Charles Ebinger is the Director of the Energy Security Initiative and a Senior Fellow at Brookings Institution, a think tank based in Washington D.C. He specializes in international and domestic[…]
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“In the final analysis, governments generally don’t embark on policies that may well mean their political demise sooner rather than later.”
Question: Of all the governments you’ve advised on energy rnpolicy, which have been the most and least reasonable?
rn
rnCharles Ebinger: Oh, I'd like to tell you that I could claim rnsuccess on more than one hand out of 50 governments. I would say in the rnlong run we probably made some great success in Jordan and Egypt and rnironically, even in Pakistan in the energy sector. Things have fallen rnapart since then. The problem though I think is most interesting to rnsay, well why don't governments listen to what even most officials wouldrn say was fundamentally sound advice. The problem is in many of these rncountries you know, because of the large volumes of poor people energy rnprices are highly subsidized, in some cases free. And still in large rnparts of India, the farmers pay nothing for electricity. And so of rncourse because there's no value on the good, demand shoots through the rnroof and then the Indian government can't build enough generation rncapacity so it becomes a self-fulfilling prophecy.
But it's rnreally the political constraints these countries are under, are very, rnvery serious. And it's easy for the IMF or the World Bank to come in rnand say "Oh, you need to rationalize prices and you know get them up to rnthe real cost," but you know we don't, as we were talking earlier, we rndon't have our prices reflecting the cost of carbon. And so in some rnways, we're not that different. So I think that's the biggest thing. rnThey don't see any near-term benefit by making some of these tough rnreforms even though they recognize that they're on a collision course ifrn they don't do these things. So they do them at the margin, try to keeprn the system intact.
rnBut sadly in a place like Pakistan today, you know most of the major rncities have electricity shortages 16, 18 hours a day. And that's true rnin many large cities in India or around the world. In the big cities rnelectricity is you know often only available 3 or 4 hours a day, if at rnall. And of course as we mentioned at the start of our talk, there's rnstill huge numbers of people that have no access to electricity at all. rn So these are the real dilemmas, so it's easy to talk about rnWestern-style reforms, creating regulatory regimes for transparency and rnall this, but in the final analysis, governments generally don't embark rnon policies that may well mean their political demise sooner rather thanrn later.
rn
rnRecorded on April 28th, 2010
rnInterviewed by Austin Allen
rn
rnCharles Ebinger: Oh, I'd like to tell you that I could claim rnsuccess on more than one hand out of 50 governments. I would say in the rnlong run we probably made some great success in Jordan and Egypt and rnironically, even in Pakistan in the energy sector. Things have fallen rnapart since then. The problem though I think is most interesting to rnsay, well why don't governments listen to what even most officials wouldrn say was fundamentally sound advice. The problem is in many of these rncountries you know, because of the large volumes of poor people energy rnprices are highly subsidized, in some cases free. And still in large rnparts of India, the farmers pay nothing for electricity. And so of rncourse because there's no value on the good, demand shoots through the rnroof and then the Indian government can't build enough generation rncapacity so it becomes a self-fulfilling prophecy.
But it's rnreally the political constraints these countries are under, are very, rnvery serious. And it's easy for the IMF or the World Bank to come in rnand say "Oh, you need to rationalize prices and you know get them up to rnthe real cost," but you know we don't, as we were talking earlier, we rndon't have our prices reflecting the cost of carbon. And so in some rnways, we're not that different. So I think that's the biggest thing. rnThey don't see any near-term benefit by making some of these tough rnreforms even though they recognize that they're on a collision course ifrn they don't do these things. So they do them at the margin, try to keeprn the system intact.
rnBut sadly in a place like Pakistan today, you know most of the major rncities have electricity shortages 16, 18 hours a day. And that's true rnin many large cities in India or around the world. In the big cities rnelectricity is you know often only available 3 or 4 hours a day, if at rnall. And of course as we mentioned at the start of our talk, there's rnstill huge numbers of people that have no access to electricity at all. rn So these are the real dilemmas, so it's easy to talk about rnWestern-style reforms, creating regulatory regimes for transparency and rnall this, but in the final analysis, governments generally don't embark rnon policies that may well mean their political demise sooner rather thanrn later.
rn
rnRecorded on April 28th, 2010
rnInterviewed by Austin Allen
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