Logistics integration for a more sustainable exploitation of natural resources in Latin America and the Caribbean

Implementation Strategy

The project embraces 4 countries – one per sub-region – within these countries are some specialized in minerals, other in agricultural products or petroleum among others commodities. This selection brings the opportunity to cover the main LAC natural resources’ logistics chains. Additionally, this focus allows that the analysis and mainly the policies recommendations would be helpful for other countries with a similar exportation pattern. For this reason, the project also will work closely with the regional physical integration initiatives as a way to promote the necessary changes in the policy framework for the regional integration of the logistics infrastructure, a step fundamental for a more sustainable and competitive exploitation of natural resources in LAC.

Outputs

The objective of the project is to strengthen the capacity of selected Latin American and Caribbean governments and the region’s major physical integration initiatives in designing and implementing logistics strategies and policy elements to contribute towards a more diversified use and sustainable exploitation of natural resources.

Latin America and the Caribbean (LAC) show significant limitations in providing infrastructure and logistics services, which being reflected in high logistics costs and important negative externalities, elements that seriously affect future trade competitiveness and regional development. In spite of the recent progress in industrial structural change and economic development, the region to a significant level, still relies on the export of natural resources and related products with low value added and little technological investment. Until today the countries have focused on ways to extract and transport their natural resources as raw material without adding significant value to the products. The lack of national long term development strategies and policies with a regional perspective in combination with an absence of sustainability criteria have promoted inefficient and isolated transport infrastructures. Further, this logistics based only in the extraction and export of some commodities, minimizes the possibilities to develop new industry clusters and the creation of regional and sub regional value chains. This implies important challenges for industry competitiveness, limits capturing value-added and economic returns from these export products and the expected positive social impacts.