Role Of Transport In Economic Development 2a3gn
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Dr. Sukumar Nandi Indian Institute of Management Lucknow
About me •
Sukuamr Nandi
• • • •
MA ( Economics), M.Phil. ( Econ) , Calcutta University Ph.D. ( Economics), Utah State University, Logan, USA Position: Professor of Economics, Dean ( Planning & Development),
•
Chief Editor, METAMORPHOSHIS
•
Past position:
• • • •
04/02/08
[ Journal of IIM Lucknow]
Indian Institute of Foreign Trade, New Delhi; National Institute of Bank Management, Pune Vidyasagar University, WB; Calcutta university [ Economics Department] Massachusetts College of Liberal arts, Mass, USA; Utah State university, USA
Transport and Economic Development __ S Nandi
2
Importance of Transport •
Economic: – Good transport provides a clear competitive edge providing;• Easy access • Low congestion costs • Good environment; so – Efficient transport facilitates economic growth, BUT – Congestion hinders business efficiency and impacts on regeneration
•
Environmental: – Efficient transport helps provide high quality of life and address climate change, BUT – Unmanaged transport causes air quality problems, noise and traffic accidents
•
Sustainable communities: – A good transport network enables equality of travel opportunity to all, BUT – Lack of transport provides a barrier to social inclusion particularly in areas of persistent social disadvantage and workless ness
04/02/08
Transport and Economic Development __ S Nandi
3
Ideal Transport System
A fully integrated safe transport network which s social and economic regeneration and, ensures good access for all which, is operated to the highest standards to protect the environment and ensure quality of life
04/02/08
Transport and Economic Development __ S Nandi
4
Transport •
A statutory requirement set within the framework of National Priorities
• • • • •
Removing Congestion Air quality and quality of life Accessibility Road safety Problems related to Climate change
04/02/08
Transport and Economic Development __ S Nandi
5
Long Run Strategy Manage for the growth of transport demand to provide for the efficient movement of people and goods
04/02/08
Transport and Economic Development __ S Nandi
6
Modern Transport System _ Dubai
04/02/08
Transport and Economic Development __ S Nandi
7
Los Angeles Roadways
04/02/08
Transport and Economic Development __ S Nandi
8
Los Angeles Highways
04/02/08
Transport and Economic Development __ S Nandi
9
Some Recent Trend in Indian Context • Some increase in population, esp. city centre • More employment but new demands for travel opportunity, and • Continuing problems of accessibility in areas of disadvantage and workless ness • Rising freight movement particularly to the port • Increase in car ownership and use, • leading to • Rise in congestion levels and poor air quality • Reduction in walking and bus use – health and obesity time bomb • Increase in rail use leading to some overcrowding
04/02/08
Transport and Economic Development __ S Nandi
10
How to Manage the city centre of Metro like Delhi • • • • •
The heart of the city region Main business district should have easy access Main economic growth area Growing importance of tourism Air Quality Management Area – traffic levels largely responsible • Forecast 10% traffic growth to the metro in morning peak
04/02/08
Transport and Economic Development __ S Nandi
11
How to manage Traffic in City Centre
•
Aim to provide high quality environment for all s of the city centre
– reduce traffic in core centre to reduce vehicle speeds – improving air quality for all – avoid fast through traffic to ensure a safe, friendly and historic city centre – improve access to all parts of the centre for all s - better signage and road layout 04/02/08
Transport and Economic Development __ S Nandi
12
How to Manage •
Managing traffic growth relies on – Managing the road network – Designated freight routes – Managing parking demand – Planning and development control – Increase in quality of public transport – partnership with operators crucial – Promoting walking and cycling • Using Travel Wise to work with employers to promote travel plans for major businesses, health care sites and schools •
Developing links with key players like different Chambers of Commerce and industrial houses
04/02/08
Transport and Economic Development __ S Nandi
13
Plan • • • • • •
Government of India___ Efforts National Urban Transport Policy Identifies the growing problem Recognizes constitutional devolution to the states but appreciates the importance of some central functions, the need for technical advice and therefore, Advises on an issue by issue basis even, on state functions
04/02/08
Transport and Economic Development __ S Nandi
14
National Transport Policy • • • • •
The declared objectives A four pronged approach “to ensure easily accessible, safe, affordable quick, comfortable reliable and sustainable mobility for all” to: reduce the existing levels of congestion reduce the impact of motor vehicles on air pollution improve road safety, and foster sustainable technologies
• • • • • • • • • • • • •
National Urban Transport PolicyThe identified issues Public vs Personal transport Ownership vs usage Public transport pricing Public vs private provision Technologies for public transport Choice of fuel and vehicle technologies Managing vehicles in-use Local planning Non-motorized transport Financing Institutional co-ordination
04/02/08
Transport and Economic Development __ S Nandi
15
A Framework
Transport infrastructure improvement
Reduced distances
Reduced congestion
Other externalities
Cheaper, more reliable transport services
Logistical improvements
04/02/08
Facilities consolidation
Location effects
Value added effects
Transport and Economic Development __ S Nandi
16
Transport and Rural Poverty •
There are, however, good examples from Asia where Yao (2003) has documented the poverty reducing effects of rural roads in India and the People’s Republic of China. Xianbin Yao, Infrastructure and poverty reduction: Making Work for the Poor, May 2003, Asian Development Bank Bulletin
•
Markets
The elasticity estimates measure the percentage changes of the rural poverty incidence with respect to road infrastructure investments, working through different channels.
