1. Road Transport as Driver of Peace and Prosperity: An Economic Perspective Kenneth Button University Professor George Mason University

2. Peace and prosperity Prosperity is not a necessary condition for peace. Prosperity is not a sufficient condition for peace BUT: Prosperity can help in reducing the risk of conflict

3. Peace and prosperity Increasing evidence from economic studies indicates that relative, rather than absolute, prosperity affects perceptions of wellbeing. Conflict is more likely when there are serious variations in prosperity. Notions of “Sustainable Development” emphasize the importance of acceptable levels of social equality.

4. Causes of friction in the world Numerous but some need highlighting besides Unequal income – Lack of access to key material Nationalism Simple lack of understanding –Religion –Ideology –Migration

5. Transport and prosperity Transport facilitates economic development. In itself transport is neutral –there has to be some basis for development and transportation provides the necessary links. Simply building roads or an airport will not stimulate economic development in the absence of other necessary conditions.

6. Issues with the modal approach to transport Debates and policy tend to be mode specific but: –Most transport activities involve several modes –Transport logistics –Bringing the raw materials to a factory and taking outputs to market involve many modes –The importance of a particular mode can change over time as technology shifts or the nature of the demand for transport services changes –The notion of “modal champions” is not helpful in the long term.

7. The role of road transport A major mode in its own right for both passengers and freight. –E.g. Freight High value, low volume Short to medium distances Important as an element in multi-modal transportation. –Feeder services to other trunk modes such as shipping and air transport Essential in the “last-mile” of any trip.

8. Transport and particular forms of development Globalization allows countries to exploit their comparative advantages –Problems arise not because of free trade, which will increase total global welfare if all costs are included; but rather the politics of how this welfare is distributed Some industries and factors are more “mobile” than others –Primary products need transport to move their products for processing but their production is spatially fixed. –Tourism is highly mobile but needs transport to move people to it –Modern manufacturing needs transport to bring all of its inputs to a production site that itself can be highly flexible in its location

9. Urbanization, prosperity and roads Modern production and agriculture leads to urbanization Cities are growing –350 million more Chinese in cities by 2050 Need to handled increased population –Issues of mobility –Issues of congestion Prosperity within cities relies on interactions Roads offer flexible networks to compliment the scale of fixed systems Road systems need to be appropriately managed

10. Tourism, prosperity and road transport Tourism is a major growth industry –Up to 12% of world GDP –Major employer of labor –Key industry in many developing countries –More older people with leisure time and resources –Changing nature of tourism (shorter/longer trips) Air transport dominates much of world tourism BUT: –Road transport is needed for airport access –Road transport is used to relatively close destinations –Road transport is key to “tours” at destinations - the major value added item to a “resort” area

11. Road transport and high-technology industry High-technology industry has high-value added potential It is very “foot-loose” It requires good passenger transport facilities To retain labor it requires good local transport –Personal interactions –The concept of developing the “creative classes” Good access is needed to longer distance passenger transport

12. The other aspects of transport It allows continued social contact between migrant workers and families It allows cultural interactions It facilitates political integration –The road system tied the Roman Empire together –Large countries such as the US and Canada used transport policies to open their frontiers –The Common Transport Policy was a cornerstone of the Treat of Rome

13. Concluding thoughts Transport cannot in itself create prosperity - it can facilitate it - and prosperity does not guarantee peace More equality is likely to lead to a more peaceful world rather than prosperity per se. Appropriate use and investment in transport - be it road or any other mode can help in equalization prosperity through trade and person mobility Road transport has a key role to play in this in terms of particular industries and types of movement. It is also a facilitator in its own right for the success of other modes.