My interview with the Energy & Power: Delayed Decision Stimulates Energy Sector Corruption

My interview with Mollah Amzad Hossain, Editor of the Energy & Power magazine, vol. 7, issue 9, Nov. 2, 2009 (http://www.ep-bd.com/news.php?id=373) can be read below:

Too many things are seemingly wrong with Bangladesh’s energy sector. Bangladesh lacks the right people in right place to making the right decision at the right time. It has failed not only to attract its skilled expatriates to return and take the mantle of leadership but also to retain its talented workforce. Outside the mediocrity in the technical and administrative leadership and lack of human resources and infrastructure, corruption is another dynamics that has a caustic and crippling effect on anything that it comes across, thereby adversely hindering the development initiative and smooth functioning of the energy sector. Many investors are compelled to bribe so that they can soften the attitude of bureaucrats and expedite matters in their favor. In that process often times it is the undeserving vendor that is chosen over more qualified ones. So, unless corruption is dealt severely and weeded out, it will continue to create a vicious cycle that breeds corruption and in the process gets sustained from players both within and outside the government.



This is how Dr. Habib Siddiqui, Non-resident Bangladeshi Energy Expert, a 1977 graduate in Chemical Engineering from BUET sketches the horizon in Bangladesh’s energy sector. Dr. Siddiqui has graduate degrees in both chemical and nuclear engineering from some of the leading research and engineering universities in North America. He earned his PhD in chemical engineering from the prestigious University of Southern California, Los Angeles, doing research in the area of enhanced oil recovery from disordered porous media. His web of technical interest also includes nuclear energy. He is a certified Master Black Belt in Six Sigma who has led deployment initiative within three major U.S. corporations (including Merck & Co., where he was a Director lately). He has authored more than 400 articles on a plethora of subjects from scientific and technical to international politics and human rights.



During his brief visit to Bangladesh, Siddiqui (HS) spoke to Energy & Power (EP) Editor Mollah Amzad Hossain. The following is the excerpt of his interview.



EP: How do you evaluate the crisis of energy in Bangladesh?



HS: Like many other 3rd world countries an efficient private sector has not flourished in Bangladesh. Massive government initiative was essential for the development of energy infrastructure, which could not be done for various reasons and that has kept us far behind many other countries today. What upsets me deeply is when I compare our particular case with that of our neighbour -- Myanmar, a country that is ruled by a ruthless military oligarchy for nearly half a century with the worst record in human rights. They are quite aggressive in their bid to explore petroleum resources in offshore. Side by side, they are active in establishing their right on the maritime boundary by submitting claim with the UNO.



And look at us. We have a longer history of democracy in Bangladesh. We have a more educated and talented technical workforce. Sadly, our government in the last four decades has done a lousy job to establish our rights on the maritime boundary and exploring natural resources. It is slow and shortsighted. We react rather than act. We are therefore always a few steps behind our more aggressive neighbours - India and Myanmar. Bangladesh would have been well positioned to avoiding the mess we find ourselves today, if we were thinking and taking the right initiative for offshore exploration for petroleum resources years ago. The lack of government initiative on our natural resources has been a terrible mistake, slowing our progress.



EP: After the independence, the Bangabandhu Government was the first among the South Asian countries to start offshore exploration for petroleum. What are the reasons for government’s inactions and why we lagged behind compared to our neighbours?



HS: Let’s take Petrobangla. I don’t think its works are transparent. Both Petrobangla and PETRONUS were born almost at the same time. Today you can see where they stand and their positions. The public perception is that Petrobangla has neither the capability nor the courage to take independent decision that is based on sound technical expertise; it is run by political whims. As a result, we the public are skeptical of its role in protecting our national interest. The failure to confront Magurchara and Tengratila blow-outs showcased Petrobangla’s inexcusable inability to deal with those kinds of critical issues of our national interest. The government has failed to ensure efficiency and effectiveness of state-owned enterprises. It has also failed to provide incentives that are necessary for the growth of the private sectors.



Now as to your question on why the government has failed, there are many reasons I can cite. However, for our purpose here, I shall try to limit these to a few.



