19 de enero de 2014

Infrastructures, mean or end?

Sources: Eurostat, Ameco, OECD, IMF, ASCE, Wikipedia 

The word infrastructure is a combination from the latin prefix "infra", meaning "below", and "structure". Typically the term refers to the technical structures that support a society, such as differents transport systems, water and energy supply, telecommunications, as well as social services such as schools and hospitals. From a functionally point of view, infrastructures facilitates the transport of people and goods, and allow to improve the production of goods, services. Infrastructures as a dynamisator of the economy

Infrastructures have a relevant impact on the economic development and have been used in some periods as an economic stimulus. However, the relationship between economic growth and infrastructures investment shows a lower rate of return in advanced nations.

According to all these ideas, in the definition and design stages of a suitable infrastructure's plan for an specific social and economic entity, the consideration of social and economic strategic factors and the special features about geography and demography are the basis foundations to fix the infrastructures and the investment needed.

During last decade, Spain was a country of excesses in a lot of aspects, but undoubtedly housing construction, power energy generation from renewable sources, and infrastructures plans were the most relevants. According to the statistics show by the International Transport Forum for the period 2000-2011, the  attached figure represents the evolution of the investment effort per capita for the main fourth economies of the euro area (motorways, railways and airports). This index has been determined as is showed in the example

Example:
Data:
-   Investment: 10.000 millions EUR
-   Population: 10.000.000 inhabitants
-   GDPper capita: 10.0000 EUR/year
Ratios:
-   Investment per capita: Investment / Population = 1.000 €/per capita
-   Investment effor per capita: Investment per capita / GDPper capita = 0,1. In base x 1.000 = 100
Meaning:
-   Per each 10.000€ of each inhabitant,100€ has been invested in infrastructures


Investment Effort per Capita in Transport Infrastructures


















Summarazing these figures for the period 2005-10:
 -   Spain:
.   Investments: 108.611 millions EUR   
.   Avg. investment per capita: 402 EUR
.   Avg. GDP per capita: 22.689 EUR
.   Investment effort: 18

-   France:
.   Investments: 106.300 millions EUR   
.   Avg. investment per capita: 286 EUR
.   Avg. GDP per capita: 30.026 EUR
.   Investment effort: 10

-   Germany:
.   Investments: 96.478 millions EUR
.   Avg. investment per capita: 196 EUR
.   Avg. GDP per capita: 29.038 EUR
.   Investment effort: 7

-   Italy:
.   Investments: 105.649 millions EUR   
.   Avg. investment per capita: 296 EUR
.   Avg. GDP per capita: 25.038 EUR
.   Investment effort: 12

All these figures clearly prove the enormous investment effort developed by Spain during the "Spanish miracle decade", Thus,  1,9 times more than France, 2,6 times more than Germany and 1,5 times more than Italy.To close this epigraph I would like to compare Spain and Japan. Since Shinzo Abe started the management of the third economy of the world (127 millions inhabitants and a per capita GDP of 36.000 EUR), it has supposed a complete turnabout in the country, thus, the infrastructure plan for 2014 has fixed an investment plan of 41.804 millions EUR. To compare this amount with the infracture spending plan of Spain, in 2006, Spain spent more than 46.000 millions EUR in public construction, indeed, in 2009 the amount achieved 39.761 millions EUR. In addition we have to consider the tsunami of Fukushima.

An example that clearly reflects the "strange way to understand the infrastructures in Spain" can be explained analyzing these two projects:
  • High speed train to connect Asturias with Madrid (50Km): currently cost has achieved 3.000 over 1.000 millions EUR budgeted (+info)
  • New Panama's Channel to connect the Atlantic and Pacific Oceans: currently cost around 3.000 over 2.300 millions € planned (+info)
Is there any correlation in the benefits that these two projects will provide to the society in each country, Spain and Panama? I really think there is no need more details to answer it.

Another clarify example of this "strange way" is trying to explain the investment return in the high speed train infrastructure. According to the figures published by Eurostat about the performance of this kind of infrastructure (2011):

-   Spain: 
.   Km high speed train network: 2.144
.   Passanger per Km: 11,2

-   France: 
.   Km high speed train network: 2.036
.   Passanger per Km: 52,0

-   Germany: 
.   Km high speed train network: 1.285
.   Passanger per Km: 23,3

-   Italy: 
.   Km high speed train network: 923
.   Passanger per Km: 12,3

Last examples of this "strange way" is the motorway network of Madrid that have been built during last decade (+info), all the network has been declared in bankarrupcy and will need the support of public fundings of over 4.000 millions EUR. This network was designed with the support of private capital over long term concessions with the consignature of the Spanish government.

I would like to extract some comments from the report, Anti-Corruption from the European Union (+info). In this document (Feb'14) the European Commission claim that "big amounts" invested in "infrastructures and civil engineering" created a special context, where the number of complaints of corruption in city planning projects has multiply over the last 10 years. In some cases, these involve illegal financing of political parties and misappropiation of big amounts of public funding..

***

Planes de infraestructuras centralistas versus dinamizadores (ejemplo imperio otomano)
Interior versus exterior (emprendedurismo versus capitalismo castizo)

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