Americas Quarterly - Winter 2012

FIGURE 3

Soft Infrastructure:
Asia Versus Latin America
EXPORTS

East Asia/ Pacific

South Asia

Latin America/ Caribbean

OECD
NUMBER OF
DOCUMENTS
NEEDED
(AVERAGE)

5

7

9

TIME
REQUIRED
(DAYS)

23

33

20

11

COST PER
CONTAINER
(IN US$)

902

1,339

1,229

1,069

IMPORTS

East Asia/ Pacific

South Asia

Latin America/ Caribbean

OECD
NUMBER OF
DOCUMENTS
NEEDED
(AVERAGE)

5

7

9

end of the spectrum, only Paraguay outperforms the regional average on one indicator: percent of roads paved.

Latin America scores better when it comes to soft infrastructure— defined as procedures and institutions related to moving goods and services. Improving soft infrastructure is a main objective of trade facilitation, which aims to increase the bureaucratic and administrative efficiency of customs, ports and investment gateways and speed the movement of goods, services and investments.

While Latin American countries perform well in terms of the number of documents needed to trade and the time cost of trading, the greatest difference with East Asia is in the cost. It is almost twice as expensive to both export and import a container of goods from South America as it is from East Asia—one and a half more expensive from Mesoamerica [see Figure 3]. There are, of course, variations among countries: Panama is about on par with the ASEAN average, while Brazil and Colombia’s costs both exceed three times that of China. (For a country-by-country breakdown, please visit www.ameri- casquarterly.org/kotschwar.)

Source: World Bank, World Development Indicators

TIME
REQUIRED
(DAYS)

25 33 23 11

COST PER
CONTAINER
(IN US$)

1,487 1,384 1, 132 949

into the international trading system—score high in terms of the infrastructure stock indicators. Poorer and less integrated countries Cambodia, Laos and Burma/Myanmar, score lower and bring down the regional averages of the access indicators.

Differences across regions hold,
however, at all income categories:
when ranked according to per-capita
GDP, Asian countries perform better
than Latin American countries in the
top, middle and lower thirds. Looking
at the lower third of the income dis-
tribution, which includes countries
with per-capita GDP below $3,000,
all the Asian countries (Indonesia,
Vietnam, Laos, and Cambodia), with
the exception of the Philippines, per-
form higher than the Latin American
average on at least one indicator. Of
the Latin American countries at this

WHICH COMES FIRST: TRADE OR TRANSPORTATION? Infrastructure services are mostly provided through networks—webs of relationships—in which new investments extend a web of commercial and economic relations and allow for a better allocation of resources. Cooperating with neighboring countries—already partners in regional integration efforts—helps countries and investors share costs and expand network possibilities. The problem is, not all countries have developed the foundation for effectively mobilizing and allocating trade-related transportation investment.