In 2012 an IDB study reported that a 10 percent average increase in broadband penetration in Latin America would yield a 3.2 percent increase in GDP, 2.6 percent greater productivity, and 67,000 new jobs. However, Latin America and the Caribbean weren’t (and still aren’t) enjoying these benefits because of their poor access to broadband.
Countries of the OECD had five times more fixed broadband lines installed per 100 inhabitants (30 lines per 100 inhabitants) than the countries in Latin America and the Caribbean (6.2 lines per 100 inhabitants), as of 2012, according to the International Telecommunications Union. The problem is even worse when these data are analyzed at the individual country level.
The broadband access gap persists at three levels: between the Region and the OECD countries; among the different countries of the Region with stark differences in penetration and scope of the problem; and between urban and rural areas within the same country.
In 2013 the Bank approved the Broadband Initiative to address the gap in broadband access in Latin America and the Caribbean as a response to the growing demand from the Region for technical cooperation in this area.
The IDB Broadband Initiative promotes an institutional and regulatory environment that facilitates competition and investment to increase access, speed, and use of broadband Internet in the Region. The initiative includes a conceptual framework based on four pillars representing the Region’s greatest challenges: develop public policies; develop a strategic regulatory framework; deploy infrastructure; and build capacity.
To date, the Broadband initiative has produced 56 technical cooperation projects financed both by Ordinary Capital through the Bank´s Broadband Fund and other funding sources such as the Korean Fund. Resources for these projects amount to about US$23 million. These resources have funded regional projects in the Andean Community, Central America and the Caribbean, and the Region as a whole. They have also funded specific projects in Bolivia, Costa Rica, the Dominican Republic, Ecuador, Honduras, Mexico, Nicaragua, Panama, Paraguay and Peru.
The Initiative has had seven main results: (i) establishment of national broadband plans for 17 countries; (ii) the development of a broadband index for the Region (DigiLAC), that consolidates information on challenges, opportunities, and scope for broadband development; (iii) a training center on broadband for Central America and the Dominican Republic (CEABAD), which provides specialized training to government officials on select broadband topics; (iv) a number of South-South Cooperation and innovation events such as the digiLAC Hackathon4; (v) two ministerial forums that addressed country challenges related to access, affordability, and capacity building for broadband development; (vi) a Broadband Policy toolkit for the Region in partnership with the OECD; and (vii) a loan operation to increase connectivity in Nicaragua. In addition, the IDB acted as a neutral broker to promote and facilitate dialogue between governments and private sector to develop broadband in the Region.
Until now, all resources have been channeled towards improving the supply side since an adequate broadband infrastructure is essential to increase the demand for broadband services. In those countries with a good base of broadband infrastructure, the Bank continues to work with its partners on designing innovative solutions in such areas as e-health, e-learning, and e-government.