Energy Poverty and the Impact of Wellbeing in ASEAN Under China’s Foreign Aid Motives

Abstract

Energy is one of the primary elements in human daily life. It is important, because it is used for cooking, lighting, and other business activities. However, it does not matter that energy poverty is connected to the electrical grid, and this topic remains focused on insufficient energy consumption. In many ways, this is due to the unaffordability of and inaccessibility to clean energy to support our daily essential needs, which may cause the deprivation of a household and affect its social wellbeing. This study investigates the incidence of energy poverty in China’s foreign aid countries. Our paper uses the latest panel data of selected countries in the Association of Southeast Asian Nations (ASEAN) from 2000–2019 to investigate the impact of energy poverty on energy consumption, education, and the per capita income of households. The selected five nations are Cambodia, Lao People’s Democratic Republic (PDR), Indonesia, Myanmar, and the Philippines. Our empirical outcomes provide support for economic and social wellbeing policymakers in their decision-making. Our results indicate that the impact of energy poverty on these households’ wellbeing is significant. Energy poverty household members in these countries that receive foreign aid from China have a higher probability of suffering high energy costs, having a significant dropout rate from schools, and having the least number of opportunities to improve their income. Our findings reveal a significant impact of the Chinese foreign aid program, which helps reduce energy poverty in this region. We suggest that Chinese and ASEAN governments urgently need to implement effective policy measures that focus on the provision of clean and affordable energy to low-income households in these poor ASEAN states.