A Balance and Projections of the Experience in Infrastructure of Pension Funds in Latin America

As defined by the Royal Academy of Spanish Language, infrastructure is any set of items or services deemed necessary for the creation and operation of any organization. From our point of view, we consider economic infrastructure to be those that are intended to contribute to the production and transportation of goods and services (e.g. roads, ports, airports, railways, water pipes, gas, electricity, etc.). On the other hand, we consider social infrastructure that which is indirectly part of the production process, and that stands out for its social value (e.g., hospitals, colleges and universities, prisons, etc.). Historically, a large proportion of the financing and management of infrastructures in the world has relied on direct state involvement as part of their duties. However, influenced by two important trends, the reality of our times has led to an evolution of that perspective: First, there is a greater emphasis on achieving higher levels of efficiency, transparency and accountability of State managed resources. This has increasingly highlighted the importance of market incentives and legal certainty for investors. That is without prejudicing its regulatory role and while continuing to act in the best interest of the state. Second, budgetary constraints imposed by the structural growth of key components of public expenditure, and the difficulty of continuing to raise the tax burden in countries with higher taxes in order to maintain a fiscal balance, also taking into account the fact that countries and financial markets have a greater sensitivity to increasing public deficits.