LAC Occasional Paper Series

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The LCSSD Occasional Paper Series is a publication of the Sustainable Development Department (LCSSD) in the World Bank’s Latin America and the Caribbean Region. The papers in this series are the result of economic and technical research conducted by members of the LCSSD community. The series addresses issues that are relevant to the region’s environmental and social sustainability; water, urban, energy and transport sector development; agriculture, forestry and rural development; as well as cross-cutting topics related to sustainable development such as climate change; logistics; crime and violence; and spatial economics. While all papers in this series are peer reviewed and cleared by the LCSSD Economics Unit on behalf of the Director of LCSSD, the findings, interpretations, and conclusions expressed in this paper, as in all publications of the LCSSD Occasional Paper Series, are entirely those of the authors and should not be attributed in any manner to the World Bank, to its affiliated organizations or to members of its Board of Executive Directors or the countries they represent. The World Bank does not garantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use.

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  • Publication
    Inclusive Green Growth in Latin America and the Caribbean
    (Washington, DC, 2013-01) World Bank
    Argentina has expanded the use of its portion of the Parana-Paraguay waterways system for the transportation of soy and other bulk commodities through an innovative tolling system that self-finances the dredging and maintenance of the rivers. Brazil, in turn, is pursuing a 'green trucking' strategy to improve efficiency of its cargo haulage industry, reduce petroleum usage, and curb pollution from trucking. For the entire hemisphere, the expansion of the Panama Canal will bring post-Panama vessels and introduce greater scale economies in shipping. The following sections of this paper provide a more detailed review of the sectoral objectives, challenges, and way forward in making Latin America and Caribbean (LAC) growth greener and more inclusive. It looks back over the achievements of the demand sectors of urban development and infrastructure services, energy, urban transport, and water and sanitation, as well as natural resources and rural development since Rio 1992. It highlights the achievements in those areas, and the ability of those accomplishments to establish a robust path for the region to inclusive green growth.
  • Publication
    Agro-Logistics in Central America: A Supply Chain Approach
    (Washington, DC, 2012-06) World Bank
    This chapter uses supply chain analysis (SCA) to identify transport and logistics bottlenecks that add costs, times and uncertainty to the exportation of perishable agricultural products from Central America. Macro-level analyses of logistics performance, including the logistics performance index, Doing Business Reports and Enterprise Surveys of the World Bank, as well as the Global Competitiveness Index of the Global Economic Forum, often leave policy-makers unclear on exactly what poor performance means for exporters and producers in Central America. How does poor road quality eat away at the profit margins of my country's producers? Extensive procedures add time to export processes, but how much time? How and to what extend does this additional time hurt the competitiveness of key industries? How does this effect vary by product type? By tracking the movement of seven carefully selected exports, these supply chains complement macro-level analyses by answering these questions for some of the region's key agricultural exports. A range of unique characteristics makes the success of perishable exports exceedingly dependent on the efficiency of the related logistics systems and the ability to connect effectively and reliably to global supply chains. Remote production zones add cost, time and variability to transport from the farm gate to the distribution, collection or processing center. Increasingly complicated international sanitary and phytosanitary standards (SPS) add institutional and procedural complexity to the supply chain. Above all, the time sensitivity of most perishable products increases the value of time and makes cold chain infrastructure and the availability of refrigerated containers essential for successful exportation.
  • Publication
    Freight Flows,Logistics Costs, and Efficiency: Optimal Path Analysis
    (Washington, DC, 2012-06) World Bank
    In Central America, cargo is transported almost entirely by road. The movement of imports and exports to and from international seaports is done by truck. Rail service is almost nonexistent and air transport serves less than one percent of the cargo generated within the Central American Common Market (SIECA, 2004). Intra-regional trade is much more important in Central America than it might seem at first glance. The second largest trading partner of Central America is the region itself. In 2010, one quarter of the exports from Central America were destined for final consumption within the region. Half of the exports of Central America (54 percent in 2010) correspond to agricultural products and a large proportion of them supply markets inside the region. Nearly 40 percent of intra-regional exports consist of food, beverages, animals and plants (SIECA, 2011). Perishable food products are transported on trucks, and spatially restricted by the geography and the road infrastructure. In this context, inefficiencies in the supply chain and delays in freight flows lead to economic losses and amplify the negative impact of the distance to the markets on trade. A gravity model of trade showed that the negative effect of distance1 on total intra-regional exports is 77 percent higher in Central America than in the European Union (World Bank, 2010). More precisely, an increase in distance by 1 percent is expected to reduce intra-regional bilateral exports in Central America by 1.65 percent. In terms of volume, the negative effect of distance within the region exceeds the effect in Europe by 50 percent in grains and up to 550 percent in processed food. In the latter case, an increase in distance by 1 percent is expected to reduce intra-regional bilateral exports of processed food in Central America by 2.88 percent.
