Junk cars + gasoline price increase = more pollution & inflation

This cartoon appeared in El Diario on July 20, 2011. A car is polluting the streets and the pedestrians are covered in smog. One of them, coughing has a sign: “Higher levels of pollution, caused by junk cars used in public transport” At the bottom of the sign, on both corners the help SOS (help) and WHO (World Health Organization) are displayed.

Over a hundred thousand cars entered illegally last month and are in the process of becoming legal, per government’s desire. Current president stated that all poor people deserve to have a car. A number of those vehicles were stolen and came from surrounding countries. The crude reality is that not only our poor road/street system will experience heavier and slower traffic; but there will also be increased demand on gasoline, diesel and/or natural gas. Thus, our current import of gasoline and diesel will increase. Contraband of those fuels will also continue. And there is a high probability that there will be a shortage in the supply over the short run at least; so large lines of vehicles seeking for those fuels and the existing subsidy will continue to grow. Social unrest will slowly escalate into strikes and chaos will undermine our productivity. 

Remember that back in December 2010, this government attempted to raise the prices on fuels. This action triggered price escalation on most food items and inflation grew. Despite the government going back its steps and cancelling that increase of fuel prices, inflation augmented. Yesterday, two of the leaders from the workers’ unions from Tarija and Potosi stated on TV news programs their fear that the government will try to increase the price of the fuels again and they will oppose it. So, what do we have here… uncertainty, bad judgment, more pollution, junk and stolen cars in our streets and roads?

Probably all of the above; let us not forget higher inflation will force us to reduce some of our consumption, we will have to substitute some of our preferences and cut onto others. All of these actions are like an avalanche and most of Bolivian citizens do not see this coming, or try to close their eyes.

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