The power crisis and a paradigm crisis

Print edition : March 17, 2001

After having been taken for a ride by the ideology of centralised electrification, people are now being taken on another, equally dangerous spin by the ideology of privatisation.

IN many developing nations today, state-owned centralised power systems are mired in mismanagement, corruption and debt. And in country after country, influential multilateral agencies such as the Asian Development Bank (ADB) and the World Bank have come up with a cure-all: privatisation and deregulation. This is the case in India, Thailand, and the Philippines.

Yet the state ownership versus privatisation debate obscures the complexities of the crisis of power generation and delivery in the Third World. For what is behind the troubles of giant agencies such as the Electricity Generating Authority of Thailand (E gat) and the National Power Corporation (Napocor) in the Philippines is not the natural inefficiency of state-managed enterprises but the crisis of the paradigm that underpins them: centralised electrification.

Centralised technologies are inextricably linked with the politics of domination of countries by central elites - by technocrats, urban elites and local and foreign big business. Behind the crisis of these technologies is the unravelling of a longtime de velopmentalist alliance among technocrats, multilateral agencies and private corporations dedicated to foisting devastating technologies on developing nations in the name of a vision of modernity and the search for profitability. The power industry, in p articular, illustrates this destructive symbiosis of modernity and profitability.

One of the earliest expressions of the sense that generation and distribution of power was a central test of modernity was made by Lenin in 1921, when he defined socialism as Soviet Power plus Electricity. But it was not only Leninists who equated electr ic power with the desirable society. Jawaharlal Nehru, the dominant figure in post-Second World War India, called dams the temples of modern India, a statement that, as author Arundhati Roy points out, has made its way into primary school textbooks in ev ery Indian language. Big dams have become an article of faith inextricably linked with nationalism. To question their utility amounts almost to sedition.

THE technological blueprint for power development for the post-Second World War period was that of creating a limited number of power generators - giant dams, coal or oil-powered plants, or nuclear plants - at strategic points which would generate electr icity that would be distributed to every nook and cranny of the country. Traditional or local sources of power that allowed some degree of self-sufficiency were considered backward. If you were not hooked up to a central grid, you were backward. Centrali sed electrification with its big dams, big plants and big nukes became the rage. Indeed, there was an almost religious fervour about this vision among technocrats who defined their life's work as missionary electrification or the connection of the most d istant village to the central grid.

It was, it must be noted, a grand mission that was supported in India, Thailand, South Vietnam and the Philippines by millions of dollars worth of grants from the U.S. Agency for International Development (USAID). Not surprisingly, this generosity was no t unconnected to the less than salutary mission of pacifying rural areas permeable to communist agitation.

In any event, in the name of missionary electrification, India's technocrats, Arundati Roy observes in her brilliant essay, 'The Cost of Living' (Frontline, February 18, 2000), not only built new dams and irrigation schemes but also took control o f small, traditional water-harvesting systems that had been managed for thousands of years and allowed them to atrophy. Here Roy expresses an essential truth: that centralised electrification preempted the development of alternative power systems that co uld have been more decentralised, more people-oriented, more environmentally benign, and less capital intensive.

Centralised electrification, like every ideology, served certain interests, and these were definitely not those of the ordinary masses. The key interest groups were:

* key bilateral and multilateral development agencies. In Asia, the World Bank and the ADB became the biggest funders of centralised power technologies for export to Third World countries while USAID supported rural electrification. Centralised power dev elopment provided a grand rationale for the existence and expansion of these institutions into giant bureaucracies;

* big multinational contractors like Bechtel or Enron, which made tremendous profits building dams or providing power consulting services;

* exporters of power plants, including nuclear plants, like General Electric and Westinghouse, whose costs were subsidised by government export agencies like the U.S. Eximbank, with the taxes of citizens in the developed countries;

* powerful local coalitions of power technocrats, big business and urban-industrial elites. Despite the rhetoric about rural electrification, centralised electrification was essentially biased toward the city and industry. Essentially, especially in the case of dams, it involved expending the natural capital of the countryside and the forests to subsidise the growth urban-based industry. Industry was the future. Industry was what really added value. Industry was synonymous with national power. Agricultu re was the past.

Aside from being an element in counterinsurgency programmes, rural electrification was simply a small concession to the countryside to pacify opposition to city-oriented centralised electrification. Large multipurpose dams that allegedly provided countri es simultaneously with the benefits of power and irrigation were concerned first and foremost with power for the urban sector.

While these interests benefited, others paid the costs. Specifically, it was the rural areas and the environment that absorbed the costs of centralised electrification. Tremendous crimes have been committed in the name of power generation and irrigation, says Arundhati Roy, but these were hidden because governments never recorded these costs.

