Transcript
LACK OF INVESTMENTS IN INFRASTRUCTURE
The building of regional development has many walls and windows left over, but the pillars that support it are missing.
The lack of investments in the much-needed infrastructure, for a sharp and fair growth makes the economies in the region limp in the crucial moments.
Invited by the Annual Meeting of the Inter-American Development Bank in Belo Horizonte, Brazil, experts from all over the world attempt to find the pieces that will fit into this regional puzzle.
The lack of foreign investment in infrastructure, especially in the private sector, has left the region at a real disadvantage versus other regions in development, especially with East Asia.
On the average, the region invests about 2 per cent of their gross internal product in infrastructure, while our Asian counterparts invest about 6 per cent.
There are several reasons for this gap.
SOT
Everett Santos
President
AIG-GE Capital
Infrastructure Fund for Latin America
Tape 03-055
54:34 “The biggest problem has been the reliability of government to adhere to the undertakings that they made originally. That is adjusting tariffs when they were supposed to and the failure to do that. A perception that there is a greater risk in Latin America than was originally anticipated.”
Other factors include the lack of adequate profits, the high risks and unpredictable regulations.
Also, the investors see with great worry that the region has lost faith in privatizations.
SOT
Santos again
Tape 03-055
“The news that come out of Latin America is that governments are rethinking privatization, that that the public does not think privatization has been successful, which is totally wrong. This is what frightens investors or makes it very difficult to mobilize the money into the region.” 55:20
This is a pan-regional concept, and for example about 90 per cent of Argentines are opposed to privatizations.
Nevertheless, the countries are finding alternate means via the IDB to prop up these critical pillars for economic growth.
SOT
Demian Fiocca
President
Banco Nacional de Desevolvimento do Brasil (BNDES)
Tape 03-055
08:50 (approx)
Brazil has a very strong bank, such as BNDES that can finance in local currency large volumes at long terms. But I think that its possible to improve IDB’s relationship with these countries by creating new models, such as the possibility of having loans in local currency by IDB to these countries. And for this reason, let’s say that I am more optimist.
Also, the countries wish to commit themselves so that this investors gap will close.
SOT
Paulo Bernardo da Silva
Planning Minister
Brazil
Tape (master)
(In Portuguese) “ We are making efforts in two ways. One is to try to dedicate a larger portion of the public investments towards infrastructure. In 2005, we obtained a reasonable increase and this year we are going to repeat it. The other one is to create an environment that will permit the private sector to enjoy the conditions to invest”.
Concrete solutions that perhaps will act as the concrete for these much needed pillars.
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