South American Infrastructure ministers defined plan to stimulate integration

The executive president & CEO of CAF, Enrique García, will also be present at the meeting, which will have a high integrationist content, in his role as coordinator and spokesman for the Technical Coordinating Committee (TCC) formed by the IDB and Fonplata. In September last year, the South American presidents gave these organizations a mandate to move the project forward. The meeting will be formally closed by the president of Bolivia, Hugo Banzer.

The Andean Development Corporation is committed to this ambitious program, which fully responds to its mission of promoting sustainable development and regional integration. The president of the CAF, Enrique García, explained that the physical integration of South America is indispensable for improving the competitiveness of the countries of the region, for hemispheric integration and for the competitive and balanced integration of South America into the world economy.

The Executive Steering Committee is a coordination mechanism at the highest level whose function is to define the strategic guidelines and policies of the Plan for Regional Infrastructure Integration, which envisages a competitive logistical platform (an integrated network of rail, waterways, roads, telecommunications and power) for South America within ten years. The platform will be the foundation for an integrated regional market and an increasing share of world trade for the region.

The Action Plan for the Regional Infrastructure Integration of South America is the result from a political decision by South American presidents meeting in Brazil in September 2000. A technical study prepared by the Inter-American Development Bank, the Andean Development Corporation and the Financial Fund for the Development of the River Plate Basin (Fondo Financiero para el Desarrollo de la Cuenca del Plata, FONPLATA) defined 12 integration and development hubs - each with its own road, power and telecommunications system - designed to promote effective continental integration. The hubs will be developed with respect for the region’s environmental resources and as a contribution to social development.

The agenda of the Santa Cruz meeting is to define the work plan for the first three hubs. The Andean Hub is a corridor stretching from Caracas to La Paz through Colombia, Ecuador and Peru, creating a network of investment in transport, power and telecommunications. The Brazil-Bolivia-Peru-Chile Hub is the linchpin between the Andean Community and Mercosur blocs and includes the ports of Ilo and Matarani (Peru), Iquique and Arica (Chile) and Santos and Sepetiba (Brazil). This hub is connected by good roads on Brazilian territory to the border with Bolivia, where the Santa Cruz-Puerto Suárez section has yet to be built to complete the link. The Mercosur Hub is a corridor of great economic importance linking Chile, Argentina, Uruguay and Brazil.

The success of these integration and development hubs depends on the adoption by the governments of the region of complementary measures such as simplified customs procedures, development of multi-modal transport systems (road, rail and river), provision of services (trains, warehouses, ports), as well as attracting investments in telecommunications and transport.

The idea is to generate a highly coordinated planning process which gives priority to projects with high impact and feasibility. The physical integration of South America needs a large volume of resources, which is why the efforts of multilateral organizations such as IDB, CAF and Fonplata are required, along with financial organizations such as the World Bank and the IFC, private banks and capital markets. The private sector is also expected to participate through concessions, joint ventures with state companies, and direct investments in the areas of energy and telecommunications.

The role of the Andean Development Corporation is to provide technical assistance to governments to facilitate the process of project identification, and to grant financing to public and private sectors for the execution of projects that contribute to the linking of South American and multilateral markets in conjunction with international banks as a means of multiplying the volume of resources available for investments in the infrastructure sector.