IDB: Latin America needs to double its infrastructure investment
Panama City, Mar 16 (EFE).- Latin American and Caribbean countries must double their infrastructure investment to bridge the existing divide with other developing nations and remedy the region’s “historical backlog,” the president of the Inter-American Development Bank (IDB) said here Thursday at the start of that organization’s annual meeting.
“We must at least double our level of investment in infrastructure,” Israeli-born Brazilian economist Ilan Goldfajn said at the inauguration of a series of seminars on the region’s priorities, a prelude to the Special Governors Meeting that will take place this weekend.
According to IDB figures, Latin America and Caribbean countries have invested less in infrastructure (1.8 percent of gross domestic product) than other developing regions in recent decades and less than half the amount spent by emerging economies in Asia.
The development bank therefore estimates that the region needs to invest at least 3.12 percent of GDP over the next 10 years to meet the Sustainable Development Goals (SDGs) established in 2015 by the United Nations General Assembly.
Infrastructure will be one of the topics addressed on Thursday and Friday at different seminars, one of which will focus on the need for greater investment in “sustainable physical and digital infrastructure” with a focus on “regional integration,” Goldfajn said.
“We need to expand and upgrade our physical and digital infrastructure. And the digital is very important to cut … trade costs, transportation costs, but also to be able to provide our citizens services that they rightfully (have been clamoring for) in the last few years,” he added.
The IDB estimates that only two-fifths of homes in the region have Internet access and only two-thirds of the population have access to mobile broadband.
Latin America and the Caribbean face “a historical backlog” in terms of infrastructure, which is lacking in both quantity and quality, the economist said.
More than 50 percent of the region’s population (over 300 million people) lack access to potable water and safe sanitation and 20 percent of the primary paved road network is in poor condition, figures that are double those of developed countries.
The former head of Brazil’s Central Bank also stressed the need to invest in climate-resilient infrastructure, “especially in countries exposed to tropical storms, tsunamis, earthquakes, natural disasters in general.”
The pace of both public and private infrastructure investment in the Latin America and the Caribbean region had already slowed prior to the onset of the Covid-19 pandemic, a decline that coincided with the end of the commodities boom and has continued to the present day.
Low investment in infrastructure hinders the region’s competitiveness and will make the objective of meeting the SDGs by 2030 a daunting challenge, the IDB said.
It also says urgent legal reforms are needed to ensure the institutional capacity exists to promote private investment.
EFE
pem/mc
