http://www.news.myanmaronlinecentre.com/2013/11/08/the-energy-crisis-a-reality-check/