Businesses and the general public in Myanmar are divided on the recent bold policy move to hike electricity tariffs. But the big question is: how can the electricity reform contribute to the country’s development?
On one hand, the business community seems to be accepting of higher tariff rates as that could lead to a more stable power supply with less power outages. This in turn could bring down maintenance and other production costs with lower use of other costly sources of energy such as diesel-powered generators during power outages.
On the other hand, many households may find the tariff increases too steep given the country’s low per capita income. The higher power tariffs mean that consumers will not only have to pay more for their personal electricity consumption at home, but also for other goods and services that require electricity.
Since Myanmar embarked on economic reform and opening its market in 2012, it has witnessed rapid economic growth averaging almost 7 percent in the past seven years along with a sharp increase in electricity consumption. According to AMRO’s 2019 Annual Consultation Report on Myanmar, electricity use in the country increased by an average of 15pc annually from 2012 to 2018.
