Md. Monirul Islam :
From agriculture to industry, energy is considered an important factor for production. Being a home of 165 million people, Bangladesh initially started a green revolution, and then followed the way of industrialization to provide decent living to its citizens. This transformation necessarily calls for mechanization of its production methods, which have resulted in increased demand for energy. Consequently, the production processes have become progressively energy dependent due to growing economy and its changing socioeconomic structure.
For mitigating explosive energy demands, the policymakers of Bangladesh took many significant policies. More importantly, the Rural Electrification Board announced to bring further 2.70 million households under the network of powersupply by 2021. Despite significant plan and programmes concerning the energy sector, Bangladesh is still considered one of the lowest per capita energy consuming countries compared to the economies with similar per capita GDP growth in Asia.
Apart from other sources of energy, electricity has been the highest priority sector in terms of the necessity of people at the household level. Besides, the rapid growth of urbanisation has resulted in an increasing demand for gas connections for commercial uses. However, due to inadequate supply, in most cases, a new connection of the gas line is inoperative that hampers the overall development of the country. Even, the state-owned electricity utilities have also been suffering from energy deficiency. Moreover, policymakers hardly show magnetized policy measures to encourage private enterprises in the power sector because of their poor pricing policies and other tailbacks. Therefore, this state of investment crisis contributes to the shortage of energy in the country. The rapid growth of urbanisation influenced by steady economic growth in Bangladesh has generated substantial demands for energy.
Energy is not only a factor of production; it is viewed as an important commodity, which shapes the global economic and political orders. Globalization is generally seen as an augmented global economic integration, global nature of governance, globally interrelated and interdependent socioeconomic development. These integrated phenomena of globalization make the lives of world people comfortable through increasing consumption, promoting technological diffusion, ensuring different socioeconomic and political adaptations and development. Moreover, among other factors, globalization significantly affects the fluctuation in energy consumption. The globalization and trade liberalization by removing trade barrier have facilitated the flows of output and income among the world community that is considered the significant pushing factor to consume more energy. Thus, promotion of globalization is associated with the more use of energy.
The higher energy consumption contributes to a greater scale of richness of the world community that enables them to access a high standard of living in stimulating economic growth. Therefore, the energy consumption-economic growth nexus has achieved a remarkable concentration for decades in which globalization critically strengthens this nexus. As globalization is a long run exogenous dynamic to harness both energy consumption and economic growth, the process does not work without the stable human rights situation in a country. If human rights are violated due to the presence of political instability, the energy consumption-economic growth nexus does not work properly. In fact, the political risk factor i.e. political terror scale (PTS) contributes to negative externality especially making globalization dysfunctional. The PTS quantifies the violations of human rights carried out by a state, its organs and other internal and external forces. The various human rights violations may include abuses such as extrajudicial killing, torture, disappearances, political imprisonment, terrorism, hartal, road shutdown, torching vehicles and so on. In this regard, it is envisaged that political risk factor may have significant influence on the overall development of a developing economy like Bangladesh. Besides, political instability caused by the terrorist activities may even harm the energy infrastructures and supplies, which, in turn, constrains economic growth. This implies that globalization and political risk issue as the exogenous and endogenous indicators respectively affect the energy consumption-economic growth nexus in a developing economy like Bangladesh.
As the economic growth of Bangladesh is stimulated by energy consumption and vice versa, the policymakers and government should enhance the availability of energy in the country and continue the existing momentum of economic growth. These will invariably spur the economic growth of Bangladesh’s economy. Besides, the government should deal with the dimensions of globalization (economic, political, and social) prudently so that these dimensions could help enhance the capacity of both people and industries to consume and utilize energy for economic development. The political risk issues should be taken care of by applying good governance mechanisms even though there is no negative effect of PTS on the relationship between energy consumption and economic growth in the long run. These measures will strengthen the energy consumption-economic growth nexus in Bangladesh’s economy.
(Monirul Islam is Asst.
Professor, BIGM).
