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The Gains from Good Transport System

Meandering the majestic hill-slopes,painted with rivulets and rillson the canvasses of awe-inspiring vales and knolls, the friendly fresh breeze at its best, it is supposed to be a soul-enriching ride. Alas! Thanks to the road conditions, it is certainly not anenjoyable drive where one wishes if the destination never reaches. Welcome to Nagaland!

 

Tumbenthung Humtsoe,
Hyderabad Central University
The following is an attempt to sketch what we stand to benefit from improved transportation system.

 

Transport and Economic Gains:
From the standpoint of those using the transport system(say, general commuters for work, education, social commitment, etc.; and firms for business trips, etc.), a key aspect is the cost of using the transport system-monetary and non-monetary costs. While monetary costs include fares, tolls,fuel and other vehicle operating costs, and so on, non-monetary costsmainlyincludethe quantum of time incurred on a journey, and the quality, i.e., reliability and comfort level of travel. Thus, any improvement in the transportation systemis bound to cause reduction in these costs to the benefit of all transport users, that is, all of us.

 

With better roads and increased road connectivity, people can make longer but still faster trips, and hence people can take advantage of new opportunities-jobs or markets that would have been previously too difficult for them to access.Besides, there will be swifter movement of goods from abundant areas to areas of scarcity.The prices of such goods will be leveled in different parts of the states.And one positive outcome of this is that the welfare of those currently buying at higher prices and those selling at lower prices will be enhanced. All these will spur economic development, and failure in this regard will inhibit potential growth. Sadly, the present state of affairs is of the later.
Most of the Naga villages remain inaccessible even after 53 years of statehood. And onenegative fall out of this is that much of the modern day advances in various fields do not reach them.  Also, to the detriment of their living standard, they cannot reap the benefits that easy accessibility can usher in-lower prices for the goods they buy and better prices for the goods they sell. Better road connectivity can break the isolation of our villages, and particularly integrate them to the larger markets. This will thereby change their cropping patterns or economic activities in line to the comparative advantage in crops or activities that they enjoy. For instance, villagers in certain region can shift to new crops that are more suitable to their region’s micro-climatic conditions and soil, and not necessarily traditional crops, and can take them tolarger markets.

 

Incase of poor transportation system-including both road conditions and goods/passenger vehicles-as is the case today, the transportation costs (both monetary and non-monetary)are high, and hence the farmers cannot earn much profit, for the simple fact that the farmers have to deduct higher amount from their sales as logistic costs. Worse still, faced with the influx of say vegetables from other states, and given the fact that typical customers will choose to go for cheaper options, farmers have to fix competitive prices, but the catch is they can’t because their base price is pushed up by higher logistic costs. Thus, high proportion of transportation costin the total costs (and of course, unabated taxation and illegal cartel) will contribute in repeating the episode such as cabbage for freein Dimapur, reported in the local media (16th July, 2015) because of no takers. Also, for instance, the planters of rubber are reportedly prone to risks of falling price tendency. One way to keep their profitability and in many cases, livelihood intact is to reduce transportation costs. The point Iam trying to illustrate is basically what Paul Krugman, one of the leading economists emphasizedin some of his works that ‘by reducing the cost of transporting goods between locations, which decreases the effective distance between two points, transport improvements can promote trade, increase competition and variety, and facilitate specialization in economic activities.’

 

Likewise, for business users of transport, poor transportation tends to raise the price at which they can supply goods to the market. While on the contrary, an improvement in transport system, which leads to a fall in logistic costs, tends to lower the price. And to the extent that these reduction/rise in transport costs are passed on to the consumers, the impact of changes in the cost of transport is felt by the purchaser of the final goods and services for which transport is an input. This is certainly one reason why MRP is never Maximum Retail Price but Minimum Retail Price in Nagaland, especially in far-flung areas.