04/02/08
Transport and Economic Development __ S Nandi
17
Effects of Rural Transport on Poverty Reduction India Poverty Reducing Effects Rural Road Investment
Elasticity*
Peoples Republic of China
% Share Elasticity*
% Share
Direct effect through increase in agricultural productivity
-0.0119
17.92
-0.0450
28.46
Direct effect through increase in non-farm employment
-0.0300
45.18
-.0417
26.38
Direct effect through increase in rural wages
-0.0204
30.72
-0.0399
25.24
Indirect follow-on effect through higher economic growth
-0.0041
6.18
-0.0315
19.92
04/02/08
Overall
Transport and Economic Development __ S Nandi
-0.0664
100.00
-0.1581
100.00
18
Effects on Poverty Reduction 1991/92 1998/99 2005/06
80 70
68
64
59
Incidence (in percent)
60
52 46
50 40 30
39
35
30
25
23 8
40
38 29
24 17
20 10
39
29 17
11 10
19 20 13
0 Public Sector Employment
Private Private Formal Informal Employment Employment
Export Farming
Food Crop Farming
Non-Farm SelfEmpolyment
NonWorking
Ghana
Main Economic Activity 04/02/08
Transport and Economic Development __ S Nandi
19
Trend in enger Transport in Industrial Countries
enger transport 100% 80%
Air Waterborne
60%
Tram, metro
40%
Railways
20%
enger car
Bus/coach
0% EU-15 04/02/08
USA
Japan
Transport and Economic Development __ S Nandi
20
Trend of Transport in Developed world
Cars per 1000 inhabitants
Motorization Level and Wealth in OECD Regions 1970-2000 900 800 700 600 500 400 300 200 100 0 10000
15000
20000
25000
30000
35000
GDP per capita (in 1995 US$ PPP) USA
04/02/08
EU-15
Japan
Transport and Economic Development __ S Nandi
21
Modes of enger Transport in the USA 8000 7000 6000 billionpkm
5000 4000 3000 2000 1000 0 1970
1975
1980
US.cars 04/02/08
1985 USAviation
1990 Bus
1995
2000
Railway
Transport and Economic Development __ S Nandi
22
EUROPE : Modes of Freight Transport 1600 1400 1200 Billiontkm
1000 800 600 400 200 0
1970 1975 1980 1985 1990 1995 2000
04/02/08
EURoad
EUShort-sea
EUInlandwaters
EUPipelines
EURail
Transport and Economic Development __ S Nandi
23
Findings The analysis of historic trends shows that road transport is the driving factor of transport demand (for enger and freight) from 1970 to 2000 in the industrial countries External costs of transport are high and mainly caused by road transport Policy for decoupling has to focus on instruments addressing impacts from road transport Taxes based on distance driven and the environmental performance of vehicles can encourage important modal shifts They generate revenue for developing more environmentally friendly modes
The internalisation of external costs of transport leads to a decrease of transport activities and to a further reduction of externalities Policies for decoupling need to combine a package of instruments including economic instruments and regulations 04/02/08
Transport and Economic Development __ S Nandi
24
About me •
Sukuamr Nandi
• • • •
MA ( Economics), M.Phil. ( Econ) , Calcutta University Ph.D. ( Economics), Utah State University, Logan, USA Position: Professor of Economics, Dean ( Planning & Development),
•
Chief Editor, METAMORPHOSHIS
•
Past position:
• • • •
04/02/08
[ Journal of IIM Lucknow]
Indian Institute of Foreign Trade, New Delhi; National Institute of Bank Management, Pune Vidyasagar University, WB; Calcutta university [ Economics Department] Massachusetts College of Liberal arts, Mass, USA; Utah State university, USA
Transport and Economic Development __ S Nandi
2
Importance of Transport •
Economic: – Good transport provides a clear competitive edge providing;• Easy access • Low congestion costs • Good environment; so – Efficient transport facilitates economic growth, BUT – Congestion hinders business efficiency and impacts on regeneration
•
Environmental: – Efficient transport helps provide high quality of life and address climate change, BUT – Unmanaged transport causes air quality problems, noise and traffic accidents
•
Sustainable communities: – A good transport network enables equality of travel opportunity to all, BUT – Lack of transport provides a barrier to social inclusion particularly in areas of persistent social disadvantage and workless ness
04/02/08
Transport and Economic Development __ S Nandi
3
Ideal Transport System
A fully integrated safe transport network which s social and economic regeneration and, ensures good access for all which, is operated to the highest standards to protect the environment and ensure quality of life
04/02/08
Transport and Economic Development __ S Nandi
4
Transport •
