The World Bank has advised Latin America and Caribbean (LAC) countries to focus heavily on improving infrastructure and human talent in cities to increase economic performance.
While the productivity of LAC cities is on par with the global average, it lags far behind many US and European cities.
“Not only does the region lag other countries, but some cities lag others within the same country,” the report noted.
Considering the report, Latin America does have a significant amount of skilled human capital, but a large majority of them are concentrated in a few large cities, to the detriment of the smaller ones.
Therefore, the bank argues, governments should make it a priority to close the shortfall of skills and ensure that both small and large cities can be attractive places for talented workers to live and work.
Almost three-quarters of the LAC region’s population lives in 7,197 cities, most of which lack basic infrastructure.
Lack of infrastructure curbs business activities, leaving cities with a greater number of unemployed young people and high crime rates.
“It is important to create an enabling environment for cities to live up to their potential,” said Maria Marta Ferreyra, World Bank Senior Economist and one of the authors of the report.
“That involves improving urban infrastructure, including roads, utilities, and communication networks. It also involves, better urban planning and management, improving the quality of the local business environment, reducing crime, and making cities of all sizes attractive for skilled individuals.”