Infrastructure in Latin America and the Caribbean: Recent Developments and Key Challenges

Infrastructure in Latin America and the Caribbean: Recent Developments and Key Challenges

Infrastructure in Latin America and the Caribbean: Recent Developments and Key Challenges

Infrastructure in Latin America and the Caribbean: Recent Developments and Key Challenges

Synopsis

Many Latin American and Caribbean countries have spent too little on transport systems, water, sanitation, and electricity, which has hampered growth, competitiveness, and poverty reduction. Governments, overestimating the promise of private sector participation, tried to off-load too much responsibility for infrastructure financing and management, especially in the 1990s. The result has been dashed hopes, insufficient improvement in public services, and a widespread backlash against privatization. Nonetheless, progress has been made and important lessons learned.'Infrastructure in Latin America and the Caribbean' explores the extraordinary transformations that have shaped infrastructure in the region over the past 15 years. It delves into the need for appropriate and responsible investment in infrastructure; examines the crucial role that governments must play in infrastructure financing, oversight, and provision; and encourages efforts to appropriately engage the private sector. In addition, it emphasizes the need for infrastructure policy to be sensitive to the social and political context. The recommendations made will be of special interest to policy makers, academics, and infrastructure professionals and investors.

Excerpt

Coverage and quality have improved for most infrastructure services in the region, but gaps remain and ground has been lost relative to competitors. Progress in recent decades has been steady if uneven within and across sectors and countries. Coverage lags behind in rural areas and among the poor, both rural and urban. the poor also suffer more when service quality is low. and progress has not kept up with competitors: other middle-income countries, including China, and East Asia’s “miracle” economies.

Inadequate infrastructure undermines the region’s growth and competitiveness and hampers the fight against poverty, exclusion, and inequality. Infrastructure services account for a significant share of production costs: 16 percent in Colombia, for example. Although similar estimates are not available for the entire region, it is clear that better infrastructure would have huge impacts on competitiveness and growth. Infrastructure is also essential in helping the poor improve their health, quality of life, and ability to engage in productive activities. As a result infrastructure improvements significantly contribute to reducing inequality (Calderón and Servén 2004b).

Coverage and Quality Have Improved, But Slowly

Coverage for most services has improved steadily over the past two decades. Since 1985 most countries in Latin America and the Caribbean . . .

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