Services and connectivity supporting rural areas in Chile

Infrastructure

The Ministry of Public Works (Ministerio de Obras Publicas/MOP) plays an important role in rural development with competences in providing infrastructure needs for transportation (roads, big dams, ports, airports) and for water provision. Private concessions are also possible and the ministry is also responsible for implementing infrastructure contracts through third parties. Currently, MOP has an integrated planning model with territorial approach that includes three levels:

  • • At the national level, the Master Plan for Infrastructure is a strategic sectoral plan based on attaining national goals over a 20-year time horizon.
  • • At the regional level, regional plans for infrastructure and water resource management must conform to guidelines of the regional master plan, master plan and the long term master plan for infrastructure which in turn is framed within the national long-term vision. It is an instrument of medium-term planning, with a horizon estimated approximately for 8 to 10 years.
  • • Finally, special plans respond to defined lines of action and are designed to help the achievement of some specific goals or special territorial developments and infrastructures.

Public Works Ministry invests more than half of its budget in rural area, through 32 programmes, among these programs can be mentioned:

• The Rural Water Supply Programme (Agua Potable Rural, APR) dates back 48 years since its implementation, and has provided drinking water to 100% of the rural population living in rural concentrated areas. The programme first prioritised rural concentrated areas and once 100% of coverage for these areas was reached, investments and subsidies shifted their focus to rural semi-concentrated areas and on maintaining, improving and conserving existing systems. The programme targets only rural areas with low incomes and excludes those areas dominated by second homes, condominiums, resorts and touristic sites. The programme promotes local participation and self-management in the operation and maintenance of rural drinking water systems, which has been a key element to fulfilling the social objectives of the programme. [1]

both economic, due to higher transport costs for firms and consumers, and social, reflecting more difficult access to public goods and services. The cost-benefit methodologies applied by the Ministry of Social Development to assess public infrastructure projects, limit the ability of state agencies to invest in peripheral, remote and isolated areas in the country. It would be desirable to advance the applying other criteria that would yield towards greater territorial equity. "

Improving accessibility of remote and isolated areas is therefore very costly, especially on a per capita basis. These costs must be gauged against their benefits, both in terms of service provision and aggregate economic impact. This task is currently made even more difficult in Chile by the current definition of rural, which only defines one type of rural area and does not recognise differences in access between remote rural regions and those rural regions close to cities. The revised definitions proposed in Chapter 1 that suggests three types of rural regions allow the establishment of strategies for rural development that better align infrastructure needs to the territorial characteristics in different types of rural areas.

A key challenge in Chile, as in other OECD countries, lies in the low participation of the private sector in funding infrastructure projects in rural areas (Figure XX). The Concessions Program has financed specially infrastructure in the central and/or consolidated regions. Infrastructures, like rural roads, small fisheries ports and small airports have been excluded. Even the Austral route (7) has not received funds from Concessions. Therefore, private investments in rural infrastructure are needed but difficult to obtain by the arguments indicated. The National Rural Development Policy should therefore encourage the development of new funding mechanism that can increase the private participation in funding infrastructure projects.

Table 2.6. Private sector participation in infrastructure, as a % of GDP

2005

2006

2007

2008

2009

2005-09

Argentina

0.5%

1.5%

0.9%

0.8%

0.5%

0.84%

Brazil

1.2%

1.1%

1.4%

1.9%

2.5%

1.62%

Chile

0.8%

0.3%

0.6%

0.4%

1.0%

0.62%

Colombia

0.6%

1.9%

1.0%

1.2%

0.5%

1.04%

Mexico

0.6%

0.7%

1.0%

0.5%

0.5%

0.66%

Peru

1.0%

1.6%

1.9%

1.2%

1 .4%

1.42%

Rest of Latin America and the Caribbean

0.7%

0.9%

0.9%

0.6%

0.4%

0.7%

Note: Infrastructure in energy, transport, telecommunications and sanitation.

Source: Shwartz, J. (2012), “Tendencias recientes en el financiamiento de APPs en America Latina y el Caribe”, PPIDatabase, The World Bank, Washington, DC.

  • [1] The Infrastructure Plan for Connectivity of Indigenous Communities in RuralAreas: The purpose of this plan is to contribute to raise socio-economic and livingstandards and facilitate the integration of indigenous peoples living in rural areas,thereby recognising the multicultural character of Chile. In light of the importanceof indigenous issues, it is appropriate to extend the coverage of this plan beyondthe single road connectivity, incorporating other services and a larger budget. • The Programme for Basic Roads aims to improve rural roads to enhance marketaccess in agriculturally based communities. It also targets the reduction of dustfrom non-paved roads. It is important to emphasise the participatory aspect of theprogramme, since individual communities prioritise the roads for improvement. • The Chiloe Plan is designed to substantially improve accessibility in the Chiloearchipelago by road, sea and air. This programme complements the RuralDrinking Water Programme and aims to improve economic development, qualityof life and help preserve the cultural heritage of the island. As in many OECD countries, the provision of infrastructure in rural regions facescommon challenges of high cost per user due to remoteness, low density, sparselypopulated areas and inadequate return under national cost-benefit criteria. Thesechallenges are particularly present in Chile given its peculiar geography and isolatedregions with difficult terrain, adverse climatic conditions, inadequate connectivity anddifficult access. The main consequences for rural inhabitants living in these territories are
 
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