Does Infrastructure Reform Work for the Poor? A Case Study from Guatemala
Following the 1996 Peace Accords, Guatemala embarked on a major program of infrastructure reform involving the restructuring and privatization of the electricity and telecommunications sectors and a substantial increase in infrastructure investment...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2004/01/2872995/infrastructure-reform-work-poor-case-study-guatemala http://hdl.handle.net/10986/13877 |
| Summary: | Following the 1996 Peace Accords,
Guatemala embarked on a major program of infrastructure
reform involving the restructuring and privatization of the
electricity and telecommunications sectors and a substantial
increase in infrastructure investments partially financed by
privatization proceeds. As a result, the pace of new
connections to electricity, water, and sanitation services
increased by more than 40 percent. Moreover, households in
traditionally excluded sectors-the poor, rural, and
indigenous populations-were twice as likely to be the
beneficiaries of a new infrastructure connection than they
had been prior to the Peace Accords. The teledensity index
increased by a factor of five from 4.2 in 1997 to 19.7 in
2001, largely because of the growth in cellular telephones,
which now outnumber fixed lines. The number of public
telephones in rural areas increased by 80 percent since the
Peace Accords, so that 80 percent of rural households are
now within six kilometers from a public telephone. Although
real electricity tariffs increased by 60-80 percent
following the reform, residential consumers have been
shielded by a "social tariff" policy that has kept
charges at pre-reform levels. This policy, which costs US$50
million a year, does little to benefit poor households. The
reason is that 60 percent of poor households are not
connected to the electricity network, and those that are
consume modest amounts of electricity and hence capture only
10 percent of the total value of the subsidy. In contrast,
poor households without access to electricity pay about
US$11 a kilowatt-hour (or 80 times the electricity tariff)
to light their homes with candles and wick lamps. The
resources used to finance the "social tariff"
would therefore be better used in further accelerating the
pace of new connections for currently underserved households. |
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