Don't Think of an Elephant is one of the most popular books by linguist George Lakoff. It is enough to pronounce the title to inevitably evoke the animal, even if it asks you not to. Something similar happens when talking about infrastructures: airports, bridges, dams, tunnels come to mind quickly and automatically ... In short, concrete and steel. The Inter-American Development Bank (IDB) seeks to change that link and to get the leaders of Latin America and the Caribbean to think about improving water and sanitation, electricity, and transportation when talking about infrastructure - and the importance of investing in it.
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In its report From Structures to Services: The Road to Better Infrastructure in Latin America and the Caribbean , published this Thursday, the organization points out that allocating more public and private funds to guarantee access, quality and affordability of these essential services is essential for reduce inequality and ensure prosperity in the region in the coming years. Currently, half of the poorest households spend 14% of their income on water, energy and public transport, which is 30% more than in other developing regions. "To the extent that there is an increase in the efficiency of services and a drop in prices, the income of the poorest sectors would rise 28% more on average than the income of the most affluent sectors for 10 years" , the study maintains.
"Latin America and the Caribbean needs to invest more in infrastructure. Between 2008 and 2017, it allocated just 2.8% of its GDP on average per year, half that of other emerging regions such as East Asia and the Pacific, which invested 5.7 % ", notes Tomás Serebrisky, sector economist advisor to the IDB's Infrastructure Department and one of the authors of the report. "We need more to get out of the low investment trap," he continues in a phone conversation. According to his study, the region should spend between 4% and 7% of its GDP on infrastructure each year.
Only in this way, says the document, can the connection to the electrical or water and sanitation system be universalized. "In 2019, 86% of the rural population of Latin America and the Caribbean had access to a safe source of water, according to a definition that understands that a household has access if it has a source of water located up to 15 minutes away on foot from the house. However, when more demanding standards are used, such as having mains water in the home, the proportion of the rural population with access is reduced to 55%. Similarly, if we define that they have access To sanitation households that have a sewage connection or septic tank, there are still 45 million people in Latin America who lack access, "the authors describe in the document.
Project planning and prioritization are essential to build what is really necessary and what generates greater social benefits
But blowing money is not enough, it has to be done "efficiently", Serebrisky stresses. "For every dollar 35 cents are lost in inefficiencies such as delays, costs, lack of maintenance, poor supplier choice ... Since we invest little, let's do it well," claims the IDB expert. Again, the example of water and sanitation is illustrative, explains Serebrisky. "40% is lost from production to the user. In the process of bringing it from the source, making it drinkable and distributing it. Due to breaks, poor maintenance." The most efficient in this case is to invest, maintain and fix, and not so much to build new structures. And when the latter is essential, the quality of the investment must be improved, the researchers point out. "From the planning and design of the projects, through construction (contracting and supervision of works), and reaching the maintenance of works in operation," they point out.
"Project planning and prioritization are essential to build what is really necessary and what generates greater social benefits," the report read. In this sense, Serebrisky reflects that the focus must be "on what people need", such as transport, for two reasons: because society demands it and because of climate change. Regarding the first, the IDB expert recalls the protests that were taking place in the region before the pandemic of the new coronavirus captured all the citizen's attention. "In Chile, the trigger was the increase in the metro fare; in Brazil, an increase in the price of the bus; and in Ecuador, the rise in the price of fuel," he summarizes. Regarding the second, the specialist is blunt: "Infrastructure has an obligation to mitigate and adapt to climate change." And it is better to do it from the planning phase, he clarifies. Infrastructure will be more expensive to build, but cheaper in the long term, since it will no longer have to be adapted to the impacts of global warming in the future.
A quality investment will serve to extend the services, which will also be better. "People's expectations are no longer the same. In Latin America and the Caribbean in 2020, it is not enough to have access to a modern bus if it arrives late and travels crowded, and if the fare over a month is equivalent at 10% of a minimum wage. It is not enough to have a tap in the kitchen if the quality of the water is so doubtful that it is necessary to buy bottled water to drink and cook. blackouts that damage appliances, "the authors show. Here they also point out the importance of services being affordable. According to data collected by the IDB, 40% of the poorest decile make their main journey on foot. That percentage drops to 10% among the richest decile of the population. "It is not that the poor like to walk, it is that they cannot pay for transportation," laments Serebrisky.
Although the challenges in the region are significant, especially in terms of access to water and sanitation, "not all is bad news," says the expert. There are many examples of good investment. According to the IDB study, some of them are in transport such as rapid transit buses - of Brazilian invention - or cable cars to connect high areas of cities - normally home to the poorest population - with the rest of the city. But also access to electricity "is a story that can be considered a success in Latin America," adds the report. "The combination of investments to expand the grid and the off-grid solutions that are used to reach the most remote locations, have brought the region closer to the universalization of access to electricity", the researchers point out. "The region can successfully innovate to improve services. Improving access, quality and affordability of services is not only an aspiration of experts," they emphasize. "And now is the time," ends Serebrisky.
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