The 10th South Asian Economics Students Meet (SAESM)  was held in Lahore, Pakistan, bringing together 82 top economics undergraduate students from the region. The theme was the Political Economy of South Asia, with a winning paper selected for each of the six sub-themes. In this post, Thilani Navaratne presents her winning paper on the political economy of energy and natural resource use. Posts from the other winning authors have also been featured on this blog, and can be found at the end of this post.
In the past, Sri Lankan policy makers and politicians paid considerable attention to creating surplus energy capacity at the national level in order to support rapid development while at the same time, embarked on rural development as a prime political initiative where the rural electrification infrastructure formed a crucial component of the policy framework.
I conducted an analysis of the dynamics and the characteristics of the political economy of access to energy in rural electrification in Sri Lanka . The study focuses on how national policies shaped rural energy access and what influence rural politics and demand at the grassroots level have had on the energy infrastructure.
In addition to that the study explores the budgetary policies that had a direct bearing on national energy policies, and more specifically in creating rural energy infrastructure itself. While the provision of energy is the main component of rural energy access, the affordability of energy at rural level remains a key factor in the ultimate, tangible outcomes of energy usage. Clearly, rural economic development and enhancement of living standards are intrinsically linked with the degree of access to energy at affordable prices.
My paper finds that rural access to energy has come about both as a direct outcome of specific policies as well as a result of broader policies of rural development. Specific policies include the National Energy Policy which addresses the basic energy needs of the nation and sets out strategies to be followed to fulfil such needs. Much broader, macro level policies relating to Rural Development and energy accessibility are captured in the “Mahinda Chinthana”- The long term plan for the future of the nation, presented by the governing regime and in the Ministerial Policies.
The analysis uses national budget allocations, and district wise breakdown of energy accessibility as proxy indicators to ascertain the influence of various levels of political economy on rural energy accessibility. The main thrust exists from centre to periphery while instances of reverse influence, that is to say, influences from the grassroots level too have become significant factors in the final outcome. The reverse influences are fathomed by the political powers waged by local politicians and few other channels, most notably the influence of rural religious institutions.
The diagram depicts the political economic framework that affect the rural energy accessibility. It highlights the top bottom influences as well as the bottom up influence.
Policies and actions taken by the government to provide commercial sources of energy to the whole country have resulted in economic growth. At a grass root levels however there may be political influences that sometimes drive decisions.
My interviews with rural civilians and other officials in the energy sector showed that implementation of energy projects are highly dependent on the political agendas prevailing in those areas. It is a well known fact amongst the civilians that, if they live in an area that is governed by powerful and influential politicians then they may reap the benefits of the rural development projects. The Sri Lankan energy sector is dominated by few public institutions that are highly influenced by state policy and interests of the present governing regime.
Sri Lanka as a whole is on the right track in achieving rural development through rural electrification as one of the major energy sources. I recommend further investment in renewable energy sources, as well as a good governance framework. A framework which should give importance for the reporting side of every project.
Apart from that there should be integration of all rural development projects, thereby limiting duplication of tasks and reducing extra costs. Sometimes when there are too many projects that are conducted independently in one area there could be dilemmas as well as confusion.
For more information on SAESM, and the 10th Annual meet: Budding Young South Asian Economists Tackle Barriers to Cooperation 
Blog post: A Bird's Eye View Into the Mahatma Gandhi National Rural Employment Guarantee Act 
Photo: Nicholoya Estate Community Power House. K. Sinnasi. Simone D. McCourtie / World Bank