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Looking ahead

A book of case studies and guidelines drawn from experience is by definition historical. Much of value for the future can be gleaned from history, but the fact remains that conditions in most developing areas in the world are changing very rapidly, especially in Latin America and the Caribbean. This book would therefore not be complete unless it identified some of the major development challenges and speculated about how the regional development planning methodologies presented here may have to be gradually adjusted. Appropriately, this approach underscores a fundamental conviction that development planning must be as dynamic as development itself.

I. Trends in Latin American Development in the 1980s

The current decade is already characterized by economic stagnation, severe problems of foreign debt, reduced government spending, widespread unemployment, and social unrest. The constraints imposed by physical resources are becoming very evident in many countries and natural resource management problems are demanding serious attention. Also of great importance are major population shifts within countries and, in some cases among countries.

The following section discusses these three major sets of problems in very global and simplified terms as background for predictions about needed changes in regional planning methodology.

A. Economic Constraints in the 1980s

Latin America is facing severe economic recession, limited or no economic growth and massive foreign debt, Exports have decreased in response to a fall in demand in the industrialized countries and protectionist pressures. Debt repayment is difficult and external funds for new investments are becoming increasingly scarce.

In all likelihood, foreign capital will continue to be scarce for the remainder of the decade, thus forcing Latin American countries to depend heavily on indigenous capital for development. Growth and development will probably continue to be slow, and both internal consumption and investment will grow at slower rates than in the 1960s and 1970s.

These new development prospects will probably induce important development policy changes in many countries. Governments will postpone many capital investments in large development projects until financial conditions improve. With large external debts to pay, governments will gravitate toward modest projects that produce or save foreign currency and toward export-production and import-substitution projects. Most likely, the number of "patch up" projects will increase and the number of "structural change" projects will decrease.

B. Physical Resource Constraints in the 1980s

Latin America in the 1980s must cope with an expanded population and the aftermath of the rapid economic growth that took place during the 1960s and 1970s. Supplying the needs of rapidly growing populations, while attempting to raise millions above the level of poverty, will continue to be the central concern of most governments. But more and more physical resource constraints will be a cause for concern and a focus of development planning. In the 1980s, four major types of problems loom particularly large: 1) problems caused by deforestation of large areas of Latin America; 2) water resource development problems, including water supply shortages for industry, agriculture, and domestic use, as well as pollution of surface and groundwater and an increased flooding as a result of deforestation; 3) deterioration of soil resources and significant losses of productive agricultural land through erosion and salinization; 4) urban development problems that reflect increasing limitations on clean air, clean water and space.

C. Migration Dynamics in the 1980s and its Implications

The structural changes occurring in the economies of Latin America and the Caribbean, as well as physical resource constraints, will combine to increase competition for the use of national territory to fulfill economic and social goals. Pressures will be especially acute in the smaller countries with high population density in relation to physical resources and in regions of larger countries with similar problems. In many places, space suitable for development with modest investment is becoming scarce.

Among the results of these pressures will be continued heavy migration of population to cities, movement into less populated regions, and accelerated migration between countries. In many cases, the migrants are economic refugees, and in a few cases they will include political refugees. These population shifts will aggravate existing shortages of food, water, energy, and social services in areas where the migrants congregate. Localized population growth will clearly put new stresses on the physical resource base and pose new challenges for environmental management. Governments will be hard-pressed to develop new infrastructure (water supply and sanitation, energy production, roads, ports, urban facilities) since funds to finance it will diminish. Urban development problems will become particularly critical as large populations in search of employment take up a marginal existence in or near urban centers. According to the Inter-American Development Bank,1 urban population is expected to grow from 224 million in 1980 to 322 million in 1990. The problems associated with "urbanization" in Latin America will probably reach crisis proportions by the end of the decade, if not before.

1. The Role of the Bank in Latin America in the Decade of the Eighties. Table III-1. IDB, Washington. D.C., 1981

II. New Requirements for Regional Development Plans and Projects

These conditions will establish some new requirements for regional development plans and will affect the kinds of investment projects that will be possible in the 1980s. The practice of regional development planning will have to adapt to these trends and changes if it is to fulfill a useful role in the development process.

A. A Modified Focus for Regional Development Plans

Based on the foregoing analysis, the focus of planning efforts in the late 1980s is likely to shift, and certain types of regions will receive greater attention than in the past while others receive less:

1. Relatively developed regions where the major infrastructure is already in place will probably receive renewed attention for development planning.

2. Conversely, regions that require massive investments in infrastructure - such as remote areas without roads, power, etc. - will probably be lower development priorities. Empty regions will be the focus of major development efforts only if the required government investments are low and the benefits are substantial. (Unfortunately, this trend may further stimulate the "cheap" spontaneous colonization of accessible marginal areas, which entails unfavorable environmental consequences.)

3. Regions composed of urban areas and their hinterlands could well become the focus of major regional planning efforts as larger investments are planned to accommodate urban growth and solve urban problems.

4. Multinational regions, such as border areas, may receive increased attention as nations discover that the least expensive development options cannot always be found entirely within a country's boundaries. Multinational planning sometimes will be required to capitalize on these options, as well as to deal with conflicts over resource use.

