1. GORDON WILMSMEIER Economic Affairs Officer Infrastructure Services Unit (ISU) Natural Resources and Infrastructure Division (NRID) VIII CIRIAS, November 17 th 2011, Porto Alegre, Brazil

2. Structure 1. Infrastructure and development 2. Investments and gaps 3. Infrastructure regional integration 4. Challenges and cooperation opportunities

3. Global experience, both theoretically and empirically analyzed, gives valuable results regarding the positive relationship between the Transport infrastructure and development  provision of infrastructure and economic and social development.  Although in the past several questions were raised about the forms of measurement and empirical results, it is now recognized that a positive relationship exists, and that the presence of infrastructure improvements helps in explaining growth differentials among regions or countries.  The services provided based on this infrastructure complement that relationship,  Improved infrastructure services depend, among other factors, on appropriate conditions of physical infrastructure supply, thus both supporting improvements in productivity and competitiveness of a country or region, and contributing to economic growth.  In the current design, we can no longer consider infrastructure and services in a separate manner, as it was traditionally. infrastructure services play a key role in the economic and social development.

4. Infrastructure services effects  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 (e.g. work place)  Improving human capital  directly (access to safe water, sanitation)  indirectly (transportation to school, hospital, entertainment, etc.).

5. Source: Luis Servén 2008 the relationship between quality of infrastructure and real GDP per capita and the inequality of income distribution exhibits similar impacts Infrastructure, development and equity

6. Infrastructure, development and equity – GDP per capita and logistics performance - 2009

7. Physical restraints or shortage High dispersion and multiplicity of public sectors views and action Institutional and regulatory obstacles or failures Weakness and/or lack of sustainability criteria Diagnosis and major infrastructure challenges in LAC

8. Structure 1. Infrastructure and development 2. Investments and gaps 3. Infrastructure regional integration 4. Challenges and cooperation opportunities

9. Supply Demand Gap Source: ECLAC, 2010 Estimated transport infrastructure gap in Latin America (base year 1995 = 100) The infrastructural gap

10. Required investments @5.2% of the GDP @ 7.9% of the GDP Closing gap? Currently LAC invests 2 - 2.5% of GDP in infrastructure

11. Logistics performance gap Logistics performance index: (1=low to 5=high)

12. Infrastructure, development and equity – GDP per capita and Logistics Performance - 2009

13. NRID/ISU - Main studies 1. World experiences on integrated policies  Developed and developing economies  Sub-national cases 2. LA: Public policies for and infrastructure services  13 LA countries  European Union  Esp. Spain 3. Infrastructure investment gaps 4. LA: Infrastructure diagnosis

14. NRID / ISU principal investigation themes  Time for Equality and economic and social development:  Full development  Equal rights  Public policies:  Comprehensive vision and approach  Sustainability  Sustainable transport and infrastructure services (both long and short distances, passengers and freight):  Modal shift  Technical regulations (emissions, fuel, engines, etc.), reaping the benefits of technological progress  Pricing and economic regulations

15. NRID / ISU principal investigation themes  New equation: State ‐ market ‐ society  The public sphere as a forum for collective interests and not simply for State or national matters  Political agreements for a new social and intergenerational cov enant, with specific responsibilities and accountability systems  Consolidation of a culture of collective development based on t olerance of difference and diversity  Strategic internally defined long ‐ term vision that promotes covenants between the stakeholders in production  Policies of State —not only of the current government or administration—channelled through institutions  PUBLIC POLICIES – INSTITUTIONS, MARKET & REGULATIONS

16. Structure 1. Infrastructure and development 2. Investments and gaps 3. Infrastructure regional integration 4. Challenges and cooperation opportunities

17. At least three ways of integration 1. Economic and trade integration 2. Political integration 3. Physical integration 4....

18. Subsector/sector TransportEnergyCommunications No.mill. USDNo.mill. USDNo.mill. USD Air242,690.3 Road20732,991.1 Rail6112,746.9 River742,837.4 Maritime313,391.2 Multimodal15439.7 Border Crossing39293.5 Energy Reg. Harmonization 1380.4 Energy Generation 2728,433.3 Energy Interconection 3611,870.7 Comm. Interconection 944.7 TOTAL45155,390.16440,684.4944.7 Infrastructure regional integration Sectorial and sub-sectorial composition of the IIRSA Portfolio (No of Projects and amount of investment in mill. USD) Source: IIRSA (2011)

19. YPE OF FINANCING IN IIRSA PORTFOLIO BY TYPE AND SECTOR IN IIRSA PORTFOLIO Regional integration. South America infrastructure finance portfolio

20. Structure 1. Infrastructure and development 2. Investments and gaps 3. Infrastructure regional integration 4. Challenges and cooperation opportunities

21. Opportunities •Integration & Cooperation •Criteria Low Carbon & Sustainable Transport •Integration & Cooperation •Integrated / modern policies •Logistics and Infrastructure Integrated and Sustainable Policies •Good practices, integrated policies •Capacity Building •Medium/High LPI Focused Policies Challenges •Infrastructure Gap •Lack of Sustainability •Regional Physic Integration •Low regional investments, financing troubles and small capital markets •Weak territorial cohesion and social inclusion •Isolated Policies •Institutional side •Training •Med/Low Logistics Performance Cooperation framework: infrastructure and policies

23. PARADIGM CHANGE STRATEGY OF INTEGRATED AND SUSTAINABLE POLICIES ON INFRASTRUCTURE, LOGISTICS AND MOBILITY INTEGRALITY Design, Execution and Control SUSTAINABILITY Economic, Social, Environmental and Institutional Source: Cipoletta (2011)

25. GORDON WILMSMEIER UN-ECLAC Gordon.wilmsmeier@cepal.org

26. Comprehensive vision and action for logistics and mobility Policies and plans Strategy definition and linking policies Logistical planning Financing Harmonisation Normative framework Legal and regulatory reforms according to the policy strategy. Institutionalism and participation Organisation and state conduction of the policies Government-Private Sector-Civil Society- Academic Interaction Provision of transport services and trade Technical regulations Simplification of procedures and documents I&D+ Human Resources HR training innovation in logistics, ICT, SMEs Logistics and productive system monitor logistical requirements of productive system encourage of logistics firms Infrastructure and logistics organise infrastructure, logistics and mobility projects hierarchically generate and maintain statistics