BY GABOR DEBRECZENI
Gabor Debreczeni is a Hungarian-American first-year MA candidate in International Development. He's an editor of SAIS Perspectives, and he's interested especially in trade policy and urban infrastructure and transportation planning in the developing world. He blogs independently here.
Latin America is in a virtual tie with North America for the title of most urbanized region on the planet. About 80 percent of its population lives in cities. From 1990 to 2014, the region’s urban population grew by almost 60 percent, and is expected to grow by a further 35 percent by 2050 (UN 2014). ECLAC (2004) has attributed much of Latin America’s urbanization to national development plans centered on Import Substitution Industrialization, which caused national investment to be disproportionately focused on urban areas. While authors such as Guzman (2006) expected rural-to-urban migration to slow as Latin America phased out ISI, the data show that this has not occurred. From 1980 to 2000, over one third of Latin America’s urban growth has been due to migration from the countryside (see note one), and all countries in the region continue to observe rural-to-urban migration (Rodriguez 2007).
Such quick urban growth can be disruptive, and furthermore, much of it has occurred in a haphazard fashion rarely seen in the developed world. As noted by de la Torre (2011):
“New housing clusters spring up on lower-cost rural lands without any planning. Disconnected sites are first populated with disorderly patches of impersonal housing that have no common spaces or places for recreation. Later, services, and finally public transportation might arrive irregularly. Because the development is isolated, it is expensive to get anywhere else.”
The unplanned nature of the growth of cities is likely to result in a further underestimation of urbanization in the region. In fact, the largest source of urban-to-rural migration in the region is misleading; it is from suburbanization and the urbanization of areas previously considered rural (Rodriguez 2007).
A further challenge for the region is vehicular congestion. In Sao Paulo, Mexico City, and Bogotá, for example, a strong majority of local transportation experts surveyed labeled the issue as “critical.” The three cities, along with Santiago, have gone as far as implementing partial vehicle bans in an attempt to ease congestion and the resultant air pollution (Mahendra 2008). This issue is unlikely to abate in the near future, even with further driving restrictions, because for developing countries, the number of miles driven tends to increase with income (World Bank 2002). Furthermore, Latin America still has a substantial amount of room to grow when it comes to vehicular ownership. The region as a whole owns roughly 0.2 cars per capita, compared to a developed world average of 0.6 (World Bank 2014). Compounding the issue of congestion is the fact that rapidly-growing cities tend to have above-average car ownership rates with below-average amounts of land space devoted to roads (World Bank 2002, see note two).
A SHORTAGE OF INVESTMENT
A comparative study of transportation investment does not paint Latin America in a favorable light. In a recent study, the authors used international trade as a proxy for the demand for transportation investment. They found Latin America to be lagging Asian countries with regard to the adequacy of its investment as early as 1995. Even more worryingly, they found that Latin America is continuing to fall further behind, as transportation investment in the region has fallen by half since the mid-1980s, and by two-thirds if considered as a fraction of GDP (CEPAL 2009).
The shortage of investment has been particularly acute in the newly urbanizing fringe areas of cities referenced above. De la Torre (2011) notes the case of Mexico, where “a quarter of the houses sold through government housing programs are not occupied. Ten percent have been totally abandoned and are in advanced stages of deterioration. The reason for this is that the cost of transportation into the city is greater than the cost of the mortgage.” A further reason to worry about the lack of proactive transportation investment in the region is that urban growth is diversifying away from the major cities in the region to smaller urban areas. In fact, medium-sized cities, where transportation infrastructure is less developed, are growing more quickly in Latin America than those cities with more than a million inhabitants (Rodriguez 2007).
WHY DOES THE SHORTAGE MATTER?
Investment in infrastructure can have an impact on trade, growth, and development, as the resulting improvements lower transit costs, increase efficiency in the movement of labor and goods, and increase the sizes of markets for both (Kotschwar 2012). This is born out in historical evidence. Calderon and Serven (2004) found that Latin America’s poor record of infrastructure investment significantly explains the region’s underperformance in trade and growth compared to East Asia from the 1980s onward.
