This is a new work that I recently sended to the Ideas for Cuba contest. The main topic is how to fight Cuban poverty.
2-Make public investments in inclusive infrastructures to boost economic growth and reduce inequality
The previous proposal emphasized the role of privatizations in economic growth and one of the benefits of this is the direct cash flow at the time the assets of state-owned enterprises are sold to the private sector. But a question of special interest arises: what should these resources be used for?
It is important to specifically relate the need to clarify the role of development in countries, investment to add or improve basic infrastructure, and to expand or enhance the delivery of services associated with it, especially in relation to productivity increases and Of economic growth rates as key factors in poverty reduction.
Infrastructure networks and their services constitute a fundamental element of the productive structure of every nation and its markets, as well as the articulation between national economies and the world economy, which makes possible the development and expansion of trade and production Of goods.
The transport infrastructure is identified, related to the networks and routes of transport both terrestrial, maritime and air (routes, roads, ports, public transport and airports). Then, the infrastructure related to energy networks, such as the distribution of fuels and home electricity networks. We also find the hydraulic infrastructure linked to potable water networks for consumption and sewage systems. And one that can not be forgotten is the one referring to telecommunications networks: fixed telephony, internet networks and mobile telephone networks.
The influence of transport permeates all sectors of the economy and the social fabric of a country. In this sense, investments in infrastructure works facilitate the reduction of costs associated with the consumption of services, improve access to goods and inputs markets, and increase the coverage and quality of the services provided to the population, as well as For a society to reach high levels of human development people can realize their potential and have full lives in an environment that enables that development. In order to generate such an environment, public policies and investments are needed that favor an adequate complementarity between the demands of society and the needs and rights of individuals. One way to approach the level of inclusion is equality in income, and research shows that A greater volume and better quality of the infrastructure help to improve the distribution of wealth.
A good example of this enabling environment is public investment in logistics and mobility infrastructure. Developing and strengthening this infrastructure has a potential impact on economic development and poverty reduction. The transport infrastructure is of vital importance for the quality of life of the population; Mobility links urban and rural areas; Connects the country with the outside; Facilitates access to basic services such as education and health; Contributes to the functionality of cities and makes them more competitive. In addition, logistical infrastructure can be instrumental in generating quality jobs and increasing competitiveness in the production of goods and services in the countries, as it has a significant impact on increasing productivity and efficiency reflected in lower costs.
Economic growth and investment in infrastructure are mutually reinforcing. On the one hand, growth helps generate the necessary resources to finance infrastructure investment and drives the demand for better infrastructure services, while on the other hand, infrastructure improvements stimulate economic activity and stimulate the productive potential of a Country over time. It is not surprising then that there is a positive relationship between the quality of the infrastructure and the levels of income in the different countries.
It is clear that Cuba must make a huge effort to launch a sustainable economy in time that can permanently lower poverty levels. In this way, putting as a main objective to modernize its infrastructure is central because it is impossible to think of the development if before it is not reversed with decision to recover the energy self-sufficiency, to equip modern trains, routes, ports and airports so that our primary and manufactured products have logistical costs that are competitive with international ones. And it is essential to incorporate the new telecommunications technologies to be integrated into the system of countries that lead economic-social development and global knowledge.
These investments have a direct impact on economic activity, generating new work spaces that will lift millions of people from the marginality of the system.
Infrastructure in transport services facilitates citizens’ participation in economic opportunities and their access to essential basic services such as education and health, so when they are designed to be inclusive they are strong inducer of economic development and reduction Of poverty.
A look from microeconomics also shows that an investment in road infrastructure increases the efficiency of markets, since it allows not only the development of certain productive sectors – industry, trade, agriculture – but also their integration , Inducing, in turn, their encounter with foreign trade through the closeness that occurs with ports and airports.
Another positive multiplier effect of the investment in road infrastructure is the regional development that takes place, as the construction of roads, bridges and roads promotes the creation of urban centers which feed on inputs from the rural sector and, in turn, They feed them with final goods.
With an increase in investment in road infrastructure, it is expected that price reductions will occur in most products, especially those of agricultural origin; This is because new roads should have a reduction in transport costs, especially by reducing fuel consumption. The same result should be expected in terms of employment, since the expansion of the productive sectors serves to create jobs, both direct and indirect.
Finally, such is the importance of investment in road infrastructure, which has been placed as a factor of competitiveness and, in fact, the countries that show improvements in their transport networks – driven by this investment – are those that seem To advance more in its level of competitiveness.
For the particular Cuban case, it is essential to use shocking investments in road networks linking cities and rural areas. In this way the flow of trade and human capital would be more dynamic in the interior of the country and, as production and consumption are strengthened in the economically most excluded areas of the nation, the more the foreign investment is stimulated in a more convergent way . This process would favorably affect the reduction of inequality and poverty in turn.
As the road networks expand, the scope of urban sprawl widens, a phenomenon through which the metropolitan area of cities expands geographically. This would reduce the population density within the cities, reducing the concentration of housing.
Faced with this event, it is essential to provide an adequate system of electrical and hydraulic infrastructures that allow the expansion of cities. They would also serve as platforms in the composition of industrial parks by private investment.
With regard to telecommunication infrastructure, it is worth mentioning that the phenomenal increase in access to information and communication technologies in the world has been accompanied by a growing literature on the contribution of these technologies to economic growth , Social development and the reduction of poverty. According to various criteria, telecommunications infrastructure has been described as the means by which underdeveloped countries can overcome developmental stages and technological barriers to achieve both economic growth and broad-based progress. Hence there is a link between telecommunications and poverty reduction.
Likewise, access to information and communication technologies could be beneficial not only to poverty reduction, but also to society as a whole with respect to the distribution of those benefits. Access to information through telecommunications infrastructure is therefore not only a matter of connectivity, but also the ability to use the new tools and relevant content provided in an accessible and useful way. Better policies and better implementation are needed to achieve a national telecommunications sector that facilitates a faster access rate at a lower cost.
This should be accompanied by an increase in the resources allocated to developing literacy in information and communication technologies from the school level so that access to diversified sources of information can also contribute to broadening the spectrum of political debate with the consequent positive effect on social development.
#If you liked this article, don’t forget to share it on Facebook and Twitter.