This review underlines the success of Chile’s infrastructure policies which have served as a backbone for it's rapid economic development and social welfare reforms - but the report also highlights the need to update public investment processes to reflect a more integrated approach to long-term development.
What are the potential impacts of not addressing Chile’s infrastructure gaps?
- Economic growth nationally would be constrained, as deteriorating infrastructure can negatively affect the competitiveness of export industries and inflate the prices of imported goods.
- Disparities in economic performance between regions and within metropolitan areas could widen.
- Future resources that could be allocated to strategic infrastructure investment may need to be diverted towards actions to reduce the deterioration of inadequate infrastructure.
The report highlights that:
- productive investment especially in transport infrastructure is vital for prosperity given that the economy heavily geared towards exports and relies on well-functioning logistics;
- infrastructure responses alone will not be sufficient to meet future needs. Investments need to be accompanied by stronger governance frameworks and institutions, with a clear evaluation processes.
- the importance of the regional dimension. Chile has the most centralised framework of the OECD for public investment, with 88% of that investment decided at the central level – compared to 41% on average in the OECD.