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1 Ricardo J. Sánchez | CEPAL | Naciones Unidas [email protected] Ixtapa, G°México November 4 th , 2010 Ricardo J. Sánchez Chief Infrastructure Services Unit Natural Resources and Infrastructure Division Infrastructure, logistics and inland ports Infrastructure, gaps and policies in Latin America, a vision from ECLAC

0 Ricardo J. Sánchez | CEPAL | Naciones Unidas [email protected] Ixtapa, G°México November 4 th, 2010 Ricardo J. Sánchez Chief Infrastructure Services

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Page 1: 0 Ricardo J. Sánchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org Ixtapa, G°México November 4 th, 2010 Ricardo J. Sánchez Chief Infrastructure Services

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Ixtapa, G°MéxicoNovember 4th, 2010 Ricardo J. Sánchez ChiefInfrastructure Services UnitNatural Resources and Infrastructure Division

Infrastructure, logistics and inland ports

Infrastructure, gaps and policies in Latin America, a vision from ECLAC

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All of you will be welcome at IAME 2011 Latin America next year in Santiago, Chile

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Infrastructure and Development

Global experience, both theoretically and empirically analyzed, gives valuable results regarding the positive relationship between the provision of infrastructure and economic and social development. Although in the past several questions were raised about the forms of measurement and empirical results, now it is recognized that there is a positive relationship, and that the presence of improvements in infrastructure helps to explain growth differentials among regions or countries.

The services provided from the infrastructure complement that relationship, concluding that improved infrastructure services depend, among other factors, of appropriate conditions in their supply, and both supporting improvements in productivity and competitiveness of a country or region, contributing to economic growth.

In the current design, we can no longer considering the infrastructure on one side and the other services, as it was traditionally. Is the definition of infrastructure services which play a role in the economic and social development.

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Infrastructure Action and transport

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 (working, for example)

Improving human capital: directly (access to safe water, sanitation) or indirectly (transportation to school, hospital, entertainment, etc.).

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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 p

c 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)G

ini

Co

eff

icie

nt

Source: Luis Servén 2008

If one considers the relationship between quality of infrastructure,real GDP per capita and the inequality of income distribution

trends are the same in each case

Infrastructure, Development and Equity

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Major Infrastructure Challenges in Latin America

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However, with regard to infrastructure in Latin America it is observed a lag, with the following main drawbacks:

1) Physical tightness or shortage in the provision of infrastructure and services.

2) High dispersion and multiplicity of views regarding public infrastructure and services, and the consequent lack of integrality in policy approach in different processes (conception, design, implementation and monitoring, supervision and evaluation).

3) Failures or institutional and regulatory obstacles in driving policy and the organization of the markets.

4) Weakness and / or lack of sustainability criteria in the design of policies for infrastructure services, especially transport.

5) Also, issues such as problems in the facilitation of transport and trade (which relate to technical regulations and bureaucratization of business and transit processes) as well as access to funding, quality and performance of public –private associations, institutional and regulatory accounting and operating conditions and mature infrastructure market completes the spectrum of issues that should be reviewed to maximize the contribution of infrastructure services on development and integration.

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For us, the main challenge is to align the conception, design, implementation and monitoring and control of policies related to infrastructure and services to maximize their impact on development, requiring the review of its policies for infrastructure services.

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The Infrastructural Gap

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Estimate of the infrastructure gap in transport in Latin America (base 1995 = 100)

Source: ECLAC, 2009

Gap

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

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0

50

100

150

200

250

300

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

p

2010

p

Brecha Efectivo Necesario

-50

0

50

100

150

200

250

300

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

p

2010

p

Brecha Efectivo Necesario

Estimate of the infrastructure gap in transport, selected countries (base 1995 = 100)

-40

10

60

110

160

210

260

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

p

2010

p

Brecha Efectivo Necesario

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 Necesario

Argentina Brazil

Chile Mexico

Gap Supply Demand

Gap Supply Demand Gap Supply Demand

Gap Supply Demand

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How we are today in terms of infrastructure investment?

Source: ECLAC, 2010

Investment in economic infrastructure has reversed its downward trend during the period 2007-2008.

Internal composition shows the public sector with a stable share of about 40% in the last two decades.

For its part, private sector, of great importance in the nineties, returned to exhibit higher dynamism in 2007 and 2008.

This composition could change temporarily in 2009 due to the impact of counter-cyclical policies and increased private risk aversion took place during the international crisis.

Inversión en Infraestructura como % del PIBSector 1980-1985 1996-2001 2002-2006 2007-2008

Pública 3.1% 0.8% 0.6% 0.7%Privada 0.6% 1.4% 0.9% 1.3%TOTAL 3.7% 2.2% 1.5% 2.0%

Fuente: Ca lderón y Servén (2004), Rozas (2008) y elaboración propia .

Public

Private

Total

Source: the authors.

