Public-Private Partnerships and the Infrastructure Challenge in Latin America

Economists agree that infrastructure matters for growth. Adequate infrastructure is a prerequisite for increased access to global trade and investment flows, increasing competitiveness and thus sustaining regional growth. In fact improved infrastructure reduces transportation costs, excessive inventories and logistical costs, expanding markets and reducing distances between production and consumption centers. Good quality infrastructure reduces production costs, reducing prices and increasing the competitiveness of exports. Improved infrastructure also increases the attractiveness of the business environment for Foreign Direct Investment (FDI), increasing the local economy’s involvement in international value chains. Furthermore, infrastructure makes growth more inclusive by better distributing the benefits of growth, for example by enabling the delivery of health, education and other services.