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According to the World Bank report, Latin America needs to increase spending on infrastructure in order to prevent being left behind by China and other dynamic Asian economies. To achieve this goal, the authors state that investment is needed from both the public and private sector, but private capitals require the fulfilment of certain conditions.

One of the main issues highlighted in the report: "Infrastructure in Latin America and the Caribbean: Recent Developments and Key Challenges", by World Bank economists Marianne Fay and Mary Morrison, is that Latin American companies are losing competitiveness due to the infrastructure deficit, which at the same time is seriously affecting the capacity of the region to grow, create jobs and reduce poverty.

The report argues that Latin American states have considerably withdrawn their investment in infrastructure and that the private sector increased its participation in the 1990s but failed to compesate for public cutbacks. In the last five-year period, the level of private investment in infrastructure has plunged and shows no signs of recovery, given the lack of appetite of investors for areas such as infrastructure and emerging markets.

According to the report, one of the causes for this “waning appetite” of private investors in the region is the negative perception of public opinion in this respect. In this sense, the authors make a “defence” of the “wave” of services privatization that took place in Latin America in the 1990s, arguing that in most cases efficiency has improved and coverage and quality of services have also increased.

Nevertheless, the report asserts that a new introduction of private capitals will demand more solid legal, regulatory and institutional frameworks, greater transparency in transactions and innovative financing structures aimed at reducing the risks of projects and improving investors’ returns. Likewise, it stresses the importance of reducing subsidies and setting market price tariffs, adequately designing a social tariff. At the present time, “social tariffs for public services benefit those sectors that can afford to pay more”.

Therefore, it could be said that to follow this recommendation of the World Bank would contribute to the growth of economies within the region. In this context, it is essential for national governments and civil society to monitor the quality of investment projects being carried out in the continent as well as the social and environmental consequences they may have.

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