The World Bank released a report on Friday, 7 April 2017, in which it counsels governments in Latin America and the Caribbean to spend wisely, not necessarily more. The World Bank says that the region can dramatically improve its infrastructure by better assessing priorities and improving spending efficiency.
The recommendations are in the report: Rethinking Infrastructure in Latin America and the Caribbean – Spending Better to Achieve More. The report indicates that the region trails others in infrastructure investment – 3% of GDP compared to 7.7% of GDP in East Asia and Pacific.
Jorge Familiar, World Bank vice president for Latin America and the Caribbean, highlights that infrastructure investment can be a powerful engine for growth in the region. “In today’s tight fiscal context, it is essential that investments are as efficient as possible, and that the full potential of the private sector be tapped.”
The report advocates for putting in place effective ways of addressing these needs and developing clear rules for deciding when taxpayers should finance services, instead of users.
The report indicates that spending more efficiently could have enormous benefits. The report highlights that in the case of the energy sector, where transmission and distribution losses are high, LAC would need US$23 billion per year if it were to follow the same investment path of the past. Costs would at least be halved under an approach that favors efficiency, climate resiliency and renewable energy solutions.
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World Bank
10 April 2017
