South Asian countries need to put in place policies that can create energy efficiency as the region is grappling with rising energy and food prices mainly due to COVID 19 pandemic.
“Energy has to be imported, that increases the production cost. But more importantly it will heavily put pressure on the balance of payments or the trade balance. When you’re already in a difficult situation of servicing your debts in financial markets- that is a severe setback,” Hans Timmer World’s Bank Chief Economist for South Asia told at a webinar organized by the Central Bank of Sri Lanka under the theme, ‘Impact of the Pandemic on South Asian Economies and How Digitization And Services Led Growth Can Help Sri Lanka to Rebound’.
Noting that it is not an easy task to immediately have a solution for rising energy price, Timmer said, “But in my view it creates an incentive and even it creates an opportunity to move towards more renewable energy sources. To do that, it is essential to put in place policies that can create energy efficiency. According to Timmer it will solve some of the problems in the balance of payments when increasing the energy security. “So that, you make sure that production is going forward in a more sustainable manner.”
He also added that high energy price of fossil fuel will make other sources of energy- renewable energy more profitable. “We have already seen that solar energy in South Asia is more profitable than fossil fuel energy .l see it as an opportunity to go greener to achieve development targets in a big way.”
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