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Road improvements funded by CAF have expanded access to labor, input and output markets, potentially increasing job opportunities, production, and incomes.
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Today, Latin America’s road network is approximately 3.6 million kilometers (2.2 million miles) long, and supports almost half of intraregional trade, and 2% of trade with other regions of the world. This road network also facilitates transport of people to labor markets and public services.
However, existing road infrastructure in Latin America and the Caribbean shows significant lags, both in quantity and quality. The region has 188 km of roads per 1,000 km2, which is only 13% of the OECD average. Only one-sixth of this infrastructure is paved and permanently passable. Of the total rural population, around 40 per cent live in remote locations without access to a land transport network, which means they have limited access to healthcare or education services. Furthermore, a third of companies in Latin America believe that transport infrastructure is a barrier to productivity growth.
CAF is strongly committed to road investment in LAC countries:
Contribution in numbers
CAF’s action has been crucial to reduce transportation costs in beneficiary areas and thus expand access to markets for households and businesses.
Evidence shows that the improved access to markets enabled by CAF’s road investment, may have raised job opportunities and production levels, thanks to a greater availability of inputs, logistics services and new buyers.
According to evaluations on road expansions and improvements in Peru and Mexico, CAF’s investment may have created around 5% more job opportunities in the beneficiary areas.
The productive structure may also have changed thanks to CAF’s road investment, leading in some cases to greater specialization and productive agglomerations, with all the benefits that this entails in terms of production and competitiveness. This could result in more exports by the beneficiary regions, as well as in a growth of their economies.
Lastly, CAF’s road investment may have helped improve living conditions in rural areas, as families—in addition to receiving higher incomes—have greater access to basic goods and services such as education and healthcare.
Highlights
Latin America’s road network covers approximately 3.6 million kilometers, and supports almost half of intraregional trade, and 2% of trade with other regions of the world
40% of LAC’s rural population lives in remote locations with no access to a land transportation network
CAF has funded almost 60 road projects for approximately of USD 5 billion in the last five years
The higher number of jobs created by CAF’s investment in inter-city roads may have been in the order of 5%, as learned from two road expansion studies in Peru and Mexico.
