“Star Spangled Scapegoat”

I just read a great op-ed by Tim Padgett called “Without The U.S. To Scapegoat, Latin America Discovers Its Inner Godzillas.” Padgett argues that President Maduro is running out of scapegoats to blame for the debacle that is currently the Venezuelan economy:

“When a U.S. president is eating ropa vieja in Havana and dancing tango in Buenos Aires, Latin American leaders can’t seem to find their handy Star-Spangled Scapegoat anywhere in their desk drawers. Instead, from the Río Grande to the Río de la Plata, Washington’s new and less imperialista engagement with Latin America has helped expose the region’s inner Godzillas.”

As for the region’s “inner Godzillas,” Padgett is referring to a recent meme about Venezuela’s electricity crisis.  Here is his description:

“A new Internet meme offers him a culprit: Godzilla! It shows the slimy monster destroying Venezuela’s power lines under a caption that reads: “Government Finds Out Who’s to Blame For Power Outages.” And in case you don’t believe this, it adds: ‘The National Guardsmen in charge of protecting power plants took this photo!'”

godzilla

Can solar let poor people “leapfrog” the grid?

Short answer: not really.

Cell phones were/are a big success in allowing poor people in the developing world to get first world service without requiring a traditional “land-line” infrastructure.

But most solar installations for the poor in the developing world are pretty low power. They don’t run bigger appliances.

Also, we at CG have just learned that the sun doesn’t shine at night!

At our house we have a solar array that is powerful enough to run the all our appliances and provide all our energy needs. It cost $15,000! It’s tied to the grid so we don’t need to worry about the night time power issue, but on our own, we’d need one or two of those new Elon Musk Powerwall storage units, say another $7000.

That cost structure is just not going to work in the developing world.

As things stand, there is still no cheap, good, substitute for an electrical grid. What the linked article calls “real electricity”.

And while many of us worry about the environmental effects of increased carbon based electricity production, it’s good to remember that a lot of folks without electricity are burning kerosene for lighting or running generators to power appliances.

Privatization is not for the faint of heart

Pakistan suffers frequent power outages that have a huge negative cost on businesses and general quality of life (story here: “Pakistan utility company fights to power chaotic port megacity“).  Here is why privatization seems like an obvious choice:

1. “Power cuts lasting 12 hours a day or more have devastated Pakistan’s economy. The loss of millions of jobs has fuelled unrest in a nuclear-armed nation already beset by a Taliban insurgency.”

2. “At the state-run Peshawar Electricity Supply Company, the majority of staff are illiterate, most new hires are relatives of existing staff and 37 percent of power generated was stolen.”

In 2008, the government decided to privatize the Karachi Electric Supply Company. The new owners fired about 1/3 of the workers, cut off customers who didn’t pay their electric bills, and cracked down on people illegally tapping into the electric system.

The response was quite telling.  First, in a sign of how dysfunctional things were before privatization, fired workers offered to work for free because of the profitability of holding the post.  Apparently they don’t know much about efficiency wages.  Management told them no way, so they “camped outside the building for months” and more than “200 actual employees (who were forced to cross picket lines every day) were injured.”
Second, the new boss came under fire (literally) at his home.  Legislators tried to have him arrested for “not attending sub-committee meetings in the capital.” What in the world can these sub-committee meetings be and how could non-attendance be a jail-able offense? They sound instead like a huge waste of time and bureaucratic idiocy.
Third, the wealthy were offended that they might have to start paying for electricity.  In my favorite quote of the story, one wealthy man said “he couldn’t possibly start paying because his colleagues would think he had no influence left.” How would anyone know that he started paying?
Fourth, cracking down on illegal connections is dangerous business.  The mafia controls these connections and utility staff that take them down are often attacked.  Apparently 10 workers were taken hostage because of this last month. And some areas are too dangerous for workers to even enter: “Some slums are held by the Taliban or gangs, and KESC staff can’t even enter. They are experimenting with licensing powerful local businessmen to collect bills and cut off non-payers.”
Despite all of this, privatization actually seems to be working:

Last year the company made its first profit in 17 years. Theft has fallen by 9 percent in four years. Half the city, including two industrial zones, does not have daily power cuts.”

Perhaps the experience in Karachi will convince other cities of the benefits of privatization, although clearly buying and operating these utilities isn’t for the faint of heart.