Calderon and Serven (2004) also found that infrastructure improvement, particularly with regard to road-building, lessens the country’s inequality by improving the standard of living for the poor. It is not surprising that transportation infrastructure investment is a pro-poor policy; as the OECD (2006) wrote, “transport facilitates access to economic and social services,” including education services (see note three). The wealthy are much less likely to be kept away from these services because of poor transportation infrastructure, whether because they own cars or because they live closer to the services. In Latin America, the average incomes of car users are, depending on the country, between double and four times the average incomes of those without access to car (World Bank 2002). Mahendra (2008) also notes that in multiple countries in Latin America, there are no low-income car owners. An interesting formulation of why transportation investment is pro-poor comes from transit planner Jarrett Walker, who champions the idea that “frequency is freedom” – that is, the regularity with which methods of transportation are available to an individual determines how free they are spatially to live life in the way they would like (Walker 2011). Of course, having a car allows one to permanently have access to infinite frequency, deepening the inequalities of freedoms of movement.
The lack of transportation investment is particularly toxic in newly urbanized outlying areas with a pattern of haphazard development. The lack of transportation options can lead to abandoned neighborhoods, which become hotbeds for crime, because recent migrants into these transportation-poor districts cannot afford cars (De la Torre 2011). This issue has even surfaced in the United States, where a majority of poor now live in suburban areas originally built for cars that are now beyond the means of the neighborhood’s residents (Mertens 2013).
ACTION ON THE GROUND
While the level of transportation investment in Latin America has been inadequate, it has also been far from zero. The region has, for instance, become a global leader in the use of bus rapid transit, frequently called BRT. Buses running on BRT corridors operate almost like light rail—separated from traffic, frequently in the median of the road, with platform-level boarding, and with off-board fare collection (ITDP 2014). While BRT has lower top-end capacity than light rail or a subway, it is cheaper to establish. (MAPC) As of December 2014, the Institute for Transportation and Development Policy, which establishes a standard for BRT systems, has awarded its “Gold-standard” designation to only eight systems in the world, all of which are in Latin America (see note four). Walker (2014) points out that the developing world is in the perfect position to take advantage of BRT systems, as “car ownership is still moderate, government power tends to be consolidated enough that decision making is easy, [and] there is simply not enough money [for] rail.”
Mahendra (2008) notes that the successes of BRT were evident early in the projects’ lifetimes, with reduced congestion and travel times on the BRT corridor in Mexico City, and a shift by car users to the bus system along the TransMilenio BRT corridor in Bogotá. In Bogotá, the system has further disbanded the car-driving culture in the city—as of 2004, only 15 percent of trips were made by private car; a yearly day was created on which no residents drive; and most major roads are closed on Sundays and holidays. In a vote of confidence for the BRT movement, in all four cities in Mahendra’s survey, a majority of respondents chose “improve public transport” as the best avenue for solving the problem of congestion.
Latin America has made substantial progress with regard to its transportation infrastructure, but a lot remains to be done. The quality of infrastructure is one of the key components of global competitiveness and the lack of sufficient investment is holding the region back on growth, trade, and the lessening of poverty and inequality. If the region continues to be negligent with regard to its level of transportation investment, it runs the risk of being caught by Southeast Asia, which is still behind Latin America in terms of infrastructure quality but has shown a greater willingness to make large-scale investments (World Economic Forum 2014).
The status quo is an inadequate option for Latin America. Rising incomes will raise the demand for cars in its growing cities, physically slowing the cogs of its most important economic centers, and exacerbating inequality caused by low-income neighborhoods situated in transit deserts isolated from economic and social services. Latin America’s experience with BRT systems is encouraging, but much more investment is needed in transportation to keep the lack of infrastructure from becoming a more and more significant bottleneck on the region’s progress.
NOTE ONE: This has partially been due to the fact that the region’s agricultural innovation has continued to be of the labor-reducing kind, and has also resulted in some agricultural labor commuting from cities as seasonal labor. (Rodriguez 2007).
NOTE TWO: Astonishingly, Mexico City averages weekday traffic speeds below 10 km/h, while Sao Paulo averages below 15 km/h (World Bank 2002).
