Infrastructure investment in Latin America and the Caribbean (LAC) Total investment in infrastructure (both public and private) fell from 3.7 percent of GDP in 1980-1985 to an average of 2.2 percent in 1996-2001.
Public investments in the sector dropped from 3.1 percent of GDP for 1980-1985 to 0.8 percent of GDP for 1996-2001 in Argentina, Brazil, Colombia, Chile, Mexico, Peru and Bolivia.
Public expenditure on infrastructure represents approximately 5 percent of total public expenditure in the region.
Private investment. LAC attracted almost half of the $786 billion in infrastructure projects with private investment in developing countries between 1990 and 2003, but 93 percent was concentrated in only six countries (Argentina, Brazil, Chile, Colombia and Peru and Mexico), and mainly on telecoms and energy sectors.
Bringing LAC to higher levels
Annual expenditures of about 3 percent of GDP should suffice to respond to expected growth in demand from firms and individuals, maintain existing infrastructure and achieve universal service for water, sanitation and electricity over 10 years.
For LAC to reach productive infrastructure coverage levels similar to Korea's would require annual investments of 4 percent and 6 percent of GDP per annum over the next 20 years (Annex, Table 9).
Coverage of infrastructure services
Coverage and quality have improved for most infrastructure services over the last decade, but gaps remain. LAC has now fallen behind in areas such as electricity, roads and fixed telephones, with only cellular telephony and access to safe water and sanitation facilities performing relatively well compared to other middle income countries. Coverage is lower in rural areas and large gaps between urban and rural remain: in Brazil, urban sanitation access is 83 percent, but just 35 percent in rural areas; and in Mexico the corresponding levels are 90 percent and 39 percent (Annex Table 5). Water and Sanitation
In access to safe water, LAC surpasses the middle-income average, as well as China, with poorer nations making the greatest gains in the 1990s. Access increased from 82 percent of the population in 1990 to 89 percent in 2002. Likewise, access to improved sanitation facilities rose from 68 percent in 1990 to 74 percent in 2002. Telecommunications
If mobile and fixed lines are added together, LAC has 416 lines per 1,000 people --above middle-income countries (403). The quality of fixed telephone service has also improved more dramatically. Between 1992 and 2001, the number of faults reported per 100 lines fell from 60 to 4.7 in LAC, against a drop from 58 to 25 in middle-income countries, and 12.5 to 1.2 in Korea (Annex Figure 3). Internet use has spread fast in LAC, but growth has slowed relative to middle-income countries since 2002. In LAC in 2003, there were 106 users per 1,000 people compared to 116 in middle-income countries, 63 in China, and 610 in Korea. Within the region, the range stretched from 21 in Paraguay and 81 in Haiti to 272 in Chile (Annex Figure 5). Energy
The region has slipped behind middle-income countries in energy generation capacity since the 1990s, while the gap with East Asia has widened considerably (Annex Figure 6). Transport
Less than a third of the national road network is in good condition in most LAC countries, except for the case of Argentina (80 percent) and Guatemala (75 percent). Conditions are even worse for the rural and local roads, with only 8 percent in good condition in Peru and Ecuador. Â |
RSS