GORDON WILMSMEIEREconomic Affairs OfficerInfrastructure Services Unit (ISU)Natural Resources and Infrastructure Division (NRID)

VIII CIRIAS , November 17th 2011, Porto Alegre, Brazil

Structure

1. Infrastructure and development

2. Investments and gaps

3. Infrastructure regional integration

4. Challenges and cooperation opportunities

Global experience, both theoretically and empirically analyzed, gives valuable results regarding the positive relationship between the

Transport infrastructure and development

provision of infrastructure and economic and social development. Although in the past several questions were raised about the forms of

measurement and empirical results, it is now recognized that a positive relationship exists, and that the presence of infrastructure improvements helps in explaining growth differentials among regions or countries.

The services provided based on this infrastructure complement that relationship,

Improved infrastructure services depend, among other factors, on appropriate conditions of physical infrastructure supply, thus both supporting improvements in productivity and competitiveness of a country or region, and contributing to economic growth.

In the current design, we can no longer consider infrastructure and services in a separate manner, as it was traditionally.

infrastructure services play a key role in the economic and social development.

Infrastructure services effects

Economic Growth Infrastructure services increase productivity / reduce production

costs Inequality and poverty Access to infrastructure services (including transport) has more

positive effect on income and welfare of the poorest segments. Public services and universal access.

Better access to markets (e.g. work place)Improving human capital

directly (access to safe water, sanitation) indirectly (transportation to school, hospital, entertainment,

etc.).

Infrastructure stock and economic development

AGO

ARE

ARG

AUSAUT

BDI

BEL

BENBFABGD BGR

BHR

BLR

BOL

BRA

BWA

CAF

CAN

CHE

CHL

CHN

CIVCMRCOG

COLCRI

CYP

CZEDEUDNK

DOM

DZAECU

EGYESP

ESTETH

FINFRA

GAB

GBR

GHA

GIN

GMBGNB

GRC

GTM

HKG

HND

HRVHTI

HUNIDNIND

IRL

IRN

IRQ

ISLISRITA

JAM

JOR

JPN

KAZKEN

KGZ

KOR

LBY

LKA

LTU

LUXLVAMAR

MDG

MEX

MLT

MRTMWI

MYS

NER

NGA

NIC

NLD

NOR

NPL NZL

OMN

PAK PAN

PER

PHL

POL

PRT

PRY

QAT

ROM

RUS

RWA

SAU

SDN

SEN

SGP

SLE

SLVSVK

SVNSWESYR

TCDTGO

THA

TTOTUN

TUR

TWN

TZA

UGA

UKR

URY

USA

VENYEM

YSR

ZAF

ZAR

ZMBZWE

-4

-3

-2

-1

0

1

2

3

4

5

6

7

-4 -3 -2 -1 0 1 2 3 4

Infrastructure Stock Index (WB)

Gro

wth

of

rea

l G

DP

(%

)

Infrastructure stock and income inequality

ZWE

ZMBZAF

YSR

VEN

USA

URY

UKR

UGATZA

TWN

TUR

TUN

TTOTHA

SWE

SVN

SVK

SLV

SLE

SGP

SEN

RWA RUSROM

PRY

PRT

POL

PHL

PER

PAN

PAK

NZL

NPL

NOR

NLD

NICNGA

NER

MYS

MRT

MEX

MDG

MAR

LVA

LUX

LTU

LKA

KORKGZ

KEN

KAZ JPN

JOR

JAM

ITA

ISR

IRQ

IRN

IRL

INDIDN

HUNHRV

HND

HKG

GTM

GRC

GNB

GIN

GHA

GBR

FRA

FIN

ETH

EST

ESP

EGY

ECU

DZA

DOM

DNKDEU

CZECYP

CRI

COL

CIV

CHN

CHL

CHECAN

BWA

BRA

BOL

BLR

BGR

BGD

BFA

BELAUT

AUS

ARG

20.0

25.0

30.0

35.0

40.0

45.0

50.0

55.0

60.0

65.0

-4 -3 -2 -1 0 1 2 3

Infrastructure Stock Index (WB)