In Thailand, for instance, the government has no records on how many communities and rural peoples have been displaced by the score of massive hydroelectric and irrigation dams built since the 1950s. Very few have been paid compensation. Communities relo cated, vanished, or were simply absorbed into urban slums. In India, Roy calculates that large dams have displaced about 33 million people in the last 50 years, about 60 per cent of them being either untouchables or indigenous peoples. As in the case of Thailand, India, in fact, does not have a national resettlement policy for those displaced by dams. Neither does the Philippines.

The costs to the environment have been tremendous: in Thailand, hundreds of thousands of hectares of primal forest land was submerged, rivers changed course, fishing as a livelihood atrophied among riverine communities, and many species of fish vanished. In India, Roy points out, the evidence against Big Dams is mounting alarmingly - irrigation disasters, dam-induced floods, the fact that there are more drought prone and flood prone areas today than there were in 1947. The fact that not a single river i n the plains has potable water.

YET what benefits have 50 years or so of centralised electrification really brought?

After imposing such high human and ecological costs, the amount of power generated by the controversial Pak Mun Dam in northeastern Thailand can barely supply the daily electricity needs of a handful of shopping malls in Bangkok. And in India, 22 per cen t of the power generated is lost in transmission and system inefficiencies. The proportion for the Philippines is at least 25 per cent, which is probably the standard for developing countries. In the Philippines, after 50 years of massive electrification , over 30 per cent of rural households have no access to electricity. In India, some 70 per cent have no access to electricity.

Yet, this is not surprising, since centralised electrification was never really meant principally to deliver affordable power to people in an effective way. What it really meant to deliver was different:

* First of all, centralised electrification was geared to deliver a vision of modernity to satisfy the ambitions of technocrats and authoritarian elite leaders like Ferdinand Marcos of the Philippines, who identified his power with the power that was to be delivered by the Bataan Nuclear Power Plant.

* It sought to deliver taxpayer-subsidised profits for multinational and local dam contractors and the builders of power plants like the ubiquitous Bechtel.

* Centralised electrification sought provided a rationale for the maintenance and expansion of giant multilateral bureaucracies like the ADB and the World Bank.

* Centralised electrification did not aim to provide a programme of coherent, balanced development but triggered a process of destabilising, lopsided, urban-oriented hyperdevelopment which would leave most of the countryside behind as national resources were focussed on building a manufacturing and industrial sector in the manner of the West.

TODAY, these systems of centralised electrification run by governments have become terribly expensive to maintain. Now the International Monetary Fund, the World Bank and the ADB want governments to privatise and deregulate these systems. While governmen ts had to keep electricity prices controlled in order to justify the existence of expensive generation, transmission and distribution facilities, the private sector will be expected to raise prices and streamline services - meaning that it will simply el iminate from the rolls of consumers those who cannot pay. After having been taken for a ride by the ideology of centralised electrification, people will now be taken on another, equally dangerous spin by the ideology of privatisation - by propaganda abou t the greater efficiency of the private delivery of essential services.

Not surprisingly, it is the consumer, both rural and urban, who will foot the costs of the transition, for the private sector corporations - many of them transnational firms such as Enron and KEPCO - will not be pushed to absorb the full costs of these c apital-intensive systems purchased with massive loans by governments. In the Philippines, consumers will subsidise the sale of the National Power Corporation to the private sector by paying a tax designed to collect $10 billion in stranded costs.

In country after country today, the physical assets of centralised systems are being divided up among private firms. But this is not among many small and medium firms, which would at least be consistent with the philosophy of free enterprise espoused by the proponents of deregulation. No, the model for the Third World is the system of power deregulation that California initiated in the early 1990s. For we are now told by technocrats and big business that the economies of scale dictate that the power fac ilities should go to a few, so-called efficient generators of energy. Thus, the dream of big centralised power that so many of our technocrats associated with national power has had, has turned out to be a bad dream. It has turned out to be simply a phas e in the delivery of electric power to the hands of private monopolies, many of them foreign transnationals. And with the botched California deregulation as a model, it need hardly be stated that we are likely to be headed for a much bigger economic disa ster than the crisis of state-run centralised power systems.

People are, however, underestimated. For throughout the Third World at this point, in places like the Narmada valley in India, in Pak Mun in Thailand, people are actively engaged in struggles against the implementation of centralised technologies bent on delivering the illusion but not the reality of national progress. These struggles in the distant countryside are beginning to wake up the supposed urban beneficiaries of centralised electrification to the reality that this obsolete and flawed paradigm o f national advance is actually turning out to be phase in the delivery of horribly expensive national assets, at their expense, to the hands of private monopolies, such as the giant power distributor Meralco in the Philippines, a corporation that is the quintessential representative of the incestuous union of electricity, monopoly and super-profitability.

People, in short, are increasingly aware that the struggle for community, for independence, for the future, is now inextricably linked to the struggle against bad centralised technologies that simply promote domination, dependence, and dissolution.

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