Investments in infrastructure – transport, irrigation, energy and information and communication technology – are crucial to achieving sustainable development.
Bolivia has historically had very low rates of investment (about 15% of GDP), but during the last 10 years, Gross Fixed Capital Formation (investment in roads, etc) has increased significantly (a 150% increase in real terms during the 2006-2016 period, compared to a 21% increase during the previous 10-year period), mainly due to a significant increase in public investment. Gross Fixed Capital Formation in 2016 amounted to more than USD 7 billion.
However, there is no system in place to evaluate the quality and social returns to these large investments. The biggest share of public investment goes to road building, but the majority of road building projects during the last decade have suffered from severe problems, with none of them finishing on time and within budget, and many of them having experienced resolution of contracts due to insurmountable problems. Some finished projects have demonstrated severe and very dangerous deteriorations already within the first year after completion1.
According to the SDG Index 2017, this is the one SDG out of all 17 where Bolivia performs the worst2.
While investment in infrastructure is crucial, it is even more crucial that the investment is directed towards projects with high social returns. Even a small improvement in the average quality of investments, could imply hundreds of millions of dollars in benefits for Bolivia.