Gin

i C

oe

ffic

ien

t

Source: Luis Servén 2008

the relationship between quality of infrastructure and real GDP per capita

and the inequality of income distributionexhibits similar impacts

Infrastructure, development and equity

Infrastructure, development and equity – GDP per capita and logistics performance - 2009

Diagnosis and major infrastructure challenges in LAC

Structure

1. Infrastructure and development

2. Investments and gaps

3. Infrastructure regional integration

4. Challenges and cooperation opportunities

0

50

100

150

200

250

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

p

2010

p

Brecha Efectivo NecesarioSupply DemandGap

Source: ECLAC, 2010

Estimated transport infrastructure gap in Latin America (base year 1995 = 100)

The infrastructural gap

Required investments @5.2% of the GDP @ 7.9% of the GDP

Closing gap?Currently LAC invests 2 - 2.5% of GDP in infrastructure

Logistics performance gapLogistics performance index: (1=low to 5=high)

Infrastructure, development and equity –GDP per capita and Logistics Performance - 2009

NRID/ISU - Main studies

1. World experiences on integrated policies Developed and developing economies Sub-national cases

2. LA: Public policies for and infrastructure services 13 LA countries European Union Esp. Spain

3. Infrastructure investment gaps

4. LA: Infrastructure diagnosis

NRID / ISU principal investigation themes

Time for Equality and economic and social development: Full development Equal rights

Public policies: Comprehensive vision and approach Sustainability

Sustainable transport and infrastructure services (both long and short distances, passengers and freight): Modal shift Technical regulations (emissions, fuel, engines, etc.), reaping

the benefits of technological progress Pricing and economic regulations

NRID / ISU principal investigation themes

New equation: State‐market‐society The public sphere as a forum for collective interests and not

simply for State or national matters Political agreements for a new social and intergenerational cove

nant,  with specific responsibilities and accountability systems Consolidation of a culture of collective development based on to

lerance of difference and diversity Strategic internally defined long‐term vision

that promotes covenants between the stakeholders in production

Policies of State —not only of the current government or administration—channelled through institutions

PUBLIC POLICIES – INSTITUTIONS, MARKET & REGULATIONS

Structure

1. Infrastructure and development

2. Investments and gaps

3. Infrastructure regional integration

4. Challenges and cooperation opportunities

At least three ways of integration

1. Economic and trade integration

2. Political integration3. Physical integration4. ...

Subsector/sector Transport Energy CommunicationsNo. mill. USD No. mill. USD No. mill. USD

Air 24 2,690.3 Road 207 32,991.1 Rail 61 12,746.9 River 74 2,837.4 Maritime 31 3,391.2 Multimodal 15 439.7 Border Crossing 39 293.5 Energy Reg. Harmonization 1 380.4 Energy Generation 27 28,433.3 Energy Interconection 36 11,870.7 Comm. Interconection 9 44.7TOTAL 451 55,390.1 64 40,684.4 9 44.7

Infrastructure regional integration

Sectorial and sub-sectorial composition of the IIRSA Portfolio

(No of Projects and amount of investment in mill. USD)

15.6

66.5

4.5

20.4

12.1

0.2

64.0

21.4

95.3

0%

20%

40%

60%

80%

100%

Transport Energy Communications

% o

f tot

al in

vest

men

t

Public Private Public-Private

Source: IIRSA (2011)

YPE OF FINANCING IN IIRSA PORTFOLIO

BY TYPE AND SECTOR IN IIRSA PORTFOLIO

Regional integration. South America infrastructure finance portfolio

Structure

1. Infrastructure and development

2. Investments and gaps

3. Infrastructure regional integration

4. Challenges and cooperation opportunities

Cooperation framework: infrastructure and policies

Source: Cipoletta (2011)

GORDON WILMSMEIERUN-ECLACGordon.wilmsmeier@cepal.org