IDB Sustainable Infrastructure For Competitiveness And Inclusive Growth (2013)
TOPICS: sustainable infrastructure
SUMMARY: Infrastructure is a key pillar of development. Its suitable provision and proper administration stimulate economic growth and competitiveness. It is also essential for improving the quality of life and inclusion in modern societies. A broad set of emergent demands and trends will determine the infrastructure agenda for Latin America and the Caribbean in the coming decades. Providing universal access to electricity, water and energy reducing the costs of logistics, responding to the growing demand for energy, resolving the challenges of increasing urbanization and use of cars, reducing vulnerability to natural disasters, building an infrastructure less vulnerable to climate change, and contributing to food security are some of the challenges to be addressed by the infrastructure of the Region. Addressing these challenges will require a substantially larger investment. Estimates vary, but a broad consensus indicates that the Region needs to increase its investment in infrastructure by at least 2% of its gross domestic product over an extended period, in order to go from US$150 billion to US$250 billion per year. The Bank has supported the growing demand for financing infrastructure in the Region, allocating more than US$5 billion annually—about 50% of its portfolio—to this sector since 2009. The Infrastructure Strategy proposes that the IDB continue providing financing so that infrastructure may contribute to economic growth, provide access, and foster regional and global integration, in a context where opportunities need to be maximized so that financing and private management help close existing gaps in the infrastructure of Latin America and the Caribbean. Latin America and the Caribbean should not only invest to increase their stock of infrastructure; acting on and meeting emerging demands and trends require innovative solutions focused on the quality of service provided by the infrastructure. For this reason, this Strategy proposes that the IDB prioritize actions aimed at supporting the countries in the Region in their process of adopting a new vision where infrastructure is planned, built, and maintained to provide services of adequate quality that promote sustainable and inclusive growth. This new vision envisages infrastructure as an asset that should be appropriately managed and maintained, and incorporates environmental, social, and fiscal sustainability as its fundamental pillars. The Infrastructure Strategy identifies top priority areas of action that will be implemented through a balanced combination of loans to support policy reforms, investment loans, technical cooperation operations, and knowledge products.