A statutory requirement set within the framework of National Priorities
• • • • •
Removing Congestion Air quality and quality of life Accessibility Road safety Problems related to Climate change
04/02/08
Transport and Economic Development __ S Nandi
5
Long Run Strategy Manage for the growth of transport demand to provide for the efficient movement of people and goods
04/02/08
Transport and Economic Development __ S Nandi
6
Modern Transport System _ Dubai
04/02/08
Transport and Economic Development __ S Nandi
7
Los Angeles Roadways
04/02/08
Transport and Economic Development __ S Nandi
8
Los Angeles Highways
04/02/08
Transport and Economic Development __ S Nandi
9
Some Recent Trend in Indian Context • Some increase in population, esp. city centre • More employment but new demands for travel opportunity, and • Continuing problems of accessibility in areas of disadvantage and workless ness • Rising freight movement particularly to the port • Increase in car ownership and use, • leading to • Rise in congestion levels and poor air quality • Reduction in walking and bus use – health and obesity time bomb • Increase in rail use leading to some overcrowding
04/02/08
Transport and Economic Development __ S Nandi
10
How to Manage the city centre of Metro like Delhi • • • • •
The heart of the city region Main business district should have easy access Main economic growth area Growing importance of tourism Air Quality Management Area – traffic levels largely responsible • Forecast 10% traffic growth to the metro in morning peak
04/02/08
Transport and Economic Development __ S Nandi
11
How to manage Traffic in City Centre
•
Aim to provide high quality environment for all s of the city centre
– reduce traffic in core centre to reduce vehicle speeds – improving air quality for all – avoid fast through traffic to ensure a safe, friendly and historic city centre – improve access to all parts of the centre for all s - better signage and road layout 04/02/08
Transport and Economic Development __ S Nandi
12
How to Manage •
Managing traffic growth relies on – Managing the road network – Designated freight routes – Managing parking demand – Planning and development control – Increase in quality of public transport – partnership with operators crucial – Promoting walking and cycling • Using Travel Wise to work with employers to promote travel plans for major businesses, health care sites and schools •
Developing links with key players like different Chambers of Commerce and industrial houses
04/02/08
Transport and Economic Development __ S Nandi
13
Plan • • • • • •
Government of India___ Efforts National Urban Transport Policy Identifies the growing problem Recognizes constitutional devolution to the states but appreciates the importance of some central functions, the need for technical advice and therefore, Advises on an issue by issue basis even, on state functions
04/02/08
Transport and Economic Development __ S Nandi
14
National Transport Policy • • • • •
The declared objectives A four pronged approach “to ensure easily accessible, safe, affordable quick, comfortable reliable and sustainable mobility for all” to: reduce the existing levels of congestion reduce the impact of motor vehicles on air pollution improve road safety, and foster sustainable technologies
• • • • • • • • • • • • •
National Urban Transport PolicyThe identified issues Public vs Personal transport Ownership vs usage Public transport pricing Public vs private provision Technologies for public transport Choice of fuel and vehicle technologies Managing vehicles in-use Local planning Non-motorized transport Financing Institutional co-ordination
04/02/08
Transport and Economic Development __ S Nandi
15
A Framework
Transport infrastructure improvement
Reduced distances
Reduced congestion
Other externalities
Cheaper, more reliable transport services
Logistical improvements
04/02/08
Facilities consolidation
Location effects
Value added effects
Transport and Economic Development __ S Nandi
16
Transport and Rural Poverty •
There are, however, good examples from Asia where Yao (2003) has documented the poverty reducing effects of rural roads in India and the People’s Republic of China. Xianbin Yao, Infrastructure and poverty reduction: Making Work for the Poor, May 2003, Asian Development Bank Bulletin
•
Markets
The elasticity estimates measure the percentage changes of the rural poverty incidence with respect to road infrastructure investments, working through different channels.
