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Low investment restricts Latin American infrastructure

Thursday, September 8, 2016

Transport and telecoms infrastructure shortfalls are two key factors undermining Latin American competitiveness

Mexico's investment levels lag, though Central America has performed better ... but only Bolivia consistently increased the percentage of GDP spent on infrastructure for every year of the period

Source: UN Economic Commission for Latin America and the Caribbean, Inter-American Development Bank, Latin American Development Bank

Outlook

Goal 9 of the UN Sustainable Development Goals (SDG) calls for building "quality, reliable, sustainable and resilient infrastructure ... to support economic development and human well-being".

However, Latin America continues to lag in attaining the SDGs, in particular with respect to infrastructure. Despite being the world's most urbanised region, it is particularly deficient in transport and communications infrastructure, limiting trade opportunities and prompting protests over service quality. The fall in commodities prices may further curtail infrastructure investment prospects.

Brazil is a case in point. Public transport is a key source of citizen anger and the so-called 'Brazil cost' linked in part to poor cargo infrastructure reduces competitiveness and investment.

Impacts

  • Brazil's proposed 198.4-billion-dollar transport infrastructure plan, announced in 2015, has made little progress.
  • Argentina's newly announced 14.2-billion-dollar plans for passenger rail could fare little better.
  • Water-related investment is also crucial to boost the population's access, and the region's future as a global food producer.
  • Despite more 'business-friendly' governments, investors will be wary given the long-term nature of infrastructure spending.

See also