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 Unit Natural Resources and Infrastructure Division Infrastructure, logistics and inland ports Infrastructure, gaps and policies in Latin America, a vision from ECLAC

2. 1 Ricardo J. Sánchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org All of you will be welcome at IAME 2011 Latin America next year in Santiago, Chile

3. 2 Ricardo J. Sánchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org 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.

4. 3 Ricardo J. Sánchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org 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.).

5. 4 Ricardo J. Sánchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org 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

6. 5 Ricardo J. Sánchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org Major Infrastructure Challenges in Latin America

7. 6 Ricardo J Sanchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org 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.

8. 7 Ricardo J Sanchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org 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.

9. 8 Ricardo J Sanchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org The Infrastructural Gap

10. Ricardo J. Sánchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org Estimate of the infrastructure gap in transport in Latin America (base 1995 = 100) Source: ECLAC, 2009 Gap Supply Demand Gap

11. Ricardo J. Sánchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org Estimate of the infrastructure gap in transport, selected countries (base 1995 = 100) ArgentinaBrazil ChileMexico Gap Supply Demand Gap Supply Demand Gap Supply Demand Gap Supply Demand

12. Ricardo J. Sánchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org 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. Public Private Total Source: the authors. Infrastructure Investment as ratios of GDP

13. 12 Ricardo J. Sánchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org Challenges beyond the infrastructure gap

14. 13 Ricardo J. Sánchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org Physical infrastructure, economic and technical regulations

15. 14 Ricardo J. Sánchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org Creating a strategic, shared, complementary and integrated vision Productive Development Internation al Legal Organizatio n Environmental Protection Social Developmen t Economic and Technical Standards and Regulation Institutional Developmen t Territorial Development Associativity Source: Sánchez y Wilmsmeier (2005)

16. 15 Ricardo J. Sánchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org Grouping of conditions for Development

17. 16 Ricardo J. Sánchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org Productive Development Productive Development International Legal Organization Environmental Protection Environmental Protection Social Development Economic and Technical Standards and Regulation Institutional Development Institutional Development Territorial Development Territorial Development Associativity A strategic, shared, complementary and integrated vision Source: Sánchez y Wilmsmeier (2005)

18. 17 Ricardo J. Sánchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org Institutions: how public policies are conceived, developed and implemented

19. 18 Ricardo J Sanchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org The design of public policies Economici Regulation Logistics Cost Technical Regulation Port Security Road SafetyCharges 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 synergy Associated phenomena, common needs, regulation, integrated policy

20. 19 Ricardo J Sanchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org Economici Regulation Logistics Cost Technical Regulation Port Security Road SafetyCharges Security Cargo Tracking Intelligent Systems Document Flow TRANSPORT INFRASTRUC- TURE Logistic Social and Economic Development SUPERIOR CONDITIONS FOR POVERTY REDUCTION INCREASE IN PRODUCTIVITY AND COMPETITIVENESS synergy Associated phenomena, common needs, regulation, integrated policy

21. 20 Ricardo J Sanchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org 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

22. 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

23. 22 Ricardo J Sanchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org 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).

24. 23 Ricardo J Sanchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org 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.

25. 24 Ricardo J Sanchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org 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.

26. 25 Ricardo J. Sánchez | CEPAL | Naciones Unidas Ricardo.Sanchez@ECLAC.org Client Logo Thank You! Ricardo J. Sánchez Chief Infrastructure Services Unit Natural Resources and Infrastructure Division United Nations ECLAC +56 2 210-2131 Ricardo.Sanchez@ECLAC.org http://www.eclac.org/transporte