Latin America must invest at least 5 percent per year in infrastructure to take the leap toward competitiveness
In the region, the average investment in infrastructure as a percentage of GDP was 2.8 percent between 2008 and 2015, according to the figures in A CAF, IDB, and ECLAC initiative which has the most complete data base regarding investments in sectors such as water and sanitation, energy, telecommunications, and transportation for 18 countries of Latin America and the Caribbean.
An increase of investments in infrastructure in Latin America will require a substantial contribution from the private sector to reach, together with the public sector, an annual 5 percent of GDP, according to the analysis carried out by CAF, Development Bank of Latin America. In past years, average investment in infrastructure ranged between 2.4 and 3.2 percent of GDP. This includes more than 30 percent of private investments and programs from public-private associations.
Although the average investment in the region is below 3 percent, there are significant differences between countries. Those that stand out for their higher investment levels are Bolivia, Honduras, Panama, and Peru, exceeding 4 percent of GDP for the period analyzed (2008-2015), according to the most recent update of the www.infralatam.info web site.
The detailed figures regarding investment in sectors such as water and sanitation, energy, telecommunications, and transportation, that enable this type of analysis, are available to the public at INFRALATAM. Its objective is to measure investments in infrastructure in the countries of Latin America and the Caribbean, report their value, disseminate the results, and promote the analysis of their impacts, in order to overcome limitations that prevent the acceleration and increase of investment processes in the region, and double the current low levels.
With its latest update, INFRALATAM adds four new countries (Belize, Guyana, Dominican Republic, and Trinidad & Tobago) to the 14 countries from Latin America and the Caribbean already participating (Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, and Peru). To date, the web site has information from 18 countries for the period 2008-2015.
INFRALATAM is a joint project from CAF, Development Bank of Latin America, the Inter-American Development Bank (IDB), and the Economic Commission for Latin America and the Caribbean (ECLAC), which annually updates the infrastructure investment figures from the countries of the region. It promotes discussion and enriches the debate regarding construction of infrastructure on the road toward sustainable development.
This data base may become the main instrument for the analysis and development of quality, reliable, sustainable, and resilient infrastructure, as stated by Objective 9 of the Sustainable Development Objectives (SDO) proposed in the 2030 Agenda for Sustainable Development approved by the United Nations in 2015. The inclusion of Objective 9 is an essential step regarding the positioning of infrastructure when seeking sustainable development, and implies greater responsibility of public policies to advance toward greater levels of quality investments required to improve the quality of life of the inhabitants of the region.
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