MercoPress. South Atlantic News Agency

Latinamerica faces serious investment infrastructure deficit

Latinamerican economies have an accumulated infrastructure works deficit, since 2000, of over 700 billion US dollars according to the United Nations Latinamerican Economic Commission for Latinamerica and the Caribbean, Cepal.

"The gap is at least 90 billion US dollars annually", said Cepal Executive Secretary, Alicia Barcena. Currently the region invests 1.5% of GDP in infrastructure works which is equivalent to 45 billion US dollars annually. "This is a third of what Latinamerica should invest", said Ricardo Sanchez, from Cepal's Infrastructure and Natural Resources Economics Affairs office. The lack of sufficient infrastructure investment condemns 40 million people from the continent according to a report from the Inter-American Development Bank. The report also points out that because of the lack of infrastructure investment and maintenance, regional economies growth experience growth erosion from1.1% to 4.8%, which means billions of US dollars lost in additional resources and production. According to Cepal statistics Latinamerica between 1990 and 2003 invested 786 billion US dollars in roads, ports and railways. With this in mind Cepal is planning a forum to discuss ways to address the growing deficit in infrastructure. Another aspect of the discussion will be to analyze the impact of greater investment in economic development and wealth distribution. Several Latinamerican have repeatedly argued before multilateral organizations, -- based on the above impacts-- that investments in infrastructure, when it generates budget deficit, should not be computed as such, or at least a percentage of the overall investment in infrastructure works. "These (deficit) funds are not a squandering of resources but basically long term investments and development which are essential for any developing nation", according to a growing school of economists in the region including the former Cepal Executive Director and Argentine Finance minister Jose Luis Machinea.