GEISHA KOW­LESSAR-ALON­ZO

geisha.kow­lessar@guardian.co.tt

A re­port by the In­ter-Amer­i­can De­vel­op­ment Bank (IDB) charts a course for a mas­sive in­fra­struc­ture trans­for­ma­tion in Latin Amer­i­ca and the Caribbean through gains in ef­fi­cien­cy, use of dig­i­tal tech­nolo­gies, and a fo­cus on qual­i­ty and af­ford­abil­i­ty of con­sumer ser­vices rather than struc­tures.

The IDB has al­so ad­vised that to close its in­fra­struc­ture gap, Latin Amer­i­ca and the Caribbean needs more than in­vest­ment in hard as­sets.

It needs si­mul­ta­ne­ous and de­ci­sive pol­i­cy ac­tion to im­prove ef­fi­cien­cy of the in­fra­struc­ture in­vest­ment process and reg­u­la­tion of ser­vices—re­ferred as soft­ware, the IDB said.

It added that even small im­prove­ments in ser­vice ef­fi­cien­cy by in­creas­ing dig­i­tal­i­sa­tion and oth­er ac­tions can boost growth by 5.7 per cent over a 10-year pe­ri­od.

For Latin Amer­i­ca and the Caribbean, this rep­re­sents ap­prox­i­mate­ly US$325 bil­lion in ad­di­tion­al in­come over ten years.

In­fra­struc­ture im­prove­ments will re­duce in­equal­i­ty and help vul­ner­a­ble pop­u­la­tions, es­pe­cial­ly hard hit by the COVID-19 pan­dem­ic, the IDB said.

It added the re­gion per­forms well in ba­sic mea­sures of ac­cess but poor­ly in terms of the qual­i­ty of ser­vices. For in­stance, 97 per cent of Latin Amer­i­can ur­ban house­holds have ac­cess to wa­ter but less than 40 per­cent of sewage in cities is treat­ed, the IDB not­ed.

It said the av­er­age com­mut­ing time in the re­gion’s big cities is 90 min­utes, adding that the re­gion al­so lags in In­ter­net pen­e­tra­tion and down­load speeds in Latin Amer­i­ca and the Caribbean are ten times slow­er than in OECD coun­tries.

The re­port found that as ser­vice ef­fi­cien­cy in­creas­es and prices drop, the in­comes of the poor­est peo­ple would in­crease 28 per cent on av­er­age over ten years than the in­comes of the rich.

“In­fra­struc­ture will be a crit­i­cal com­po­nent as we build our post-pan­dem­ic economies and aim to re­duce in­equal­i­ty.

“Bud­gets will be tight, so we must in­vest wise­ly and sus­tain­ably. Our re­port rec­om­mends ar­eas where gov­ern­ment poli­cies can pro­mote in­no­va­tions and bring a ser­vice-ori­ent­ed vi­sion to in­fra­struc­ture,” IDB Chief Econ­o­mist Er­ic Par­ra­do said.

The IDB ex­plained the study pro­vides an in-depth di­ag­nos­tic of ac­cess, qual­i­ty, and af­ford­abil­i­ty of in­fra­struc­ture ser­vices in the re­gion as well as ex­am­ples of reg­u­la­to­ry poli­cies that have achieved tan­gi­ble progress in ser­vice pro­vi­sion.

The or­gan­i­sa­tion said dig­i­tal­i­sa­tion will dis­rupt the pro­vi­sion of in­fra­struc­ture ser­vices and in­crease ef­fi­cien­cies.

“Our study de­vel­ops sce­nar­ios of mar­ket or­gan­i­sa­tion for the en­er­gy, trans­port and wa­ter and san­i­ta­tion sec­tors based on the ex­tent of adop­tion of dig­i­tal tech­nolo­gies.

“For the promise to be­come a re­al­i­ty a sup­port­ive reg­u­la­to­ry frame­work is need­ed to im­prove in­fra­struc­ture in sus­tain­able ways through adap­ta­tion, mit­i­ga­tion and the use of nat­ur­al in­fra­struc­ture,” the IDB said.

Agustín Aguerre, the IDB’s Man­ag­er for the In­fra­struc­ture De­part­ment said for too long  there has been fo­cus on bricks, pipes and oth­er hard as­sets, adding that dig­i­tal tech­nol­o­gy al­lows to bet­ter un­der­stand how peo­ple use  roads, con­sume elec­tric­i­ty and wa­ter.

“Our fu­ture in­fra­struc­ture will be cheap­er, more sus­tain­able and bet­ter serve our cit­i­zens,” Aguerre added.