Latin American Economic Outlook 2014

Logistics and Competitiveness for Development

image of Latin American Economic Outlook 2014

Latin American economies continue to present relatively stable growth but continued uncertainty with regards to the duration of the commodity boom could pose threats to medium-term growth and economic development. Latin American countries face increasing competition from emerging economies across the globe particularly in manufacturing sectors. In this context of shifting wealth, it is increasingly important to foster competitiveness and connectivity.

Improving logistics performance is particularly important as it directly impacts growth, productivity, and trade within the region and beyond. The region’s productive structure with significant concentration in natural resource and agriculture augment the importance of logistics in fostering competitiveness. Nevertheless, logistics performance in the region faces serious gaps particularly in the areas of customs performance and the availability of infrastructure. Improving these aspects will entail more and better investment in infrastructure, as well as making the most of existing infrastructure by putting in place efficient trade facilitation measures and efficient and appropriate regulatory frameworks.

Coverage is provided for Argentina, Brazil, Bolivia, Chile, Columbia, Cuba, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatamala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, and Venezuela.

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Policies for boosting logistics performance in Latin America

OECD Development Centre

Logistics, defined as the process required for transporting goods and services from the point of production to the end consumer, is a decisive factor for development and competitiveness. A country improving its score in the Logistics Performance Index by just 1 point has an average labour productivity gain of close to 35%. This is critical for Latin America and the Caribbean, since the region still lags far behind the OECD economies, and the region’s proportion of time-sensitive and logistics-intensive exports is three times more than that of the OECD countries. A range of policies need to be introduced to reduce transport costs, which, relative to tariffs, are much higher than in other regions. Gradually bridging the transport-infrastructure gap is vital for the region. In the short term, however, the region must use “soft” solutions to make the most of current infrastructure and thus improve its logistics performance and competitiveness. These solutions include providing modern storage facilities, streamlining customs and certification procedures and using information and communication technologies for logistics.

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