Infrastructure Investment as ratios of GDP

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Challenges beyond the infrastructure gap

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Physical infrastructure, economic and technical regulations

Technical and operational conditions

Market conditions, regulatory and policy for the provision of infrastructure and services

Superior condition in the provision of infrastructure and related services, lower costs and better operating conditions, greater reliability and new services

Physical Infrastructure

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Creating a strategic, shared,

complementary and integrated vision

Productive DevelopmentProductive

Development

Internation

al Legal

Organizatio

n

Internation

al Legal

Organizatio

nEnviro

nmental

Protectio

n

Environmental

Protectio

n

Social

Developmen

tSocial

Developmen

t

Economic

and

Technical

Standards

and

Regulation

Economic

and

Technical

Standards

and

Regulation

Institutional Development

Institutional Development

Territorial

Development

Territorial

Development

Assoc

iativ

ity

Assoc

iativ

ity

Source: Sánchez y Wilmsmeier (2005)

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Grouping of conditions for Development

(1) Economic Factors

positive externalities, local economic conditions, skilled labor, expectations

(1) + (2) + (3) Economic

Development

(2) + (3) Accessibility changes

No growth.

(1) + (2) Unfavorable policy environment,

implies a negative impact on growth.

(2) Investments Availability of investment funds, investment scale and location,

investments and efficiency in their implementation.

(1) + (3) Without investment, implies that no change of accessibility. No growth.

(3) Political and institutional environment

Political, institutional and organizational framework that leads investment, legal process and framework, complementary policies, and efficient infrastructure management.

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ProductiveDevelopmentProductive

Development

International Legal

Organization

International Legal

Organization

Environmental

Protection

Environmental

Protection

Social Development

Social Development

Economic and Technical

Standards and Regulation

Economic and Technical

Standards and Regulation

InstitutionalDevelopmentInstitutional

Development

TerritorialDevelopmentTerritorial

Development

AssociativityAssociativity

A strategic, shared,

complementary and integrated vision

Source: Sánchez y Wilmsmeier (2005)

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Institutions:

how public policies are conceived, developed and implemented

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The design of public policies

Economici Regulation

Logistics Cost

Technical Regulation

Port Security Road Safety Charges Security

Cargo Tracking Intelligent Systems

Document Flow

TRANSPORT INFRASTRUC-TURE Logistic

The traditional way promotes dislocated policies that can not address the interactions and do not have synergistic effects. Decreases its contribution to development because

it spreads naturally associated phenomena

syne

rgy

Associated phenomena, common needs, regulation, integrated policy

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Economici Regulation

Logistics Cost

Technical Regulation

Port Security Road Safety Charges Security

Cargo Tracking Intelligent Systems

Document Flow

TRANSPORT INFRASTRUC-TURE Logistic

Social and Economic DevelopmentSUPERIOR CONDITIONS FOR POVERTY REDUCTION

INCREASE IN PRODUCTIVITY AND COMPETITIVENESS

syne

rgy

Associated phenomena, common needs, regulation, integrated policy

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Is required to analyze infrastructure, transport and

logistics as a system rather than as separate components to meet market requirements (quality-security-price) (administrative and legal

implications!)

For an efficient provision of public goods is required

Planning and Regulation(This is not inconsistent with Public – Private Associations)

Essential is a national and regional clear strategy, shared and sustained over time!

► Within the same authority (Public Leadership)

► Consensus with business and labor sector (Private Sector Participation and Commitment)

► Strengthen Dialogue and Analysis with consistency and coordination (Actors)

Role of the Government in Logistics Planning

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How it is built an integrated policy?

G. Cipoletta Tomassian, Gabriel Pérez & Sánchez, Ricardo J. (2010): Políticas integradas de infraestructura, transporte y logistica: Experiencias internacionales y propuestas iniciales; Serie NRID No 150, ECLAC

Recognizing that each country is unique and has special features that prevent "import" a solution directly. ECLAC has published a study:

Spain

Germany South Korea Finland

Colombia

European Union

Netherland

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In this context… what about inland ports? (i)

The development of inland ports in Latin America has followed a path similar to the policies of infrastructure, transportation and logistics, with low integration into the planning and execution of public policies.

Has been restricted to private initiative, thus, there are now excellent centres with high productivity within the precincts, but with no sufficient connection to the rest of the transport and logistics system.

Many inland ports are sometimes installed in locations that do not have the necessary connections, creating congestion and new infrastructure needs to be solved, without planning and with the tight timetable, reducing the efficiency of public resource allocation and appealing almost exclusively to the prevailing mode (ignoring railways and waterways, frequently).

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In this context… what about inland ports? (ii)

In short, there is not integration of logistics and inland ports to the entire transport system.

There are no agreed policies at regional level (between countries) and often also within a country.

Transportation planning and infrastructure tend to be dissociated from the logistic needs.

The development of inland ports is independent, many times, of the development of seaports.

Currently there are major inland ports throughout Latin America, however, because the issues raised above, the numbers are still low.

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In this context… what about inland ports? (iii)

For these reasons, the potential expansion of inland ports is very high throughout the region.

Already some countries, like the case of Jamaica, and incipiently some of South America, have begun planning integrated transport and logistics systems.

It is therefore necessary to integrate the vision and address the resolution of issues related to the development of inland and maritime ports together, and also with the rest of the system.

Otherwise the solutions will remain partial and inefficient from the point of view of the economy as a whole, beyond the private benefits of the suppliers.

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Client Logo

ThankYou!

Ricardo J. Sánchez

ChiefInfrastructure Services Unit

Natural Resources and Infrastructure Division United Nations ECLAC

+56 2 210-2131

[email protected]://www.eclac.org/transporte