Transitions

Automobile overdose in Caracas

As you drive out of Caracas International Airport, one of the first things you see as your car starts up the Coastal Range into the city is an abandoned toll booth. Hard as it is to believe, there was a time when the rickety, 60-year-old highway linking the capital to the coast and its airport ...

THOMAS COEX/AFP/Getty Images
THOMAS COEX/AFP/Getty Images

As you drive out of Caracas International Airport, one of the first things you see as your car starts up the Coastal Range into the city is an abandoned toll booth. Hard as it is to believe, there was a time when the rickety, 60-year-old highway linking the capital to the coast and its airport actually charged a toll.

The idea that Venezuelans would have to pay for their inherent right to drive their cars was deemed as nonsense by the Chávez administration, and was abandoned not long after the new president took power. It’s a shame, because if there is one thing this country needs, it’s some sort of congestion pricing.

Caracas does not top the ranks of the world’s worst cities for traffic. That dubious honor usually goes to cities like Moscow, Mexico City, Sao Paulo, or Beijing. Yet if there is one thing the inhabitants of this polarized metropolis can agree on, it’s that traffic is nerve-wracking.

The reasons are many. Venezuela has the cheapest gasoline in the world. A gallon of gas sells for $0.08. By comparison, gas in Saudi Arabia — another top oil producer with a penchant for crazy subsidies — costs almost eight times that amount.

Then there’s the fact that automobile imports are subsidized at a below-market exchange rate. Combine that with a government that continually turns on the spigot of public spending in order to win elections, and the result is that car sales in Venezuela have soared in the last few years.

But spending on infrastructure for those cars has not kept up. According to economists Daniel Raguá and Marilyn González, Caracas has 365 cars per kilometer of road. To put this number into perspective, Hong Kong has 254 vehicles per kilometer, while Singapore has 232. Caracas, located in a narrow valley, is crossed by a few highways, the last of which was built in the 1970s.

Crucially, the city’s urban thoroughfares are a must if you are traveling from the western to the eastern parts of the country. It’s as if all traffic going from Baltimore to Boston had to go through Times Square. That is more or less the situation Caracas’s inhabitants must face each day.

How costly is this for caraqueños? According to Raguá and González, the cost from the time delays caused by traffic and the opportunity cost from the extra gasoline consumed cost roughly US$1.1 billion per year, or 0.4 percent of Venezuela’s GDP. Easing the city’s traffic — be it via building additional subway lines, eliminating expensive gasoline subsidies, or building more infrastructure — would cost a fraction of that figure.

There are many things this number doesn’t capture. One of the most important ones is the effect traffic has on current and future productivity.

On a recent trip, my taxi driver began chatting with me about his troubled family situation, telling me how he barely sees his children and how they get up at 5 a.m. to be able to get to school in time. Not surprisingly, his kids are not doing well at school and are not getting the education their nation needs them to get in order to increase productivity in the medium term.

In spite of this dire situation, Caracas’s inhabitants have gotten used to life in traffic. Street vendors take advantage of the perennial rush hour to hawk everything from groceries to pirated DVDs to even, gulp, beer. And while many complain, they haven’t really reached a consensus on what needs to be done. As a relative said to me on a recent trip after I suggested getting rid of gasoline subsidies: "Cheap gas is the only benefit we have from living in an oil-rich country like ours, so why would they take that away from us?"

It’s all part of the daily routine in Venezuela’s capital city.

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