Documents - Andean Community - The attachment to the Brasilia Communique

The attachment to the Brasilia Communique
Plan of Action for Regional Infrastructure Integration in South America
A Proposal
Inter-American Development Bank

There are two components to the proposed Plan of Action for Development of Regional Infrastructure in South America: (i) the programmatic framework for the Plan and (ii) mechanisms for making the Plan operational and follow-up monitoring.

Programmatic Framework of the Plan of Action

The Plan of Action rests on ten core principles for regional infrastructure development in South America:

Design a more integrated vision of infrastructure development that encompasses all its components and synergies.

The concept of regional infrastructure cannot be confined to initiatives in the transportation, energy, and telecommunications sectors. It should also envisage links with social and environmental infrastructure and the infrastructure underpinning knowledge-based information technologies, so countries can make the most of available synergies among these components of development.

Set projects within a strategic planning process, taking as a starting point an identification of regional integration and development hubs in the South American continent.

This approach will seek maximum efficiency of investment outlays, coordinating the different countries' work plans and fitting them into a strategic vision of integration, in which priority is given to activities in the major regional integration and development hubs of the continent.

Reform and modernize regulatory systems and institutions that govern infrastructure use in each nation.

In many instances, existing infrastructure is not being put to its best use because of regulatory and institutional impediments, notably at border crossings. Accordingly, there needs to be a greater focus on these regulatory and institutional barriers. More work also should be done to harmonize regulatory environments and legislation, in order to attract new investment and ensure that optimal use is made of investment funding already at work, and to continue modernizing public agencies and updating their procedures, technologies, and human resources.

Strengthen the capacity of States for policy-making, planning, and regulatory framework development.

To pursue this objective, States will need to be effective policy-makers and architects of frameworks which serve as a reference for private-sector and government activity; foster and protect competition; adopt regulatory environments based on technical and economic criteria; and produce relevant, readily available information. Efforts should be made to ease distortions created in the different markets by regulations, the operation of legal monopolies, quota setting, taxes and subsidies, and discretionary price- and tariff setting.

Harmonize policies, plans, and regulatory and institutional frameworks among States.

If regional integration objectives are to be attained, further efforts will be needed to harmonize criteria for the design and integrated technical, economic, and environmental evaluation of regional infrastructure projects, to make certain they will be sustainable, while minimizing the risk of discretionary approaches to project selection and support. Mechanisms also need to be devised to reinforce the synergistic effects of integration projects that are complementary and ensure that projects which could substitute for one another are selected on their own merits.

Take careful account of projects' environmental and social dimensions.

Our countries need to be more proactive in assessing the environmental and social implications of infrastructure projects, setting their own and shared criteria and coordinating efforts in this area. Building on their wealth of experience in national and regional infrastructure project design, countries should look at a project's potential environmental impact from the very start of the design stage. This should be viewed as an opportunity to put together more complete, fully integrated projects, and not merely as a way of mitigating their less desirable impacts.

Pursue regional integration projects that can raise the standard of living of local populations and offer them new opportunities.

Efforts should be made to have infrastructure projects generate as many local development impacts as possible, and not simply serve as corridors linking major markets.

Construct mechanisms that promote participation and consensus.

In developing and selecting projects, mechanisms should be devised to give an effective voice to affected communities, and the private sector, which may wish to fund, construct, and operate such ventures.

Develop new regional mechanisms for programming, executing, and managing physical integration projects.

Mechanisms for sharing integration project management and finance should be developed, using existing institutions and drawing on the experience the countries have amassed over the past decade.

Optimize the use of funding sources for developing common strategies.

This effort should include an exploration, by the governments and multilateral lending institutions, of innovative avenues for leveraging private capital to finance projects which can open up trade opportunities and fairly share the risks and rewards among public- and private-sector participants. The means to this end can be common strategies and creative solutions and instruments that take due heed of the nature and preferences of the capital markets.

Using this strategic vision of major regional integration and development hubs in the continent as a roadmap, the physical, regulatory, and institutional requirements for basic infrastructure development in South America in the decade ahead need to be ascertained. To that end, a series of actions in short term should be devised along with some longer-range initiatives on at least three fronts: coordination of plans and investments, alignment and harmonization of regulatory and institutional settings, and innovative public and private financing mechanisms.

Following up on the Plan of Action

The Plan includes a scheme to attain consensus-based objectives using common methods and task-sharing. A key requirement here is a follow-up mechanism for implementation of decisions and directives emanating from the Heads of State of the South American governments. The mechanism should clearly set out working methods, targets, and timetables, and the apportionment of responsibilities.

The technical and political profile of such a mechanism should be such as to expedite timely, efficient decision-making regarding the Heads of States' mandates in the area of regional infrastructure development. The follow-up mechanism thus should be designed with five central tenets in mind:

Avoid creating new institutions, tapping instead the human and financial resources already in place in national, regional, and multilateral institutions;

Strive to ensure that the various elements of the follow-up mechanism reflect a resolute, top-level, enduring political commitment; have a permanent presence close to the decision-making process of financial institutions; duly interpret societal needs, and expedite governments' internal management;

Secure the full participation of all the South American governments and have decisions taken by consensus of the involved parties;

Expedite decision-making by the South American governments through a process of agile, flexible interaction between those governments and regional and multilateral agencies that offer specialized technical advisory support; and

Be guided by a pre-established work timetable that sets out sequential objectives and specific tasks for the different components that comprise the follow-up structure.

With the above-listed principles in mind, the follow-up mechanism for the Plan of Action for Regional Infrastructure Development in South America would consist essentially of the following elements:

An Executive Steering Committee (ESC) of senior officials appointed by the South American governments from agencies selected by the respective governments, as they deem appropriate.

Executive Technical Groups (ETGs) composed of officials and experts appointed by the South American governments from agencies selected by the respective governments, as they deem appropriate. These will be temporary bodies set up for each integration and development hub and they will examine such specific issues as harmonization of regulatory environments, integrated project identification methods, and so on. The groups would meet to review issues put before them; once their work is finished, they would disband. The groups could seek support from regional, subregional, and international organizations in their respective areas of specialization.
A Technical Coordination Committee (TCC) made up of representatives of the Inter-American Development Bank (IDB), Andean Development Corporation (CAF), and Fund for Development of the River Plate Basin (FONPLATA) would actively assist the governments as they put the Plan of Action into practice and monitor its operation, in such areas as integrated project identification and appraisal and securing funding to carry through projects.

As part of an ongoing consultation process, the Executive Steering Committee would promote meetings designed to elicit input from the private sector and community organizations and to help coordinate efforts at the country level.

The institutions represented on the Technical Coordination Committee (IDB, CAF, FONPLATA) will present proposals before 31 December 2000, furnishing details of the subject areas and sectors that would form part of the Plan, indicating what they see as priority areas of attention in the short term. The proposals also will provide a more detailed design of the Plan's follow-up mechanism.