Countries in Latin America and the Caribbean will have to invest about 6.2 percent of their gross domestic product each year to satisfy infrastructure needs during the period 2012-2020, the Economic Commission for Latin America and the Caribbean estimates.
During the last decade, only about 2.7 percent of GDP was allocated for infrastructure investments in the region.
The United Nations organization released a study featuring a database of infrastructure investments in the region from 1980 to 2012, which formed the basis of the estimate.
The database collects infrastructure investment per country and by private sector or public sector origin and is updated with annual investment requirements in the four main economic infrastructure sectors transportation, energy, telecommunications, and water and sanitation.
The figure of 6.2 percent of GDP is derived from applying the investment trajectory to expected infrastructure needs. It assumes that the historic pattern of country investments will be repeated. As such, it is an approximation and not a strict recommendation, the ECLAC report said.
The database shows increasing investments during the period 2003 to 2012. The transportation sector has attracted the largest investment since 2005, followed by energy, telecommunications, and water and sanitation.
According to the report, average regional investment in the four sectors was 3.49 percent of GDP in 2012, the last available year in the statistics. That year, Costa Rica was the country that invested the most in infrastructure (5.47 percent of GDP total in public and private investment), followed by Uruguay (5.08 percent), Nicaragua (4.93 percent), Bolivia (4.47 percent), Peru (4.46 percent) and Brazil (4.10 percent).
According to ECLAC, investment in infrastructure projects contributes to increasing the coverage and quality of public services, such as health, education and recreation. It also reduces the costs associated with mobility and logistics, which in turn improves access to markets of goods, services, employment and financing, providing a favorable environment for improvements in the population’s overall well-being.
The report was prepared by the Infrastructure Services Unit of ECLAC’s Natural Resources and Infrastructure Division.