Page 1 of 5 The Economies of Cross-Border Electricity Trading in Bangladesh Dr. Sakib Bin Amin 1 and Muntasir Murshed 2 Abstract The growing demand for electricity in everyday life is an undisputed macroeconomic matter and in order to meet such requirements a nation has to be self-sufficient in electricity generation. However, most developing countries are unable to produce enough electricity on their own and therefore have to cope with the burden of ‘power deficit,’ which itself has adverse impacts depriving the nations from potential economic growth rates. Thus, the prospect of Cross-Border Electricity Trading (CBET) emerges as a possible solution in mitigating the crisis. Bangladesh is believed to have tremendous advantages upon successful engagement in CBET arrangements with its South Asian counterparts. Rather than exchanging power with India only, there are enormous scopes for Bangladesh to diversify its electricity trading mechanisms mainly via execution of new trade agreement for importing cheap hydro power from that Bhutan. Electricity, being an energy reservoir, works as a strategic input for socio-economic development of a nation. It is widely recognised that, no underdeveloped nation has managed to embrace development beyond a subsistence economy without ensuring a minimum amount of electricity that is accessible to a broad segment of its population. Thus, the importance of electricity in an economy is undeniable which calls for proper energy sector arrangements and Bangladesh is no exception. One way of guaranteeing energy security could be being self- sufficient in electricity production. However, being self-sufficient in it is a humongous challenge which leaves Cross-border Electricity Trading (CBET) as a potential solution to the energy crisis faced by developing nations. Over the past decade, Bangladesh has portrayed notable economic performances in the sustaining annual growth rate of 6.34 % since 2011. This strong performance can be attributed to the nation’s commitments towards rapid urbanisation, enhanced industrialisation, microcredit revolution, higher public and private investments. Although the country has showed some progress to achieve macroeconomic stability, it continues to face challenges in the forms of underdeveloped infrastructure and energy deficits. In Bangladesh, electricity is the widely used 1 Dr. Sakib Bin Amin is an Assistant Professor at the School of Business and Economics at North South University, Bangladesh who completed his Ph.D. from Durham University with special emphasis on macroeconomics and energy economics. 2 Mr. Muntasir Murshed recently completed his Bachelor’s degree in the field of Economics from North South University, Bangladesh.