You need a representative government that caters and cares for public interest. It must understand the trust it carries and carry out the task diligently, honestly and transparently. Do we have that kind of government? The unfortunate political changes of 1975 triggered a domino effect that affected negatively each and every sector in our country. Energy sector has also suffered the burnt since then. After taking power, General Ziaur Rahman initiated the process of implanting military bureaucrats in many government-run institutions, including the energy sector companies, a process that was to continue until the end of the Ershad dictatorship. Instead of the people’s representatives, making the energy policy and ensuring that our people gets the best from any deal the bureaucrats in the military and civil administration took total control of the energy sector. With lack of accountability to people, they became corrupt and self-serving. Gradually, corruption got institutionalized over the next 17 years. Consequently, petty personal interests were served and development visions of these institutions were stalled by ignoring technical considerations.



The meritorious and competent professionals found no alternatives but to leave the country. The brain-drain of competent professionals from energy sector was simply alarming, and yet the successive governments didn’t take any initiative to stop this phenomenon. In the last 18 years, the elected governments have spoken about the talented non-resident Bangladeshis, or more correctly, the expatriates, and how they could have enabled technology transfer. But all such were empty talks. I still have not seen any concrete proof of engaging our expatriate experts into reviving the energy sector.



I remember when I was a BUET sophomore or junior discussing about the exploration of coal from northern Bangladesh and utilizing it for power generation in a class project discussion that was initiated by Dr Iqbal Mahmud. And look at it some 30 plus years later, we are nowhere close to mining that coal reserve! That coal remains underground while we complain about lack of power generation!



EP: Who are responsible for that?



HS: Obviously the political leadership. I hold it accountable for our failure in energy security. After Bangabandhu’s death, in all these years of Bangladesh, I have failed to find a single leader who really cared about Bangladesh and its ordinary people – the Salimuddin and Kalimuddins within our society. Every politician today, with rare exceptions, seems to care more about his or her greed. Politics is a vehicle for personal enrichment and victimization of others. These are by all means sure recipes for disaster and not nation-building.



We need a people’s government that truly cares, thinks rationally and is willing to formulate a policy that is built on hard facts and consensus-driven, and is aggressive enough to execute it once a decision is taken. Our past governments have miserably failed to provide proper policy and guidance for the energy sector. This has caused enormous harm to our economy, leaving us behind and almost unprepared to deal with alarming gaping energy shortage.



The bottom line is we need a patriotic political leadership that can initiate a fresh revival. We need right people in the right place making right decisions at the right time. Initiatives must be taken to develop governance, transparency and efficiency with everything we do. We need a healthy working environment that is built on meritocracy, and not sycophancy. We must retain the best of our talented workforce through a reward and recognition system, and enable a process that helps our technical folks to exchange and learn from their more talented and skilled expatriates. We must take lessons from other countries and provide appropriate pay packages to qualified professionals. If we fail in this talent management program, it won’t be too long that Bangladesh would be bereft of its best brains. Already, an alarming 80 to 90% of the best engineers have chosen to leave Bangladesh for bettering their livelihoods.



EP: Does that mean that energy sector development should remain stalled till Bangladesh’s energy sector enterprises and manpower acquires efficiency?



HS: No, I did not mean that. If we could afford to be self-reliant, capable and effective ourselves of doing the right thing, definitely it would have been better for us. But we are nowhere close to that ideal situation.



The globalization factor has completely changed our old thinking. We are forced to find the best alternative fast under the situation we are in. Even a communist country like China has opened all its sectors including energy to foreign investment – and mind that, to capitalist countries – its once-mortal foes. In terms of technology transfer in the energy sector that we are talking about, e.g., oil and coal exploration, Bangladesh is in its infantile stage. It needs someone to grab its tender arm and show it how to walk. That will be a much prudent way than being stupidly self-reliant while we don’t know the basics. Government can play a big role in encouraging both local and foreign investment to vitalize our energy sector.



