BOGOTÁ — I am one of those people who abandoned their dreams of revolution a while back, so I don't use the word lightly. And yet, here I am pushing an idea that truly is revolutionary. It's also a feasible idea, albeit a very expensive one that would require the Colombian state and local government to effectively and at the very least, bring in taxes worth 20% of the GDP, and in time 25 or 30%.
Truth be told, I didn't come up with the idea on my own. It comes from a chat group whose members place themselves at the political center. People who are neither revolutionaries nor right-wing conservatives.
Our chat group, which included the late economist and former finance minister Guillermo Perry, takes an interest in social and political problems. And in response to the unrest that began here on Nov. 21 last year, we thought of exploring ideas outside the box — ideas, in other words, that don't perpetuate the traditional timidity that tends to characterize policy decisions here but that Colombians are now rebelling against.
That's how the issue of free public transportation came up. It's a subject that has already been explored elsewhere in the world, and in our discussion, we agreed that it's important to be careful with the terminology: Rather thanto talk about "free buses" we decided that a term like Tarifa 0 (Zero Fare) would be better.
It would also seem wise, at first glance, to implement such a program first in small to mid-sized cities, not in a major capital. Except in the case of Colombia, our biggest city, Bogotá, is where agitation is most intense, and so some of us in the group changed our minds in that regard.
There's still the cost issue, however. So how much are we really talking about? A transport expert in our group gave an off-the-cuff figure of nearly $1 billion a year for Bogotá alone.
We are already paying transportation subsidies worth about $234 million, so we would have to add at least three times that amount, or roughly 0.3% of our GDP. And because the Zero Fare program would cost more per user in smaller cities given the dispersion of routes, our chatroom calculation puts the cost of the project for the entire country at about $4 billion per year, or about 1.2% of the GDP.
Would there be overflowing demand?
Subsidies are dangerous, especially when they offer a lifestyle that allows one to survive more or less without working. The transport subsidy would ease people's cashflow situation without really augmenting their revenues. Who should pay for Zero Fare? Those who benefit from our current inequality: the wealthiest sectors, but also the middle class.
Shared financing is a possibility too. Half the cost could be covered by city tolls and vehicle taxes, which would be higher for cars but substantial too for motorbikes. The other half would be paid for with general taxes. Would there be overflowing demand? Yes, though perhaps not as much as might be feared, because free or not, taking the bus is neither a sport nor entertaining.
Quality is a crucial variable here because any increase in demand would hasten the wear and tear on transport units, but even here, there is no reason why this cannot be addressed in the medium to long term. Should the public or private sector run the system? Both are possibilities, provided there is accountability, as the Anglo-Americans would say.
Operators will not mind who pays them, as long as they are paid. And quality controls can be the same, whatever the management model. The big questions are still how to finance Zero Fare transport, and which things the state would NOT do.
All of those things are open to debate, but at least let's start having a real discussion.
See more from Business / Finance here