A recent publication by the Inter-American Development Bank (IDB), entitled Sustainable infrastructure for competitiveness and inclusive growth, reveals that as the population and economies of Latin America and the Caribbean grow, demand for adequate infrastructure also increases. At the same time, the report warns that it is necessary to attend to the challenges facing our region over time: rapid urbanization, increasingly universal access to basic services (water, electricity and sanitation), regional and global integration, and climate change adaptation and mitigation, among other factors.

For these reasons, one of the five priorities established in the IDB’s Ninth General Capital Increase (GCI-9) is to accompany countries in the region in the process of adopting a new vision, in which infrastructure is planned, built and maintained in order to provide services of the quality necessary to promote sustainable and inclusive growth.

While the region has made important progress in infrastructure, universal access continues to be a pending concern. For example, the IDB explains that in 2010 more than 38 million people did not have access to electricity, 32 million did not have access to sources of improved potable water, and 120 million did not have access to improved sanitation services. In order to address these needs, the region requires more and better investment in infrastructure.

Economic losses from power outages reached US$68 billion in 2012

Infrastructure services play a central role in the social inclusion and quality of life of the population, but they also have an important impact on economic performance and productivity. For example, the IDB details that economic losses from power outages reached US$68 billion in 2012. Similar losses were caused by scarcity and interruptions in water services, while losses due to breakage or damage to merchandise during transport exceeded US$70 billion in 2012.

In order for regional infrastructure to reach international standards, the IDB indicates that investments should increase by at least 2% of Gross Domestic Product (GDP) over a prolonged period of time. This would be the equivalent of an increase from US$150 billion to US$250 billion per year. Doing this would represent an enormous fiscal challenge for governments and necessitate massive participation by the private sector.