The role of infrastructures in the Competitiveness of a country

The Global Competitiveness Index considers the quality of Infrastructures as one of the 12 pillars.

It is not even necessary to enter in detail to imagine that Infrastructure, which permits goods and people to move around, can condition the competitiveness of a territory and the competitiveness of companies operating in that territory.

This is part of the 2014-2015 report. The WEF was including, until that edition, this very visual presentation for all the pillars.

The Infrastructures are, in fact, one of the Basic Requirements for Competitiveness. The first pillar refers to the Institutions of the country, and as much as the Institutions, also the Infrastructure of a country is a frame. The population and companies will unfold their lives and businesses within it.

The concept of Infrastructure in the WEF report includes two broad areas: Transport infrastructure (roads, trains, air connectivity, seaports) and Utility infrastructure (electricity and water).

The countries with good intrastructures will be competitive. The countries with deficient infrastructures will not. As simple as that.

It is entirely impossible to compete in global markets and to compete for skilled populations in a country without a qualitative and well-extended network of roads, railways, airports, and, when possible, harbours. It is not possible to grow economically without proper electricity and water supplies, and in many cases, gas and telecommunications.

The Roman Empire took great care of extending its roads system in all new lands that they incorporated. They did not have electricity but took good care to guarantee the access to water in their cities and settlements.

The Empire lasted for centuries in the West and more than a millennium in the East of Europe.

Nowadays, China is investing enormous amounts in recreating the “Silk Road”, and not only within China but also beyond its territory. China wants to have control of the roads to export their goods, and do not hesitate to undermine the role of the European Union with direct propositions to member states that go thru financial difficulties. It is also, of course, a way of increasing their political influence in the world.

AVE, the Spanish high speed trains

Spain, for instance, has spread its high-speed railway system to connect most of the cities, even those with small populations. This project has required enormous investments, sums borrowed, as the country could not pay them with its resources.

Instead, Spain has not invested enough in railway lines for freight shipping. An obvious example that is for many years on the table is the so-called “Corredor Mediterráneo”, a railway line for freight shipping which should follow the Mediterranean coast of Spain, from Andalucía to the limit with France, to accelerate and improve the export of goods manufactured in all the regions that would be served by it (Andalucía, Murcía, Comunidad Valenciana and Cataluña). This line has been requested for decades by exporters and the administrations of the mentioned territories. Wrong political decisions, more based on electoral interest than on the benefit of the country, have repeatedly delayed the works. We know that all citizens vote, but those taking the regular train to move from one province to another are many more than those exporting.

The one above is an example of mistaken decisions with severe consequences that result in global impoverishment, not only for the companies who cannot export their goods in easy and convenient conditions, also for the totality of the country.

I dare to say that governments who do prioritize their political interest over the country’s good are a fraud to democracy: more often than not, the construction of infrastructures is used to reward political pals and to punish the opponents. To these discretionary decisions, we can add the use of infrastructures as a source of corruption—one of the most desired areas by those elected in most of the countries. Is this what governments are voted for?

The investments should be directed there where they are most justified (because of the positive economic echoes, because of the number of people they benefit). The return they would bring could be used to improve the rest of the country.

Look at the list of countries posted above. As said, the countries with good intrastructures will be competitive and those with deficient infrastructures will not be.

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