Latin America needs an infrastructure upgrade

THE Transnordestina railway is supposed to carry soya beans, iron ore and other commodities from farms and mines in Brazil’s northeast to ports in Ceará and Pernambuco, and then on to markets in China. Brazil has spent more than 6bn reais ($1.8bn) on the project since work began a decade ago. But cows still amble along its unfinished tracks. In Lima and Bogotá workers can spend half as much time commuting as they do at the office. In Brito, a village on Nicaragua’s Pacific coast, there are no paved roads, electricity or running water. “It’s like we’re still living in the era of Columbus,” laments a fisherman.

Latin America is hobbled by its inadequate infrastructure. More than 60% of the region’s roads are unpaved, compared with 46% in emerging economies in Asia and 17% in Europe. Two-thirds of sewage is untreated. Poor sanitation and lack of clean water are the second-biggest killer of children under five years old, according to the World Health Organisation. Losses of electricity from transmission and distribution networks are among the highest in the world. Latin America spends a smaller share of GDP on infrastructure than any other region except sub-Saharan Africa (see chart).