EP: A section of civil society under the banner of Oil, Gas & Port Protection Committee (OGPC) is opposing open pit coal mining and leasing of offshore blocks to IOCs for exploration. How do you evaluate that?



HS: There are environmentalist groups in many countries, including the USA. They are quite active and protest on matters that seem harmful to them in a peaceful manner and the governments are not too offended by their activism. In these days of the Internet, many of these groups also have a very active petition campaign where individual supporters are asked to write to their elected representatives to oppose something that is controversial. You won’t see there the kind of vandalism that takes place in Bangladesh.



I strongly disagree with what the agitators are doing in Bangladesh. I believe this group is acting against national interest with funding from foreign sources. Our ordinary people, the vast majority, are not behind them. I observe with utter surprise when some University teachers get involved with them. They are not only hindering the development of the energy sector but also causing an image crisis for the country. We must note it. Whose purposes are being served by these agitators who oppose the coal mining and offshore oil and gas exploration? It is really saddening to see that we are not mining our high quality, less environment-polluting coal while we allow poor quality Indian coal polluting our environment. This attitude is simply unbelievable! I suspect that these agitators are basically serving the causes and interests of India, and not of Bangladesh.



EP: Agitators are opposing coal mining and offshore PSC. They are propagating that coal should only be mined after ensuring domestic need. What is your evaluation?



HS: If we like to discuss the PSC agreements, we can do that. Any agreement may have merits and demerits. If any clause of any agreement is found to be compromising national interest after signing of agreement, these can be mitigated always through negotiations. The modern commercial world does not favour arbitrary termination or scrapping of signed agreement. All agreements have inbuilt mechanism how these will be operated. Controversies of any signed agreement have to be resolved through negotiation. Government has to take initiative for that.



On the other hand regarding exploration of natural resources in the offshore, I am being reminded of a story in the Holy Quran. The Prophet Moses (Musa (AS)) had a wonderful encounter with Khidir (AS). The story is mentioned in the Surah al-Kahf. Khidir allowed Musa to accompany him on the condition that he must not ask any question as long he is with him. They went to a town where people did not give them food to eat or water to drink. But on the way, Khidir saw a wall that was on the verge of collapse and he fixed it. This behavior puzzled Musa (AS) who could not keep quite. He asked Khidir why he had fixed the wall. Khidir explained that the property where the wall stood belonged to some orphans whose God-fearing parents had hidden some treasure underneath that wall hoping that when their kids would grow up they would find the hidden treasure. It was God’s wish that such a treasure be not made visible to others before they come of age. So, fearing that collapsing wall might bare the hidden treasure, Khidir fixed the wall.



There is a big lesson in this story of the Qur’an. In contrast to the hidden treasure, the maritime resources of the Bay of Bengal, which is our share, now remains exposed and is getting stolen unless we try to grab which is ours before everything is lost. However, we are not mature enough to do this task ourselves. We need partners that can help us protect our rights. If we wait too long till we acquire capacity to explore and exploit nothing will be left for us. In this context, I am in favour of the initiative for PSC that has been taken to explore it now. We have already made much delay. We must not waste any more time. For exploring other blocks, the government must take appropriate initiative to resolve maritime boundary disputes.



EP: What government should do to encourage investment in energy sector?



HS: Not too long I have written on government measures needed to encourage foreign investment. There has to be transparency and simplifying of the government procedures for investment. It is too bureaucratic today with lots of steps, and sign-offs, which require, unfortunately, bribes to move from one area to the next. The system needs to be simple and investment-friendly so that every investor sees it to be fair and not bogged into corruption.



The government must first correctly assess how much investment is required for energy sector. Government should also decide how much it can invest from its own sources. As to the rest, it must have a clear vision on how much investment it may need from different sources.



As I hinted above, our government must realize that the bureaucracy is the main deterrent force toward attracting FDI. And for transparency in concluding agreements, we must take lessons from other countries. The policymakers must realize that dilly-dally attitude in decision making encourages corruption. Corruption must be weeded out to help investment.

Comments

Popular posts from this blog

Defining the Biden Doctrine

George Soros at the Davos Forum