In a region confronting the need to build for the future, the Corporación Andina de Fomento — a 40-year-old regional development bank — has long been on the forefront of funding infrastructure projects. But private-sector investment and innovative financing, such as special funds for infrastructure, also are necessary to foster development in the region, says Enrique García, the president and CEO of CAF.
García was the keynote speaker at the Latin Trade Group’s BRAVO Council, held on March 27 in Calgary, Canada, during the annual meeting of the Inter-American Development Bank. Addressing a group of bankers, financial analysts and development specialists, García said Latin America and the Caribbean are an economic success story. But he cautioned leaders and policymakers to avoid complacency since countries faced major challenges, not only in terms of investing in infrastructure but also in reducing poverty and inequality.
“Infrastructure is a key component in development and Latin America is not doing very well in that,” García said, adding that infrastructure investments in Latin America equaled just 3 percent of the gross domestic product in the past decade, while Asia’s rate was 10 percent. Ideally, Latin America and the Caribbean would try to double the amount of investment on infrastructure, García said.
The CAF, which has approved more than $10 billion in loans for development, including infrastructure projects, focuses not only on the finances of the projects but also on their quality, from economic returns to environmental concerns to future maintenance, García emphasized.
García urged nations to use technology, innovation and creativity to build their competitive advantage and not to depend so heavily on commodity exports.
About the Author: Joachim Bamrud is the executive editor of the Latin Trade Group and a former editor-in-chief of Latin Business Chronicle and Latin Trade magazine.