BANGLADESH RURAL ELECTRIFICATION PROGRAM: A SUCCESS STORY OF POVERTY REDUCTION THROUGH ELECTRICITY

Abstract

The purpose of this paper is to present an analysis of the impact of electricity in poverty reduction in rural Bangladesh. This impact has been analyzed using comparisons between ‘with‘ and ‘without‘ electricity situations. Retrospective information has been collected to understand inter-temporal changes in asset situation of various economic categories. It has been argued that access to electricity (at household and outside household) reduces both economic poverty and human poverty (in education and health). In many ways, the poor electrified households were found to be better off than even the rich in the non-electrified villages. The spill-over effect of electricity on the non-electrified households of electrified villages is much pronounced. Electricity has a profound impact on human capital formation through knowledge building mediated through electricity-driven media exposure. It is recommended that in order to accelerate the process of economic development, strengthen pro-poor orientation in the growth process and to further human development in Bangladesh, access to electricity of the households and social and economic institutions should be expanded. Rural electrification should be viewed as one of the key strategies for national poverty reduction SUCCESS AND CHALLENGES OF BANGLADESH RURAL ELECTRIFICATION PROGRAM: A BRIEF SUMMARY In order to set the stage for an understanding of the Bangladesh Rural Electrification Program (REP) the largest agency in the power sector for the rural population (76% of 140 million people reside in rural areas) it would be worthwhile to provide a brief evolutionary description together with the successes and key challenges facing the program. In 1971 the year Bangladesh became independent only 250 villages out of 87,928 villages had access to electricity. The village electrification rate in an agro-based country was extremely slow, and the Power Development Board, by the mid ’~OS, found itself overburdened with an absolute monopoly. Against this backdrop, to accelerate the process of rural development and remove urban-rural disparity in standards of living, the Constitution (in 1972) declared rural electrification as one of the “hndamental principles of state policy” (Article 16), and subsequently, after an in-depth feasibility study, an Ordinance was promulgated to establish Rural Electrification Board in 1977. Based on the spirit of the Constitution and the Ordinance, the Polli Bidyut Samities (PBS; Rural Electricity Cooperatives, REC) were instituted. This practice is intended to provide a stable and reliable supply of power (electricity) in the rural areas at a reasonable price, and through that enhance the rural population’s standard of living both in terms of expansion of production-oriented (irrigated agriculture, industry, shopdmarket place) and human development activities (health, education, women’s empowerment etc). Over the last 20 years, the number of PBS established has increased over fivefold. From a low of only 250 villages in 1971, REP covered 39,684 villages by the