NOTE THREE: Furthermore, Willoughby (2004) finds that local (city or village-level) transportation investment can cause significant progress toward the achievement of three of the eight Millennium Development Goals, and some progress toward another four.
NOTE FOUR: One in Mexico, one in Guatemala, two in Colombia, one in Peru, and three in Brazil. Technically, Bogotá’s TransMilenio system has received four “Gold-standard” designations for its four lines, bringing the total count of “Gold-standard” systems to eleven (ITDP 2014).
Calderon, C. & Serven, L. (2004) The effects of infrastructure development on growth and income distribution. Central Bank of Chile Working Papers. Available from: http://www.bcentral.cl/estudios/documentos-trabajo/pdf/dtbc270.pdf.
CEPAL. (2009) The Transport and Trade Infrastructure Growth Gap in Latin America. Available from: http://www.cepal.org/transporte/noticias/bolfall/2/38992/fal_276_infrastructural_gap.pdf.
De La Torre, G. (2011) Sustainability of housing and urban development in Latin America. Americas. 63 (5). p.42-43.
Dufour, D. & Piperata, B. (2004) Rural-to-urban migration in Latin America: an update and thoughts on the model. American Journal of Human Biology. 16 (4). P.395-404.
ECLAC. (2004) Social Panorama of Latin America. Available from: http://repositorio.cepal.org/bitstream/handle/11362/1222/S0411873_en.pdf?sequence=1.
Guzman, J. (2006) La démographie de l’Amérique latine et de la Caraïbe depuis 1950. Available from : http://www.cairn.info/revue-population-2006-5-p-623.htm.
ITDP. (2014) The Bus Rapid Transit Standard. Available from: https://www.itdp.org/library/standards-and-guides/the-bus-rapid-transit-standard/.
Kotschwar, B. (2012) Transportation and Communication Infrastructure in Latin America: Lessons from Asia. Peterson Institute for International Economics Working Paper Series. 12 (6). Available from: http://www.iie.com/publications/wp/wp12-6.pdf.
Mahendra, A. (2008) Vehicle Restrictions in Four Latin America Cities: Is Congestion Pricing Possible? Transport Reviews. 28 (1). p.105-133.
MAPC. Bus rapid transit vs. light rail transit. Available from: http://www.mapc.org/sites/default/files/BRTvsLRT.pdf.
Mertens, R. (2013) Face of US poverty: These days, more poor live in suburbs than in cities. The Christian Science Monitor. 11th September. Available from: http://www.csmonitor.com/USA/Society/2013/0911/Face-of-US-poverty-These-days-more-poor-live-in-suburbs-than-in-cities.
OECD. (2006) Promoting Pro-Poor Growth: Infrastructure. Available from: http://www.oecd.org/development/povertyreduction/36301078.pdf.
Rodriguez, J. (2007) Spatial distribution of the population, internal migration, and development in Latin America and the Caribbean. Available from: http://www.un.org/esa/population/meetings/EGM_PopDist/P06_Rodriguez.pdf.
UN. (2014) World Urbanization Prospects: highlights. Available from: http://esa.un.org/unpd/wup/Highlights/WUP2014-Highlights.pdf.
Willoughby, J. (2011) How frequent is freedom? Human Transit. 29th December. Available from: http://www.humantransit.org/2011/12/how-frequent-is-freedom.html.
Walker, J. (2014) The explosive growth of bus rapid transit (BRT). Human Transit. 3rd December. Available from: http://www.humantransit.org/2014/12/new-itdp-report-global-brt-infrastructure-has-grown-rapidly-over-past-decade.html.
Willoughby, C. (2004) Infrastructure and the Millennium Development Goals. Available from: http://www.oecd.org/development/povertyreduction/36567911.pdf.
World Bank. (2002) Cities on the Move. Available from: http://siteresources.worldbank.org/INTURBANTRANSPORT/Resources/cities_on_the_move.pdf.
World Bank. (2014) Motor vehicles (per 1,000 people). Available from: http://data.worldbank.org/indicator/IS.VEH.NVEH.P3.
World Economic Forum. (2014) Global Competitiveness. Available from: http://www.weforum.org/issues/global-competitiveness.