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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.


Latin America with a Huge Deficit in Infrastructure Investment, says ECLAC

Wednesday, October 15, 2014 > 09:18:39


Argentina should double its current investment in infrastructure and spend 6.2% of its Gross Domestic Product to satisfy its demands for the period 2012-2020, according to a report of the UN Economic Commission for Latin America and the Caribbean (ECLAC).

The country ranks 9th out of 15 in the region and spends 2.89% of its GDP on infrastructure, a figure which would have to be doubled to reach the ECLAC’s goal.

Nevertheless, no country of the region reached such objectives as the regional average of infrastructure investment was set in 2012 at 3.4% of GDP.

“The commission stresses that countries must examine the patterns in their investment decisions to orient them towards new infrastructures which reinforce the path to equality, with sustainability and inclusion,” the report concluded.

Costa Rica headed the ranking of infrastructure investment by using 5.4% of its GDP, followed by Uruguay (5.08%), Nicaragua (4.93%), Bolivia (4.47%), Peru (4.46%), Brazil (4.1%), Mexico (3.32%), Panama (3.32%) and Argentina.

Meanwhile, investing less than Argentina were Chile (2.83%), Colombia (2.45%), El Salvador (2.3%), Ecuador (1.58%), Guatemala (1.55%) and Paraguay (1.51%).

ECLAC estimated every country should spend 6.2% of its GDP on infrastructure by steering investment towards expected infrastructure needs and assuming that the historic pattern of country investments will be repeated. Nevertheless, “it’s an approximation and not a strict recommendation,” the report said.

In the last decade, the region has spent 2.7% of its GDP on infrastructure, a figure which shows “the region isn’t investing enough.” The study said that an adequate response to requirements in this field is key to the region’s insertion in the global economy and to the quality of life of its people.

Nevertheless, looking at the figures of the report, an increasing investment into infrastructure can be seen as countries are now spending 3.4%, instead of the 2.7% of the previous decade. The transport sector has drawn the biggest amount of investment since 2005, followed by energy, telecommunications, and water and sanitation.

“Investment in infrastructure projects contributes to increasing the coverage and quality of public services and reduces the costs associated with mobility and logistics,” said the report.

“This in turn improves the access to markets of goods, services, employment and financing, providing a favorable environment for improvements in the population’s overall well-being.”

In the report, ECLAC unveiled the Economic Infrastructure Investment in Latin America and the Caribbean Database 1980-2012, which collects and systematizes figures by country and investment origin (public or private) and updates the annual investment requirements in four main economic infrastructure sectors (transportation, energy, telecommunications, and water and sanitation) to respond to the needs that will arise from the region's companies and end users in that same period.

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