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Lee en español. 

By Tracy Betts.

I recently shared the results of an interesting survey commissioned by the Inter-American Development Bank in which over 33,500 respondents across the Americas defined their priorities for sustainable and inclusive infrastructure. When asked what type of infrastructure is most needed to improve their country’s economy, what do you think their response was?

The response was overwhelmingly clear schools were ranked as the most important infrastructure priority across Latin America and the Caribbean. Not surprising.

In a separate, previous  survey to learn the most pressing development challenges in the Region, education and early childhood development ranked first.

In this survey, we reached out to IDB stakeholders –mostly clients, but also some potential clients– from cabinet secretaries and top executives to middle management within the public and private sectors (48% and 20%, respectively), academia (12%) and civil society (18%), and asked them to select their top five priorities out of a field of 20 different options. Nearly 4,000 people  from all 26 borrowing member countries responded and the results were weighted based on historical IDB lending in their countries.

Education and early childhood development ranked first in Brazil, Colombia, the Dominican Republic, Panama, Paraguay, Peru, Suriname and Uruguay, while in Argentina, Mexico and Venezuela, it was social protection and poverty that were considered the most pressing development challenge.

These results are particularly important in light of the considerable progress the Region made in education and early childhood development and social protection and poverty reduction in the last decade. According to the IDB’s Social Pulse in Latin America and the Caribbean 2016, family incomes have increased, even while differences remain across and within countries. The increase is due in part to conditional cash transfer programs which typically require families to ensure their children attend school and get medical checkups regularly.

Between 1995 and 2014, school attendance for youth ages 13 to 17 rose from 70 to 84%. With IDB financing only, from 2012-2016 over 20.5 million students benefited from education projects and over 23 million individuals were served by poverty eradication/social inclusion programs. In addition, these income gains can also be attributed to the increasing participation of women in the workforce – their contribution to household income rose from 28% in 1996 to 35% in 2014.

Social investment to reduce inequality

Despite the progress made, the need and demand for social investment remains. Latin America and the Caribbean continues to be plagued with the highest rates of income inequality in the world. Unemployment among youths during the last two decades has been 15% – three times higher than the average unemployment rate among adults. There are still schools in the Region that lack adequate facilities and trained teachers (for learning and skills development, particularly in areas where students come from lower socioeconomic levels, live in rural zones and/or belong to indigenous communities. Overall, only 23% of students have access to science labs and because countries are increasing access to preschool education, there is an ongoing need to invest in adequate school infrastructure.

In terms of hospitals, although precise cost data for capital investment are lacking in most of the Region, the IDB estimates the bill for needed upgrades of existing infrastructure, building of new facilities and purchase of proper equipment to be roughly US$139 billion. Meeting this gap will require far more investment than is currently being provided.

Physical and human capital go hand in hand

In an era in which the development community is rightly concerned about closing the infrastructure gap, we must continue to invest in the social sectors if we want to eradicate extreme poverty by 2030 and meet the first of the Sustainable Development Goals (SDGs). Physical capital without appropriately skilled human capital translates into suboptimal performance and suboptimal productivity. And of course, that means continuing to invest in the education, health and skills development of all men and women, young and not so young, from all backgrounds.

The good news is that in all five Country Strategies (Argentina, Brazil, Colombia, Jamaica and Suriname) approved by the IDB last year, governments prioritized IDB financial and technical support over the next several years for interventions which are aligned to the social sectors. With IDB support, governments will strive for progress not only on achieving no poverty (SDG#1), but also quality education (#4), decent work and economic growth (#8), inequality reduction (#10) and partnerships for the goals (#17).

Speaking of partnerships, in light of the slower growth and fiscal uncertainty that mark much of the Region, we all must continue to explore innovative ways to meet this demand for social investment since we can no longer rely exclusively on government funding. For example, through partnerships with the private sector –private business, non-profits, foundations, and multinationals –countries can accelerate gains to productivity and reduction in inequality. Regardless of whether social services are provided by the public or private sectors or a combination of both, achieving the desired development outcomes is ultimately what matters.

In the future, I’ll share with you examples of how the IDB and its sister organization, the Inter-American Investment Corporation, are already engaged with the private sector delivering social services and how we could do more.

In the meantime, in your country, what are the most urgent challenges for development? What progress or setbacks have you experienced since the implementation of the SDGs? Tell us in the comments section or mention @BIDgente on Twitter.

Tracy Betts is the Principal Operations Advisor to the Social Sector Manager at the Inter-American Development Bank.

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