 

There are reasons of economic infeasibility as to why industries cannot come in all regions. For weight losing manufacturing process like mining (the impurities gangue are removed from ores thereby losing weight), it is economical to set up plants near raw material sources, and that explains why iron and steel plants are located commonly in resource rich Chota Nagpur region of India. For weight gaining manufacturing process like food processing, it is economical to locate near markets. All these are done to reduce logistic costs. In the event of lack of proper transport system, this strategic move is not possible, and hence industries usually shy away. The case in point is the lack of outside investments in industries in our state, of course, the current political imbroglio is certainly one major reason. Coming to our state, Dimapur is a better industrial location choice for topographical and wider market accessibility reasons. Now, for industries located in Dimapur (say, agro based industries)to get timely raw materials from different parts of the state, thereby also to ‘trickle down’ the benefits of such industries (say to farmers producing raw materials), proper road connectivity is crucial.

 

Transport and Social Gains:
At a time when Nagas are at a cross road and the need for unity is felt never like before, the importance of making the whole of Naga areas as one village is of pressing need. When Jose Ramos, the president of East Timor, visited a remote village to promote peace, the villagers told him: “Mr. President, we really like your road to peace, but we prefer a road to our village.” Proper road network will facilitate in bringing people from different parts of the state on a larger scale, facilitating more economic, social and cultural interactions. And this will help in broadening our cultural identity, thereby furthering Naga identity at the expense of tribalism.

 

As remote as it may seem, better roads can contribute in reducing the malady of corruption from which we are rotting. Better connectivity will help in partial reduction of the general unwillingness observed among the bureaucrats to go to far off postings. This is expected in return to reduce their meddling’s with their political bosses for transfers, and hence make them stay neutral, ideally which they are supposed tobe. This is critical because we know that bureaucratic-politician nexus is a major factor in corruption. Likewise, the same can be said of nurses, teachers and other government servants who don’t want to be posted to interior places. And when transferred, they don’t go but appoint proxies. This is expected to fall with better connectivity.One of the main, if not the main weapon against corruption is to reduce the opportunities for it to a minimum, and that’s what better roads can bring.

 

Itstill brings shiver down my spine whenever I recollect the tragedy of a woman in labour from a small Town called Bhandari. Shedeveloped birth complications, andwhile she was being transferred to the nearest big Hospital (in Wokha Town), she died on the way,only to be operated upon to separate the mother and the child in the Hospital. It still rings in my ear the choked remark of a relative that “his daughter-in-law and his grandchild would have been alive if the road had been good.” Given the resource constraint, it is not feasible to establish hospitals in every village, or multi specialty hospitals in every sub-division. However, having a good road connection can reduce this limitation, so that patients requiring special medical intervention can be transported with ease to better-equipped hospitals.

 

Way Forward:
Improvements in road transport has the potential to turn around Nagaland from a mere marketfor goods coming from outside to a market for domestic products in the short run and a producer state in the long run. It is equally crucial to note that transport is a necessary but not sufficient condition for economic development. Other institutional factors that go into making an enabling environment for business to flourish and investment to take place are also equally important. Unabated taxation and cartel stand out, those need to be addressed immediately. To that end, the endeavors of ACAUT are welcome initiatives. Likewise, a constant push through the government, organizations and individuals is critical to bend societal normsfor the better.

 

In a world where competition is ubiquitous, especially in economic domain, I find it no better to conclude but quote The World Bank’s Bi-annual Report’s (2016)title, “Connecting to Compete.” The government should rise to the occasion and make every possible effort to provide better connectivity. Failing which, our farmers, our present and future entrepreneurs, and all of us will be at the receiving end of competition.And notably, success in this will go a long way to leveragethe richnatural endowments that we are blessed with like minerals, favorable agro-climatic and soil conditions, eco-tourism prospects, educated unemployed human resource, to mention some few, for economic and social gains.

 

In the tradition of Nagaland Government, why not 2017 be declared “Year of Better Roads.” If successful, this will turn out to be a “Year for Farmers, Entrepreneurs, Youth, and every one.”
Kuknalim!

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