Latin America needs to improve its infrastructure provision and management

Julián Suárez, Vice-President of Sustainable Development at the Latin American Development Bank (CAF), has pointed out that Latin America needs to improve its infrastructure provision and management, both in economic and social terms. Speaking to Europa Press, Suárez said this improvement implies rethinking the way investment is defined, but "also being assertive in attracting private sector financing and operation".

What is the situation of water in Latin American households? Is there generalised access to this resource or is there still a long way to go?

During the last two decades, Latin America and the Caribbean has made considerable efforts to universalize basic drinking water and sanitation services, which has allowed 149 million people to have access to water and 176 million to sanitation. However, achieving ODS 6, which sets the goal of providing safe water not only in terms of access, but also in terms of continuous availability and guaranteed potability of supply, continues to be a significant challenge.

With this reference, and understanding that the right to water and decent sanitation has been explicitly recognised as a human right since 2010, 165 million Latin Americans still lack safe access to water, and 21 million of them do not even have basic access. The gap is much greater in the case of safe sanitation, with 91 million people not even having basic access. And, of course, at the aggregate level there are significant disparities that lose sight of the persistent social gaps against the most vulnerable populations.

In summary, a call to redouble efforts to reach the goals set for 2030 is necessary, because with the current trend the region will not reach the 6.1 goal of achieving universal and equitable access to safe drinking water at an affordable price, let alone the 6.2 goal of adequate sanitation and hygiene for all. 

In the event that access is not universal, in which countries is the situation most serious with respect to access to water? What measures would be necessary to achieve universal access?

In general, globally, a significant gap persists in the rural area, while in terms of regions, the situation is more critical in sub-Saharan Africa and some dry areas in Central and South Asia. In Latin America, most countries need to improve the levels of safe access to drinking water, so that it reaches everyone in a situation of quality and continuity. But, without a doubt, the great challenge is to advance in sanitation, which poses an agenda with connotations in the health of the population, which in turn directly impacts on the preservation of water sources. In the region, only 31% of wastewater is treated, while the difference is discharged into water bodies without any treatment, which contaminates rivers and lakes and affects the environmental balance. 

Regarding the role of infrastructure in Latin America, what is its current situation and what are the sector's prospects after the pandemic?

The situation is heterogeneous depending on the country. But a common denominator is that Latin America needs to improve its infrastructure provision and management, both economic and social, building on a long-term vision based on the relevance and quality of service to the final beneficiary. This implies rethinking the way investments are defined, but also being assertive in attracting private sector financing and operation. The latter is key to complementing traditional public investment and thus reducing the infrastructure gap.

For example, a recent study estimates the investment needs of the interurban land transport sector, noting that the region needs to double its average annual investment of 1.1% of GDP in the sector in order to increase its productivity and reduce the sustained 20 percentage point competitiveness gap with advanced economies by 2040. Without the private sector, this will not be possible.

In addition, it also implies the no lesser challenge of better managing the existing infrastructure. The region needs to make considerable progress in building institutional capacity commensurate with the opportunity to better operate and maintain current endowments. At CAF we are promoting an agenda that not only focuses on new investments, but also on actions aimed at a more efficient use of current assets, incorporating resilience criteria and an intelligent combination of grey infrastructure and nature-based solutions.

With regard to the pandemic, the region's challenges respond to pre-existing vulnerabilities that are evidently more present in the current context, fundamentally in terms of health and telecommunications infrastructure and the provision of essential basic services to households. For example, if we had had better prepared health systems and adequate epidemiological capacities, such prolonged quarantines could probably have been better managed.

Likewise, the continuity of learning in the formal education system through virtual solutions would have been easier and more equitable if the region had bridged its digital connectivity gaps at home. This reality exacerbates social inequalities. Similarly, the millions of Latin Americans who do not have access to water, or the 40% of educational establishments that have deficient infrastructure - including water - have difficulty in, for example, washing their hands with water and soap.

What do you think will be the main socio-economic consequences of the pandemic? How will it affect public services at home?

The impacts are considerable and one need only look at reports from institutions that predict an unprecedented fall in GDP. At CAF we are taking strong measures, unparalleled in the 50 years of the institution's existence, to support our partners in countering the economic and social impacts of this triple crisis (health, economic and social protection), seeking to support them in the emergency, but also in the opportunity to resolve the vulnerabilities that have exacerbated the virulence of the crisis in the region. 

As regards public household services, having been declared an essential service, virtually all governments made it compulsory to provide water services to all users, postponing, for example, cuts in service for users with debt for the duration of the pandemic, and even reconnecting previously suspended users. In many countries, compulsory quarantines were declared and providers had to close their service offices, and with it the possibility of charging for service through counters which, in the case of small and medium sized providers, is their main vehicle for receiving payment of bills. 

These factors, which are indisputable since the palliative measures of an unprecedented crisis, need attention in order to re-establish the financial balance of many provider companies that are seeing their finances greatly affected. They have been required to make a significant effort to increase the levels of coverage, disinfection of the water supplied, or have even had to hire outsourced personnel in view of the absenteeism and the necessary protection provisions for elderly employees, as well as to intensify the repair of leaks, due to the risk of water contamination. At CAF we are paying attention to this situation and we hope to have specific financial instruments in place soon.

Also, what opportunities does the disease crisis leave for Latin American countries, and is there any possibility of establishing a new social dialogue on natural resources, for example?

Every crisis is a threat but also an opportunity. The pandemic has made it possible to raise awareness about the importance of access to water and to revalue this vital resource, not only from an economic point of view, but also in a comprehensive manner, visible in all its dimensions (human consumption, productive uses, contribution to the environment and its cultural value included).

This means, for example, that society becomes a fundamental actor in the debate on the type of services it demands, and its co-responsibility with the care of water and its solidarity with those who still do not enjoy a basic and essential service, such as water and sanitation. Therefore, it is essential that the institutions that work in the sector facilitate and promote spaces for dialogue and cooperation that contribute to the design and implementation of participatory and inclusive public policies, within a framework of general agreement. 

Can the coronavirus lead to a decline in guaranteed access to water in the region?

I would not claim that the pandemic will reverse current levels of access. But as I pointed out earlier, the capacity of operators to guarantee water supply in adequate conditions is being stretched to the limit, while at the same time it is clear that the pandemic is making the structural challenges already present, especially in less developed countries, very much visible. 

In this sense, a significant challenge in view of the deterioration of economies with increasingly worrying fiscal situations and, in contrast, social protection systems that will need to be more present than before the crisis, refers to not losing sight of the long term. We will have to juggle, but we must understand that investments in social infrastructure cannot be a fiscal adjustment variable and therefore should not be postponed, as it would mean an even greater delay than the current trend in achieving ODS 6 on universal access to water and sanitation. 

In this perspective, it is essential to reflect on the value of water as a central element for health, but also essential for food security, energy security and the preservation of ecosystems. It is precisely on this subject, the Value of Water, that the 6th Water Dialogues will take place, organised by CAF in collaboration with Spain, and which will be held this 28th October by virtual means.