There is a World fact: “each world citizen will have a vehicle in the future”. Developed countries are aware of it and they have efficient solution to improve mobility and traffic pollution, these countries have a first class public service as Metro or two floors buses for those who want to be out of this pollution. Colombian government is not clear on solutions about this issue. Main colombian cities are facing an increasing vehicle rate per 1.000 people, for instance Bogotá faced a rate of 199 in 2011, it is above of country rate which reached 78 in 2011. To built Bogotá’s metro and other metros in main cities as a solution to traffic pollution, the financial scheme is to take economic resources from crude oil income, increase vehicles' VAT rate from 25,0% to 40,0% to built metros as specific target and bring other tax rate on vehicles sales which must be dealt by each region in Colombia, it can be called public transport tax. We hope at the end of this national and regional government period Bogotá, and others main cities in Colombia shows advances in metro lines.
Author: Humberto Bernal,
Economist
e-mail: zhumber@gmail.com
It can be download at PDF
One of main problems around world is transportation, people needs travel to work, to visit their parents, to go shopping and to travel to countryside on holidays. Therefore citizens must have high class public transport service and private vehicles for those cases when public transport no make sense, for instance travel to countryside on holidays or due to work duties. How can we solve traffic congestion problem?, people want to own their car but they want to travel fast. Data around the World shows this fact, figure 1. For instance, at the United States almost each people has a car, her Motor Vehicles per 1.000 people (Vehicles rate forward) indicator reached 802 in 2010; for inhabitants from Monaco this indicator reached 908 in 2010; other countries that shows similar indicator are Iceland, Luxembourg and Australia. Colombia shows an indicator of 78 vehicles per 1.000 people in 2011, Peru and Bolivia show similar indicator as Colombia.
Figure 1. Vehicles rate
latest year information
Vehicles rate: Motor vehicles per 1.000 people.
source: World Bank Data. 175 Countries.
It is difficult to restrict demand of vehicles in order to improve traffic congestion because vehicle makes people increase their social status. Nowadays the car is the first thing that young workers want to buy, it dos not matter if they have to take a high rate credit. Figure 2 shows the relation between vehicles rate and GDP per capita relation, both indicators are in natural logarithms, this information is from 174 economies. The main information from this figure is vehicle rate increase 0,9% if GDP per capita faces an increase of 1,0%, therefore one can conclude that as income increase people demand vehicles by sure. Therefore, as developed countries, world society will reached a car per capita. The economic target is to bring more welfare to citizens and it is reached through more consumption, vehicles are an example. However, vehicles bring pollution and stress due to congestion, therefore governments have to give transport alternatives. Developed countries are aware of this issue and for those who does not have a car and for those who does not want to face traffic problem, these countries give a high class public transport service as Metro (underground) and high standard buses, in some cities as London they have two floors buses.
Figure 2. Vehicles rate and GDP per capita for 174 countries, latest year
(Data in natural logarithm)
Vehicles rate: Motor vehicles per 1.000 people.
source: World Bank Data. 174 Countries.
Bogotá, Barranquilla, Cali, Villavicencio traffic problem
Colombia has a big traffic problem due to most of their main cities do not have Metro service, for example Bogotá with 7,5 million of population does not have it. Medellín is the only colombian city that has a Metro. Figure 3 shows Bogotá Vehicle rate, this rate shows an increase from 99 in 2003 to 199 in 2011, this rate is above to country rate, it means a Compound Annual Growth Rate of 9.1% through this period, approximately twice people have vehicle in 2011 than in 2003 in Bogotá, what mess. This exponential growth goes with World trend: “a vehicle per capita”. Colombia government have to pay attention to this fact. Nowadays, Colombia has economic resources from oil crude sales to built the Metro in Bogotá, moreover oil crude incomes must be enough to built this public transport in others cities as Barranquilla, Cali and Villavicencio. But one must be aware that Colombia has a seven years crude oil reserves only, therefore this resources could not be enough to built public transport in Bogotá and others cities.Therefore, the fair financial scheme is to charge a high rate to vehicle sales for instance a VAT (Value Added Tax) of 40%. This tax can be supplemented with a regional tax rate charged to vehicles sales, this revenues must be dealt by each region. This financial scheme is fair due to those that make traffic congestion must give solutions and the solution is to pay public transport.
Figure 3. Bogotá Vehicles rate
2003 - 2011
Vehicles rate: Motor vehicles per 1.000 people.
Source: Bogota Mayor offices (Veeduria Distrital).
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