Gossip over gas

Few of my friends feel that, at household level at least, gas is for the rich but not for the poor. I reckon, there is a sound economic reasoning behind the hypothesis. The capital cost of a connection for gas is estimated to hover around Tk. 10,000. In addition, there are expenses on accessories and burners to bedevil the access of these poor to such an important energy source. Secondly, even at the current price of gas, the monthly bill on gas for the poor would be too burdensome to bear with. And finally, gas supply would hardly help industries or commercial entities from which the poor would directly benefit.

My friends, some of who are famous, of course, contend that gas-driven industries like fertilizer and power plants might inject some indirect or spillover benefits to the poor. Empirical evidences are in avalanche to support gas-growth nexus and poverty reduction. For example, gas generates electricity and helps produce fertilizer to reduce cost of irrigation and fertilizer. A priori reasoning would suggest that tenant, small and marginal farmers -- accounting for over three-fourths of farm households in rural areas -- could reap home a better harvest and higher income from such developments. Again, establishment of cold storage or cooling facilities might allow a move toward more high value crops. Agro processing industries could grow following gas availability or the existing ones could become competitive. By and large, in popular parleys, gas offers no direct benefits to reduction of poverty.

But my recent visit to a village gave just the opposite impression. I can, perhaps, now hypothesise that gas could be a source of cost effective energy for the poor and that the poor tend to benefit more from gas at household level than the rich. Such hypotheses, to be accepted, predominantly need ample empirical evidences and sound econometric techniques, both of which I am lacking at the moment. But gossip over gas with few poor households could possibly open the door for detailed discussions.

The village I recently visited with a young friend Habib is called Charcahrtola located at Ashugonj. We met family members of Shamsu Mia (47) -- the only earning member of a household of seven. He works in a rice boiling plant to earn Tk.5000 per month. Shamsu Mia owns one decimal homestead land inherited from paternal source. Eight people reportedly reside in a very small house made of tin roof and kutcha floor. But the household gained access to electricity in 1980 and to gas in 2001.

"How could you manage the cost of connection, allegedly too high to be within your reach?" -- we posed the question to Mrs. Shafia who was available to quench our queries. She tells us the story. Shamsu Miah has three brothers whose average monthly income also hovers around Tk.3000-4000 per month. They live separately but realising the returns from gas, all the brothers decided that they should share the cost of connection. One of them approached ASA -- an NGO -- for a loan of Tk.10, 000. Now the borrower has to pay Tk300 per week to settle the loan amount in 46 weeks.

Getting the connection, they further decided that they would cook their meals by rotation. Thus the total monthly bill is shared among brothers and each has to bear a burden of Tk.100 or so per month! We visited the kitchen. A single burner was set in a very small room under a tin shed. But no fences around, no pucca floor either.

Meantime, Shamsu Mia's father joined the discussion. He told us that they were forced to go for gas -- despite being poverty stricken -- as there was acute shortage of firewood in and around Ashugonj. The area where they live turned into a semi-desert within a span of a decade and through the treacherous path of development.

Next we visited the adjacent household and heard the same story. Shahidul Alam (37) drives a microbus to earn Tk.4000/month. They also share a common kitchen and total bill for gas. Soon some ladies appeared before us to tell us

the benefits of gas in their respective households. During the discourse, the economics of gas dominated the discussions. Use of traditional fuels, on average, costs a poor household Tk.500-600. If the capital cost could be managed for connection, that translates into a saving of Tk.100-200 per month. Earlier, it would take 2-3 hours for cooking purposes but now all cooking can be completed within one hour. Women are getting more time to sew cloth or to perform some other activities.

Shahadat (12), a madarsha student, pointed out the real economics of gas use. According to him, his mother used to get sick frequently before the advent of the gas but now-a-days she maintains a good health. No smoke, to dirt. Now, health conditions have improved all around and the costs on account of soap have reduced. It appeared from the discussions that the total monetary saving for households with gas amounts to Tk. 300-500 per month. This is 10 per cent of the total income of poor households.

If one travels to Sirajgonj, where gas has just been made available, one would come across various types of industries and commercial activities where poor people are directly engaged. There are two or three factories producing lime from limestones -- a rare economic activity now in evidence. Yarn moisturing has become more cost effective, that goes to help the poor weavers from Belkuchi. Textile and cement factories are using gas. There are thus both direct and indirect impacts of gas on the poor. There should be a change in our perceptions about the impact of gas on poverty reduction. But before drawing any policy conclusions, more research is needed and we are waiting for that.

Abdul Bayes is Professor of Economics at Jahangirnagar University