Inequality and the public transportation systemSunday, June 20, 2021
In early March 2020, just before the novel coronavirus pandemic hit Jamaica, the Jamaica Observer published an article written by Luis Alberto Moreno, then president of the Inter-American Development Bank (IDB), on inequality and the public transportation system. Moreno, who at the time appeared to have been experiencing some sort of epiphany, made the quite remarkable confession that, while “many of the public transportation systems we [the IDB] have helped to build attempt to recover investment and operation costs largely through fares [and] can appeal to investors and fiscal authorities by making a system financially self-sustaining in the short term, it often undermines its viability in the long term”. He then came to the profound realisation that: “We need to quit treating transportation subsidies as a drain on public funds and instead view them as strategic investments that generate huge social, economic, and environmental returns.”
At the time, it was evident that Moreno's new-found faith had emerged from his concern, fear even, that inequality was fostering social unrest in Latin America and the Caribbean and that, “if one public service [could] be said to symbolise the frustration driving social unrest, it [was] public transportation”.
Fear, as they say, is often the beginning of wisdom, and apostasy, we do know, requires courage.
I had hoped, then, that Moreno, having seen the light, would go forth and spread the good news that we “need to stop thinking of transportation in exclusively financial terms and start listening to the people who use it, so that we better grasp its full social and economic value”. Moreover, I had half-expected that he would work to convince the Government of Jamaica that “public transportation, in even the richest countries, tends to produce large operating deficits”; that governments in Europe, in the United States, and in Singapore (a frequently misunderstood and misused comparator) have always subsidised public transportation systems, partly because they see them as a public good that makes their cities more productive, competitive, and environmentally sustainable.
I had wanted Moreno to remind the International Monetary Fund (IMF) and the World Bank, his Washington neighbours with which his bank collaborates, coordinates, and colludes in setting policies, designing programmes, and providing joint financing for Jamaica, that the Metro in Washington, DC, which many of their staff and his use to get to and from work, covered less than half of its operating costs with revenue from fares, and that nearly all the rest comes from state and local subsidies.
And, I had prayed that the IDB, after the conversion of its president, would now work with the Government of Jamaica to design, finance, and build a public transportation system that was fit for purpose. One that “reflects people's actual priorities, their sense of dignity, and their willingness to pay for an efficient, dependable, and affordable service and that would be a crucial step toward rebuilding Jamaica's cities, so that housing, security, green spaces, and transportation are available — and affordable — for everyone”.
Well, the pandemic came and Moreno is no longer at the IDB. The bank's president since last October is Mauricio Claver-Carone. Before going to the IDB with the open, public support of Jamaica's Minister of Finance Dr Nigel Clarke, and over the objection of then US presidential candidate, Joe Biden, Claver-Carone, a Cuban-American, was a deputy assistant to US President Donald Trump for western hemisphere affairs on the National Security Council. He, no doubt, shares the view of his ideological soul mate, the fiscally conservative Dr Clarke, and the latter's immediate predecessor, Audley Shaw, that the State has no business in public transportation and that the Jamaica Urban Transit Company (JUTC) represents “a constant drain on public resources”.
In fact, Jamaica's two neoliberal, oligarchic political parties, and the special interest groups they represent, are of the view — and they have both expressed it in writing to the IMF — that capital expenditure by the JUTC should be “capped” or “rationalised” to meet the onerous and unreasonably determined primary fiscal surplus targets that they have both agreed with the IMF.
What we have, therefore, are two plutocratic, oligarchic parties with a shared and abiding faith in the neoliberal ideology, with its supporting pillars of liberalisation, privatisation, and deregulation, as well as a dogmatic belief that Government has no business running public transportation. Neither party will help to make the people of Jamaica understand that the $5.34-billion subvention which the Government provided the JUTC in financial year 2020/21 was not a loss, and the company — though it most certainly should be managed effectively, and that the cost of providing the service must reflect the country's economic means — is not expected to generate a surplus. The JUTC should continue to “sport the imprimatur of Jamaica's taxpayers”. Taxes are the price we have to pay for a civilised public transportation system.
So, instead of treating public transportation as the public good that it is, what we have is a totally deregulated transportation sector, in which everybody who wants a road traffic licence gets one. The JUTC, starved of funds, faces a slow, agonising, painful death by attrition, and a vacuum has been opened “fi man eat a food”, for hustlers and sundry criminals “fi run di route”, and chaos and murderous mayhem brought to the roads. Car dealers make a money, vehicle owners are pleased, drivers are employed, and bankers and insurers are delighted.
The minister with responsibility for transportation once said he believed in the power of the market. Perhaps his colleague, the minister of finance, will explain market failure to him. But, it may be much more. It is a failure of policy, and a failure of ideology, and of vision. But the Government will not admit it. It prefers the trite explanation of indiscipline and “personal irresponsibility”. We are being told that what we need are law and order. Taxi and bus drivers must clean up their act before any fare increase, it is being suggested.
Meanwhile, taxi operators, who it is said are providing the subsidy that the Government fails to in order to better meet the demands of its creditors, are clamouring for a fare increase. Enter Uber and the competition has tightened. But the Government is in a deep dark hole of policy failure. Any massive increase in bus and taxi fares will bring undue additional hardships on poor people, cause the “independent” Bank of Jamaica (BOJ) to miss its inflation target, be damaging to the economy, could result in social unrest, and could be politically disastrous. Taxi drivers knowing that badness pays are flexing their muscles.
Our leaders are not convinced of the critical value of an efficient, dependable, and affordable public transportation system to Jamaica's development. The minister's plan for JUTC involves little more than a set of cost-saving measures. The IDB's five-year (2016-2021) country strategy for Jamaica failed to address the public transport infrastructure needs of the country. The IDB will continue, myopically, to restrict its investment loans to the priority areas agreed between it and the Jamaican authorities, such as targeted and significant debt reduction through “substantial fiscal over-performance”. It is not expected to rid itself of its obsession with fiscal sustainability, or abandon its ideologically blinkered view concerning “fiscally neutral” public investments, and overcome its phobia of reforms that “could worsen the fiscal balance even though they may be growth and productivity-enhancing”.
These pandemic days, many in the Washington are talking about inequality and the social unrest which it can engender. The IDB has it in its power to do something about it. It should start with helping Jamaica to design, finance, and build an efficient, dependable, and affordable public transportation system. The Government and the Opposition should commit themselves to the task. But, will they?
Audley Rodriques has served as Jamaican ambassador to South Africa, Kuwait, and Venezuela. Send comments to the Jamaica Observer or email@example.com
Now you can read the Jamaica Observer ePaper anytime, anywhere. The Jamaica Observer ePaper is available to you at home or at work, and is the same edition as the printed copy available at https://bit.ly/epaper-login