04/02/08
Transport and Economic Development __ S Nandi
17
Effects of Rural Transport on Poverty Reduction India Poverty Reducing Effects Rural Road Investment
Elasticity*
Peoples Republic of China
% Share Elasticity*
% Share
Direct effect through increase in agricultural productivity
-0.0119
17.92
-0.0450
28.46
Direct effect through increase in non-farm employment
-0.0300
45.18
-.0417
26.38
Direct effect through increase in rural wages
-0.0204
30.72
-0.0399
25.24
Indirect follow-on effect through higher economic growth
-0.0041
6.18
-0.0315
19.92
04/02/08
Overall
Transport and Economic Development __ S Nandi
-0.0664
100.00
-0.1581
100.00
18
Effects on Poverty Reduction 1991/92 1998/99 2005/06
80 70
68
64
59
Incidence (in percent)
60
52 46
50 40 30
39
35
30
25
23 8
40
38 29
24 17
20 10
39
29 17
11 10
19 20 13
0 Public Sector Employment
Private Private Formal Informal Employment Employment
Export Farming
Food Crop Farming
Non-Farm SelfEmpolyment
NonWorking
Ghana
Main Economic Activity 04/02/08
Transport and Economic Development __ S Nandi
19
Trend in enger Transport in Industrial Countries
enger transport 100% 80%
Air Waterborne
60%
Tram, metro
40%
Railways
20%
enger car
Bus/coach
0% EU-15 04/02/08
USA
Japan
Transport and Economic Development __ S Nandi
20
Trend of Transport in Developed world
Cars per 1000 inhabitants
Motorization Level and Wealth in OECD Regions 1970-2000 900 800 700 600 500 400 300 200 100 0 10000
15000
20000
25000
30000
35000
GDP per capita (in 1995 US$ PPP) USA
04/02/08
EU-15
Japan
Transport and Economic Development __ S Nandi
21
Modes of enger Transport in the USA 8000 7000 6000 billionpkm
5000 4000 3000 2000 1000 0 1970
1975
1980
US.cars 04/02/08
1985 USAviation
1990 Bus
1995
2000
Railway
Transport and Economic Development __ S Nandi
22
EUROPE : Modes of Freight Transport 1600 1400 1200 Billiontkm
1000 800 600 400 200 0
1970 1975 1980 1985 1990 1995 2000
04/02/08
EURoad
EUShort-sea
EUInlandwaters
EUPipelines
EURail
Transport and Economic Development __ S Nandi
23
Findings The analysis of historic trends shows that road transport is the driving factor of transport demand (for enger and freight) from 1970 to 2000 in the industrial countries External costs of transport are high and mainly caused by road transport Policy for decoupling has to focus on instruments addressing impacts from road transport Taxes based on distance driven and the environmental performance of vehicles can encourage important modal shifts They generate revenue for developing more environmentally friendly modes
The internalisation of external costs of transport leads to a decrease of transport activities and to a further reduction of externalities Policies for decoupling need to combine a package of instruments including economic instruments and regulations 04/02/08
Transport and Economic Development __ S Nandi
24
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