Developing countries - restructuring with benefits from competition (or not)

Many developing countries in Asia, Africa, Eastern Europe and South America are freeing up their electric energy industries in search of benefits from competition. These countries are on a fast-paced plan to implement restructuring despite the fact that the benefits from restructuring are yet to prove themselves in the more developed countries such as the US, Western Europe and Australia. The challenge is to develop a balance between introduction of competition, regulation and command and control. These countries need to conduct a comprehensive analysis and address a number of key considerations before proceeding with the decision to restructure their electric energy industries. They must also evaluate a number of considerations before selecting a specific market structure and proceeding with development of market design, rules and protocols. It is recommended that developing countries carefully study these considerations to ensure that the expected benefits from restructuring and privatizations are commensurate with its risks and costs. Finally, it is important to note that market rules and protocols cannot be developed in a vacuum and the market rules and protocols of the neighboring countries must be taken into account. This is especially important if the country under consideration requires energy through imports.