Nearshore Americas

LAC Countries Urged to Invest 6.2% of GDP on Infrastructure

Latin American countries should annually invest more than 6% of their GDP on infrastructure development to meet their economic goals, the Economic Commission for Latin America and the Caribbean (ECLAC) suggests in its latest report.

The report, prepared by ECLAC‘s Infrastructure Services Unit, focuses on telecoms, sanitation, transportation and the energy sector in the region.

The average 2.7% of GDP allotted to infrastructure in the last decade has proved insufficient, the UN agency said, adding that quality of life of cannot be improved without strong infrastructure.

In 2012, regional countries invested an average 3.49% of their GDP on the four sectors, with Costa Rica leading the pack investing by 5.7% of its GDP, followed by Uruguay (5.08%), Nicaragua (4.93%), Bolivia (4.47%), Peru (4.46%) and Brazil (4.10%).

The countries investing the smallest amount of their GDP on infrastructure include Argentina (2.89%), Chile (2.83%), Colombia (2.45%), El Salvador (2.3%), Ecuador (1.58%), Guatemala (1.55%) and Paraguay (1.51%).

Of these sectors, transportation has drawn the most investment since 2005, followed by energy, telecommunications, and water and sanitation.

“Investment in infrastructure projects increases quality of public services (for example, health, education and recreation) and reduces the costs associated with mobility and logistics, which in turn improves access to markets of goods, services, employment and financing, providing a favorable environment for improvements in the population’s overall well-being,” the report stated.

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Therefore, the commission stresses that countries must examine the patterns in their investment decisions to orient them toward new infrastructures that reinforce the path to equality, with sustainability and inclusion.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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