Published On: Tue, Jul 10th, 2018

Improving cities in Latin America and the Caribbean is essential according to the World Bank

For the entity, investment in infrastructure, urban planning and human capital are vital for economic development.

world_bank_headquartersWASHINGTON - The increase in investment in infrastructure, better metropolitan governance, urban planning and human capital (such as education) are key to take advantage of the potential of the cities of the region, according to the report. Let's raise the standard for productive cities in Latin America and the Caribbean. This is particularly important considering the high levels of urbanization in LAC, where almost three-quarters of the population - equivalent to 433 million people - live in the region's 7,197 cities.

The Latin American and Caribbean cities show levels similar to the world average of productivity, but they are behind those that have better results in North America and Western Europe and that are in the so-called productive frontier at the global level, according to the report. The increase in productivity in the cities of LAC would promote greater growth of the countries and therefore of the region.

"Being on the average is not enough, our cities should aspire to be on the productivity frontier," said Jorge Familiar, vice president of the World Bank for Latin America and the Caribbean. "To have better infrastructure and management, as well as a trained population can make this happen, while boosting economic growth and shared prosperity in our countries. "

According to the report, led by World Bank economists María Marta Ferreyra and Mark Roberts, there are several reasons for low productivity in LAC cities, such as the lack of adequate infrastructure, urban planning, public services and national transport networks.

Multiple jurisdictions of local governments within large metropolitan areas can lead to failures in government coordination and the provision of public goods and services. Although qualified human capital is a great source of productivity for the cities of LAC, it is very concentrated in large cities, to the detriment of smaller ones. Without adequate investment or improvements in these areas, the high density of cities can generate levels of congestion that defy infrastructure and public policies, and can also lead to high crime rates.

Like other metropolises around the world, LAC countries experience competition between the positive forces of agglomeration, or efficiencies based on higher population density, and the negative forces of congestion. There are a series of policies that countries can implement to prevail the positive effects of the agglomeration.

"It is important to create an enabling environment for cities to fulfill their potential," said María Marta Ferreyra, principal economist at the World Bank and one of the authors of the report. "That means improving urban infrastructure, including roads, public services and communication networks, as well as better urban planning and management, improving the quality of the local business environment, reducing crime and making cities of all sizes. be attractive to the trained people. "

Likewise, no city exists in isolation, but its productivity is related to that of other cities in the country. Transportation, as well as other networks to connect them, play a fundamental role. The policies that affect the productivity of one city will have repercussions on others. The easier the flow of goods, resources and people through cities, the greater their contribution to national productivity.

Redoubling efforts to maximize the productivity of cities will play a key role in helping LAC accelerate inclusive growth and provide opportunities for all, the report said.

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