By Walden Bello
(This article is based on the author’s talk at the Teach-in on “Technology and Globalization” sponsored by the International Forum on Globalization on Feb. 24-25, 2001, in New York City.)

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

Yet the state ownership versus privatization 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 (Egat) 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: centralized electrification.

Centralized technologies are inextricably linked with the politics of domination of our countries by central elites– by technocrats, urban elites, and local and foreign big business. Behind the crisis of these technologies is the unraveling of a longtime developmentalist 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 particular, 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 Soviet Marxists who equated electric power with the desirable society. Jawaharlal Nehru, the dominant figure in post-World War II India, called dams the “temples of modern India,” a statement that, as Indian author Arundhati Roy points out, has made its way into primary school textbooks in every Indian language. Big dams have become an article of faith inextricably linked with nationalism. To question their utility amounts almost to sedition.”

Centralized Electrification

The technological blueprint for power development for the post-World War II 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 electricity 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. Centralized electrification with its big dams, big plants, big nukes became the rage. Indeed, there was an almost religious fervor about this vision among technocrats who defined their life’s work as “missionary electrification” or the connection of the most distant 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 US Agency for International Development. Not surprisingly, this generosity was not 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, Roy observes in her brilliant essay, “The Cost of Living,” not only built “new dams and irrigation schemes…[but also] took control of 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 centralized electrification preempted the development of alternative power systems that could have been more decentralized, more people-oriented, more environmentally benign, and less capital intensive.

Centralized 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 Asian Development Bank (ADB) became the biggest funders of centralized power technologies for export to Third World countries while, as noted earlier, USAID supported rural electrification. Centralized power development 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 subsidized by government export agencies, like the US 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,” centralized 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 subsidize the growth urban-based industry. Industry was the future. Industry was what really added value. Industry was synonymous with national power. Agriculture was the past.

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

Costs…

While these interests benefited, others paid the costs. Specifically, it was the rural areas and the environment that absorbed the costs of centralized electrification. Tremendous crimes have been committed in the name of power generation and irrigation, says 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 1950’s. Very few have been paid compensation. Communities relocated, 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. Like 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 were submerged, rivers changed their courses, fishing as a livelihood atrophied among riverine communities, and many species of fish simply 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 in the plains has potable water.”

Meager Harvest

Yet what benefits have 50 years or so of centralized 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.

– In India, 22 per cent of 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.

Beneficiaries

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

– First of all, centralized electrification was geared to deliver a vision of modernity to satisfy the ambitions of technocrats and authoritarian elites like 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 taxpayers-subsidized profits for multinational and local dam contractors and the builders of power plants like the ubiquitous Bechtel.

– Centralized electrification sought provides a rationale for the maintenance and expansion of giant multilateral bureaucracies like the Asian Development Bank and the World Bank.

– Centralized electrification did not aim to provide a program of coherent, balanced development but to trigger a process of destabilizing, lopsided, urban-oriented hyperdevelopment which would leave most of the countryside behind as national resources were focused on building a manufacturing and industrial sector in the manner of the West.

The New Panacea

Today, these systems of centralized electrification run by governments have become terribly expensive to maintain. Now the IMF, World Bank, and Asian Development Bank want governments to privatize and deregulate these systems. While governments had to keep electricity prices controlled to justify the existence of expensive generation, transmission, and distribution facilities, the private sector will be expected to raise prices and streamline services–meaning, it will simply eliminate from the rolls of consumers those who cannot pay. After having been taken for a ride by the ideology of centralized electrification, people will now be taken on another, equally dangerous spin by the ideology of privatization–by propaganda about the greater efficiency of the private delivery of essential services.

Footing the Bill

Not surprisingly, it is the consumers–rural and urban–who will foot the costs of the transition, for the private sector corporations–many of them transnational firms like Enron or KEPCO–will not be pushed to absorb the full costs of these capital-intensive systems purchased with massive loans by governments. In the Philippines, consumers will subsidize 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 centralized 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 philosophy of free enterprise. No, the model for us in the Third World is the system of power deregulation that California initiated in the early 1990’s. For we are now told by technocrats and big business that the “economies of scale” dictate that the power facilities should go to a few, so-called efficient generators of energy. Thus, the dream of big centralized power that so many of our technocrats associated with national power has turned out to be a bad dream. It has turned out to be simply a phase 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 disaster than the crisis of state-run centralized power systems.

People are, however, underestimated. For throughout the Third World at this point, in places like Narmada in India, in Pak Mun in Thailand, people are actively engaged in struggles against the implementation of centralized 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 centralized electrification to the reality that this obsolete and flawed paradigm of 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, like the 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 centralized technologies that simply promote domination, dependence, and dissolution.