Monday, March 27, 2017

Myanmar power problems need to be addressed

Myanmar is one of the world's fastest growing economies, with projected annual growth of 7.8% in gross domestic product for the financial year to March 31 2017, according to the World Bank. Only those who have not spent time with its overwhelmingly young and enthusiastic people -- or those unaware of the vast potential of this emerging market of about 54 million consumers -- should find this surprising. But it is nevertheless an achievement for a country that for decades struggled in the wake of the Asian tigers.

Even as the country gains momentum, however, many observers ask whether its success can be sustained. Various elements will combine to answer that question, although there is one crucial aspect that could make or break the country's rise. That is energy -- or rather, Myanmar's lack of electric power generation capacity.

Myanmar's often crippling power shortages is are starkly apparent to anyone living there. Almost 70% of its the population lacks access to grid electricity. Electricity use per capita is less than 10% of the amount consumed in neighboring Thailand. Even major cities that are connected to the grid suffer regular blackouts because supply struggles to meet even the relatively low levels of demand.

Over time this problem will get solved. Again these problems are opportunities to be solved by profit making ventures. However, with only 30% of the population having access to the grid there will be need for a tremendous amount of investment in the power generation and delivery sector.

The economy is growing at 8% per year and would probably be in the double digits if not for the lack of reliable electric power.

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