The leading forum on public and private partnerships (PPP) in Latin America and the Caribbean kicked off on Wednesday in this Dominican tourist town.
The focus of the PPP Americas 2019, which is being held at the Paradisus Palma Real resort in Punta Cana, is on the need to boost cooperation on infrastructure projects and address the pressing challenge the region faces in that area.
Countries pay the price for not investing in infrastructure in the form of lower growth levels, Alexandre Meira da Rosa, vice president for countries at the Inter-American Development Bank (IDB), said in his opening remarks on Day 1 of the event.
Greater quantity and quality of infrastructure services are needed, he added, noting that the involvement of the private sector is absolutely essential considering the amount of financing required.
Meira da Rosa said the region currently invests only around 3.5 percent of its gross domestic product (GDP) annually in infrastructure, well below the estimated 5-6 percent of GDP that studies have shown are needed to achieve an adequate level of development.
That means the annual shortfall in terms of needed infrastructure spending in the coming years will amount to roughly $150 billion region-wide.
For his part, Dominican Finance Minister Donald Guerrero hailed his country's economic success story in recent years, including strong growth rates and poverty reduction.
In his opening remarks, Guerrero recalled that Dominican President Danilo Medina's administration recently submitted a bill to Congress on PPPs that is aimed at strengthening the institutional framework for these types of projects.
PPPs are mechanisms that allow a level of investment spending that exceeds government budgetary restraints and help countries make progress toward sustainable and inclusive growth, the minister said.
According to the IDB, the private sector has enormous potential considering that it accounts for roughly one-third of total infrastructure investment.
The forum, which has brought together more than 500 public-sector representatives and private investors from across the region, is being organized by the IDB and its private-sector arm, IDB invest, along with the Dominican government.
Since 2006, the IDB Group has approved more than $5.8 billion for the development of different projects in the region under PPP arrangements.