The Importance of Logistical Infrastructure for the Sustainable Exploitation of Natural Resources

During the first decade of this century, the rise in the prices of natural resources fueled the economies of Latin America and the Caribbean. However, the region has been unable to generate a virtuous process to sustainably take advantage of this wealth. For this reason, a new governance of natural resources is needed that ensures that the benefits of their exploitation are sustainable and that they are transformed into a concrete contribution to full development, helping to reduce existing inequalities, ECLAC indicates in its book Towards a New Governance of Natural Resources in Latin America and the Caribbean.

The Economic Commission for Latin America and the Caribbean highlights that, despite the strategic importance of natural resources, no special attention is paid in the region to designing specialized infrastructure or promoting logistical services with value added that are specifically oriented towards these products. Furthermore, much of the public infrastructure utilized to transport these natural resources is deficient and has high negative externalities for the population and the environment, the publication adds.

Infrastructure for private use, in many cases, acts as an entry barrier for other productive actors and does not foster improvements in territorial connectivity, which hinders the creation of possible economies of scale, of networks and clusters that could be achieved around logistics for natural resources, the report indicates.

Given that logistical costs in Latin America can be as much as four times higher than in the countries belonging to the Organization for Economic Cooperation and Development (OECD) and that the export of natural resources is especially sensitive to volume and timing, ECLAC stresses that ensuring adequate logistics for natural resources is an especially important issue for development in the region, where the lack of infrastructure or the reigning high logistical costs also hamper the possibility of establishing productive chains or re-exports with value added.

In other words, there will be no productive integration in the region without a logistical integration that sustains it.

In the context of this imperative need, ECLAC’s Natural Resources and Infrastructure Division, with the support of the United Nations Development Account, is carrying out the project Logistical Integration for a More Sustainable Exploitation of Natural Resources in Latin America and the Caribbean, which seeks to increase knowledge among governments of the region regarding the role of logistics for a more diversified use and the sustainable exploitation of natural resources, as well as to strengthen their capacities for designing and implementing transportation and logistical infrastructure and national policies in this field.

Similarly, ECLAC is implementing the Center for Governance of Natural Resources in Latin America and the Caribbean, which promotes the development of a shared vision and the formulation of a regional pact on the governance of natural resources, proposing sustainable transformations by addressing political, legal, economic, tax-related, environmental, social, territorial and intergenerational issues that reflect the perception and expectations of the population.

The Center will function within ECLAC’s Natural Resources and Infrastructure Division, and will be a regional and multidisciplinary platform, under the umbrella of the United Nations, that will analyze and lead efforts for the discussion, coordination and dissemination of knowledge in this area, as well as offer and coordinate technical assistance that lives up to the demands of member States and the changeable geopolitical context.