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How Safe Are Latin America’s Ports?

How safe and efficient are Latin America's ports? Four experts share their insights.

BY LATIN AMERICA ADVISOR
Inter-American Dialogue  

The Inter-American Development Bank has said modernizing Latin America's ports will improve trade flows dramatically and make the region more globally competitive. What role are public policies—such as U.S.-backed efforts to coordinate maritime and airport security internationally—having in the port development process? Have the ports of Latin America and the Caribbean fallen significantly behind other emerging market regions in relation to these requirements or the lack of their implementation? What are the key things that need to happen in order to modernize the region's ports and make them more competitive?

Stephen Johnson, associate with VisiónAméricas, LLC in Washington and former Deputy Assistant Secretary of Defense for Western Hemisphere Affairs: Most of the world's commerce moves through seaports and airports. To ensure they are trade-friendly and not bottlenecks, they need to be secure, modern and intermodal—that is, connected to other forms of transportation to carry people and goods where they need to go. As in other parts of the world, their development in the Americas has been uneven, dependent on local resources and priorities. At one end of the scale are the impressive automated maritime container yards of Cartagena, Colombia and Lima, Peru's pleasant, efficient air terminal. At the other end are old ports or damaged facilities like Haiti's that need to be completely rebuilt. Since 9/11, airports have received a lot of attention. However, many of the hemisphere's maritime facilities need a facelift—to acquire more effective container scanning and tracking systems, upgrades to internal security, and expanded coastal patrol capabilities to protect them from a variety of threats. On the intermodal side, Latin America needs connecting roads and rail service to boost the usefulness of some seaports beyond being international transshipment hubs. And when the Panama Canal expansion project concludes, nearby Latin American port facilities will need capacity to handle the additional traffic. Better seaports and air terminals can make the region more competitive, but such improvements are capital intensive. Countries that succeed in attracting new investment will be those with strong rule of law, minimal corruption, and forward-looking modernization plans that conform to standards advocated by industry watchdogs such as the Business Alliance for Secure Commerce and our own Department of Homeland Security.

Eduardo Parodi, director of sales and marketing for Latin America and the Caribbean at Smiths Detection: The aftermath of 9/11 affected not only air transportation but the transportation of passengers and commercial goods via maritime routes as well. The implementation of programs such as the Container Security Initiative, the International Ship and Port Facility Security Code and other similar regulations has caused a major impact on the infrastructure costs of all maritime port facilities in the region often eating into profitability and forcing ports to seek greater efficiencies in operation. Some have responded in a more progressive manner than others, but most are far short in terms of overall security implementation when compared to the numerous ports in the Asia-Pacific region and some in Africa. Although security programs are being implemented and modernized, a true leap forward compared to 10 years ago, the investment in security infrastructure (hardware) beyond general closed-circuit television and access control measures is greatly lacking. The looming threat of a potential 'dirty bomb' transiting through these ports remains low. However, it is a potential and there is barely any investment in radiation detectors or other non-intrusive inspection systems, not to mention investments in detection capabilities of the region's true risk, narcotics. Regionally, there seems to be an overriding desire to invest cautiously in security infrastructure, which is understandable given the strong competitive nature of the business and the costs involved. Yet, what is needed is a uniform understanding of the potential threat that a lack of modern and effective security protocols may cause on the bottom line as well as the guiding concept that such capital investments will ultimately contribute to the port's added value and competitiveness by providing a safer arrival or departure point for passengers and cargo. This would increase the overall attractiveness of the port and also facilitate trade, the prime goal of all ports.

Ray Walser, senior policy analyst at The Heritage Foundation: Even without state of-the-art ports and supporting infrastructure, Latin America has resumed its growth path. In the post-9/11 environment, the United States focuses on security as well as efficiency and is working with 10 Latin American ports in the Container Security Initiative to pre-screen U.S.-bound containers. This effort helps modernized security infrastructures in some of the world's busiest such as Balboa, Panama and Santos, Brazil. U.S. East Coast and Gulf of Mexico ports look eagerly to capitalize on Panama Canal expansion and increased trade volumes with post-Panamax vessels. Foreign investments, particularly from Asia, have a significant potential to modernize many regional ports. Recent Chinese investments in Brazil that include billions to develop Porto de Açu and a massive shipping/industrial complex fuel a renewed fever of speculation about China's expanding role in the region. China's effort to secure sources of commodities includes an appreciation of the need for modernized ports. It also reflects the capacity of China's muscular, state-managed capitalism to finance large, long-term investment projects. While most Latin American ports have far to go, current trends demonstrate that improved security, economic growth, and improved port efficiency go together and require sustained investments. The Inter-American Development Bank (IDB) recognizes that port modernization is integral to further national development. As a 2008 IDB study 'Unclogging the Arteries' indicates, a lowering of disadvantageous transportation costs is a must. Additionally, the overall state of the region's ports is intimately connected with Latin America's global economic integration as a competitive and innovative exporter of commodities, as an emerging consumer market and as a potential technological and manufacturing competitor on a global scale.

David Rogus, president of David Rogus & Associates and former director of Brazilian and Southern Cone affairs at the U.S. State Department: U.S.-backed international efforts, centered in large part on the International Maritime Organization's International Ship and Port Facility Security Code, a comprehensive set of measures to enhance the security of ships and port facilities developed in response to the overall threat environment in the wake of the 9/11 attacks, have been a key factor in port development throughout the region. For example, in the case of Brazil, implementation and compliance with the code have provided a broad blueprint for a dramatic improvement in port, cargo and ship security and are a catalyst for programs to make ports more efficient. This has come about because many of the vigilance, surveillance and monitoring systems needed for improved security synergize extremely well with state-of-the-art cargo, ship and personnel movement and control measures focused on reducing delays, improving safety and eliminating redundant bureaucratic bottlenecks. Brazil's Special Secretariat of Ports has embraced a series of critical programs to bring the country's ports up to world-class level. Among those programs are the 'paperless port' program, aimed at drastically reducing the crippling amount of government paperwork required from every ship entering and leaving Brazilian ports—measured at an average of 112 separate documents per each entry and departure. Also, channel-deepening and widening projects at major ports will allow regular traffic by the world's most modern vessels. And the cutting-edge vessel traffic management systems, an enhanced maritime version of air traffic control systems, will provide real-time control over ship movements and detailed information about cargo, passengers and crew. Other major modernization requirements focus on much-needed improvement in physical port infrastructure, including berthing, cargo handling, storage facilities, roadways and railroads.

Republished with permission from the Inter-American Dialogue's daily Latin America Advisor newsletter.

 

 

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