April 3, 2025, 11:06 am

Addressing the Economic Cost of Traffic Congestion

  • Update Time : Friday, March 21, 2025
  • 75 Time View
Photo: Collected


—Dr. Mohammad Kamrul Hasan—



Traffic congestion in Bangladesh, particularly in the capital city of Dhaka, poses a considerable challenge for urban development. The interplay of swift urbanization, inadequate infrastructure, and ineffective traffic management has led to congestion that has reached critical levels. This situation not only hampers the daily lives of residents but also has far-reaching economic implications, as it affects productivity and increases transportation costs. Besides, the social consequences are profound. Alongside, the high levels of congestion exacerbate pollution and thereby impacting public health and the overall sustainability of the urban environment. Addressing these issues is essential for fostering a more efficient and liveable urban landscape in Dhaka and beyond.

One of the most immediate costs of traffic congestion is the economic loss due to time wasted in transit. According to a study by the Accident Research Institute (ARI) of Bangladesh University of Engineering and Technology (BUET), Dhaka’s traffic congestion leads to an annual economic loss of Tk 370 billion to Tk 550 billion (approximately USD 3.5 billion to USD 5.2 billion). The average speed of vehicles in Dhaka has plummeted to approximately 5 km/h, down from 21 km/h a decade ago. As a result, an estimated 5 million work hours are wasted daily, reducing economic output. The World Bank estimates that traffic congestion in Dhaka decreases GDP growth potential by around 6% annually. However, Dhaka is not a stand-alone example rather before implementing the MRT system, Jakarta lost USD 6.5 billion annually due to congestion. The introduction of a Mass Rapid Transit (MRT) system and ride-sharing incentives significantly reduced traffic congestion. In addition, traffic congestion increases fuel consumption by nearly 40%, leading to an estimated daily loss of Tk 41.5 million (approximately USD 390,000) due to unnecessary idling and stop-and-go driving. As a result, the increased demand for fuel adds to the country’s import burden, exacerbating trade deficits.

Moreover, traffic congestion poses significant environmental and health challenges, thereby elevating its opportunity cost. The prolonged idling of vehicles leads to increased emissions of carbon dioxide (CO2), nitrogen oxides (NOx), and particulate matter (PM2.5), which deteriorates air quality. According to a 2022 report from the Department of Environment (DoE), the air pollution in Dhaka, intensified by traffic congestion, is linked to around 15,000 premature deaths each year. The healthcare expenses associated with respiratory diseases, cardiovascular issues, and mental health disorders resulting from long-term exposure to polluted air are substantial. Alongside, the elevated noise levels in Dhaka, driven by incessant honking and traffic jams, contribute to heightened stress, anxiety, and hearing loss. Research indicates that individuals who endure lengthy commutes in congested traffic experience higher rates of stress-related health problems, which ultimately diminishes their overall productivity.

In addition to the financial and ecological consequences, traffic congestion has a detrimental effect on social welfare and the overall quality of life. Extended commuting times disrupt the delicate balance between work and personal life, reducing the time individuals can dedicate to family interactions, educational activities, and recreational pursuits. Parents facing prolonged traffic delays often find themselves with insufficient time for childcare responsibilities, which can negatively impact family cohesion and overall health. Moreover, this situation adversely affects business productivity. Delays in deliveries, erratic supply chains, and escalating transportation costs undermine operational efficiency, leading to reduced profit margins and increased prices for consumers. Small businesses, in particular, are disproportionately affected by rising logistics expenses and the decline in customer satisfaction that results from these delays.

Given the significant implications of traffic congestion, both immediate and long-term measures are essential to mitigate its associated opportunity costs. Enhancing the Public Transport system is of utmost importance. The expansion of metro rail and bus rapid transit (BRT) systems can help decrease reliance on private vehicles. Besides, the establishment of dedicated bus lanes and improved scheduling for public transport can significantly boost efficiency. In addition, decentralization and Smart City Planning are imperative. Relocating administrative and commercial centres outside of Dhaka can alleviate urban density and traffic congestion. Developing self-sufficient satellite cities, such as Purbachal and Kaliakair Hi-Tech Park, can serve as a model for distributing urban density.  Moreover, the implementation of intelligent traffic management systems utilizing AI and IoT can optimize vehicle flow. Bangladesh could benefit from adaptive traffic lights that respond to real-time congestion data, as well as AI-Powered Traffic Monitoring to enhance road usage and identify bottlenecks. For instance, in Stockholm, AI-based traffic lights achieved a 20% reduction in congestion within a year. Additionally, introducing congestion pricing and smart toll systems can deter unnecessary vehicle usage. Enforcing stricter traffic regulations and curbing unauthorized parking and street vending can also play a crucial role. Moreover, promoting hybrid work models among companies can yield positive results. For example, in Silicon Valley, the introduction of hybrid work arrangements in tech firms led to a 35% reduction in peak-hour traffic.

It is highly recommended to investigate and adopt global best practices. Numerous international examples can provide valuable frameworks for Bangladesh to consider. For instance, Singapore successfully tackled traffic congestion by implementing strict vehicle quotas, developing an exceptional public transportation system, and employing electronic road pricing (ERP). These measures not only reduced traffic density but also maintained high levels of economic productivity. In a similar vein, Tokyo has effectively mitigated congestion through the establishment of a rail-based mass transit system, the integration of intelligent traffic intersections, and the creation of dedicated lanes for buses and emergency vehicles, which collectively contribute to a reduction in unnecessary fuel consumption. Additionally, Seoul has developed a sophisticated logistics network that features freight-only roadways, underground cargo transport systems, and real-time traffic monitoring capabilities, significantly improving the efficiency of its supply chain operations.

The opportunity cost of traffic congestion in Bangladesh is staggering, affecting economic productivity, environmental sustainability, and social well-being. Addressing this crisis requires a multi-faceted approach. Without strategic interventions, the economic losses and deteriorating quality of life will continue to rise, hindering Bangladesh’s development trajectory.

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The writer is a public administration and public policy researcher

 

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