  • Publication
    Integrating Central American and International Food Markets : An Analysis of Food Price Transmission in Honduras and Nicaragua
    (World Bank, Washington, DC, 2011-03-17) Arias, Diego; De Franco, Mario A.
    In 2004 the Central American countries of Nicaragua, Honduras, Guatemala, El Salvador, Costa Rica, and the Dominican Republic signed the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) with the United States and are currently negotiating another agreement with the European Union and others. This study examines the dynamics among international and domestic food markets by assessing the transmission of international prices to domestic prices of key agriculture commodities in Honduras and Nicaragua. It analyzes to what degree, if at all, a change in the international price of a given food product influences the domestic price of that same good, at the level of the consumer and producer and in different regions in each country. This analysis provides important evidence of the price dynamics that guide public policy recommendations for a complementary agenda of agriculture trade liberaliza-tion in the region. There are two methods for analyzing the relationship between international and domestic prices. The first is to conduct a price wedge analysis-to evaluate the difference between international and domestic prices. The second method is to conduct a price transmission analysis by analyzing the variation in the percent growth of international versus domestic prices. Evidence from Nicaragua suggests that for most of the agriculture supply chains studied (except for beans) there is little competition in the country's domestic market structure. A few Nicaraguan companies own the majority share of the market, both to purchase and export agricultural products and to import and sell food domestically. Obtaining information about the structure of domestic agriculture and food markets could shed light on country-specific impediments from domestic market structure to increasing agriculture growth, reducing poverty, and improving rural competitiveness. Information on domestic market structure was difficult to obtain for this study, particularly for Honduras. But, even in a context where the domestic market structure concentrates purchasing and selling power in a few agribusiness companies, price transmission could be high.
  • Publication
    Logistics, Transport and Food Prices in LAC : Policy Guidance for Improving Efficiency and Reducing Costs
    (World Bank, Washington, DC, 2009-08) Schwartz, Jordan; Guasch, Jose Luis; Wilmsmeier, Gordon; Stokenberga, Aiga
    This introductory section explains the rationale for the guidance note, reflecting on the relevance of food prices in Latin America and the Caribbean (LAC), their impact on the poor and the effect that logistics and transport costs have on those prices. Based upon that framework, the note provides an overview of the logistics and transport hurdles faced by importers and consumers in the region as food products move through the logistics chain. The final section of the report provides some policy guidance that could improve the efficiency of logistics systems in LAC and reduce the price of delivered foods.
  • Publication
    Crisis in LAC : Infrastructure Investment, Employment and the Expectations of Stimulus
    (World Bank, Washington, DC, 2009-07) Schwartz, Jordan; Andres, Luis; Dragoiu, Georgeta
    Infrastructure investment is a central part of the stimulus plans of the Latin America and the Caribbean (LAC) region as it confronts the growing financial crisis. This paper estimates the potential effects on direct, indirect, and induced employment for different types of infrastructure projects with LAC-specific variables. The analysis finds that the direct and indirect short-term employment generation potential of infrastructure capital investment projects may be considerable averaging around 40,000 annual jobs per United States (U.S.) 1 billion dollars in LAC, depending upon such variables as the mix of subsectors in the investment program; the technologies deployed; local wages for skilled and unskilled labor; and the degrees of leakages to imported inputs. While these numbers do not account for substitution effect, they are built around an assumed basket of investments that crosses infrastructure sectors most of which are not employment-maximizing. Albeit limited in scope, rural road maintenance projects may employ 200,000 to 500,000 annualized direct jobs for every U.S. 1 billion dollars spent. The paper also describes the potential risks to effective infrastructure investment in an environment of crisis including sorting and planning contradictions, delayed implementation and impact, affordability, and corruption.