B. A Modified Focus for Investment Projects

If the capital shortages evident in the early 1980s continue, different types of development projects and plans will be necessary:

1. Emphasis will shift from the creation of new infrastructure to the better use of existing infrastructure or to the creation of small additions that can substantially improve the existing infrastructure's social usefulness. (Such additions include, for example, connections to telecommunications networks or construction of stretches of roads that complete important main routes.)

2. Institutional or legislative changes that require little or no additional investment, but may significantly affect the dynamics of a region, will be emphasized.

3. Programs and projects already under way will have more priority than usual over projects that are still on the drawing board. By the same token, projects to complement or supplement existing programs and projects will have preference over completely new ones.

4. Small, low-cost alternatives to large projects will be sought. For example, small energy-generation projects based on local resources will be preferred to high-cost electrical connections to remote villages or towns. Similarly, energy-conservation projects will be appealing alternatives to increased energy generation.

5. Projects that produce foreign exchange will be needed to help reduce most developing countries' foreign debt. The planning challenge is making sure that such projects do not divert basic necessities from local populations or otherwise prejudice their well-being.

III. Specific Adjustments in Regional Development Planning Methodology

The foregoing prognostication has some obvious implications for the use of the integrated regional development planning methodologies described in this book. Hence, it is important to indicate the probable changes in methodology, some of which are already underway.

1. The constant effort to shorten the diagnosis phase of development planning will be given added impetus by a shortage of funds for studies and a reduced need to identify major new investment projects. This trend may be partly counterbalanced by more in-depth analysis of projects that are already scheduled for implementation but that can be made more efficient.

2. Energy as a critical ingredient of regional development is already receiving greater attention in development diagnosis and new methodologies will have to be developed to rapidly evaluate energy demand and supply in geographic terms, to identify efficient low-cost solutions to energy problems, and to prepare comprehensive spatially oriented investment plans for energy production and distribution.

3. Food supply and distribution problems will receive larger attention, so more projects will have to be identified to deal with these issues as part of a regional development strategy.

4. Methodologies for dealing with conflict resolution in the use of natural resources will have to be further refined to deal with problems involving more than one country. A case in point is the. problem of transfrontier pollution, which is becoming serious in some places. Only governments acting cooperatively can solve the problem. (Air, water pollution, and other problems along the U.S. Mexico border are already the focus of joint studies.) Similarly, distribution of water rights among riparian countries in international river basins is becoming a major issue. The participation of international technical assistance organizations may be appropriate to assist riparian countries in identification of alternative uses and distribution arrangements and in giving advice about establishment of institutions for administration and monitoring of international waters.

5. New methods for dealing with the critical problems of urban growth are needed. Especially critical are new mechanisms for evaluating the carrying capacities of the natural resource systems that support cities since a clearer understanding of the resource base is needed to improve the efficiency of urban investments.

6. Migration within and between countries now involves political as well as economic refugees. To accommodate both, new methodologies for planning longer-term settlements of refugees are needed to make settlers more self-sufficient and to reduce the burden on the host country and international donor agencies.

7. Defenses against natural disasters should be built into regional development plans. The keys here are incorporating better risk-assessment information and designing development projects to minimize damage to investments in the event of flood, earthquakes, hurricanes, and other disasters.

8. More attention will have to be devoted to preparing proposals other than those for investment projects. Recommendations for tax incentives, pricing changes, modification of regulations, and improvement of management capability of development institutions will take on added importance. Institutional improvements may be designed to substantially increase the efficiency of use of available financial resources,

9. The evaluation of investment projects and the preparation of action plans is likely to become more sophisticated. The need for more integrated economic analysis may lead to increased use of regional simulation models to both formulate and evaluate development programs and projects. With models that depict the economic relationships within the studied region, and between the region and the rest of the country, planners can study the impact of groups of projects, as well as individual projects, on the region and the country. These models will also help decision-makers accept or reject projects and groups of projects on the basis of selected indicators that reveal development impacts.

10. The increased use of systems analysis and computers in handling the increasing volume of data needed for integrated regional development planning seems virtually inevitable. Integration of data and professional inputs during planning is a central theme of this book. Unfortunately, as the fund of human knowledge increases and professional specialties become more narrow, the problem of integration becomes more difficult. Nowhere is this more evident than in dealing with issues referred to as environmental. To help people and institutions to interact effectively in dealing with these issues, technical assistance agencies as well as universities will have to offer the kind of broad multi-disciplinary training that will make more professionals effective integrators and team leaders. In addition, the simple integrative tools that are now applied may gradually have to be replaced by more sophisticated "systems" manipulated by computers.

11. Finally, some better means are needed for making the institution-building efforts of technical assistance more efficient. While in-service training works well, reaching all the state governments, regional agencies, and river basin authorities that could benefit from such service would take years using conventional methods. Helping development agencies to help each other and strengthening agencies that provide assistance to selected groups of countries will speed up the process of "horizontal cooperation".

IV. Some Long Range Challenges for Regional Development Planning

Beyond the short-term methodological adjustments outlined here lie more profound challenges to governments and international institutions. The future of technical cooperation in regional development depends upon the success with which new problem-solving techniques are applied to the following emerging needs:

1. Promotion of concepts of regional planning within national economic and social development planning so as to deal more effectively with the geographic balance of the growing demands for employment and basic needs.

2. Establishment of functional links between regional planning and national and sectoral planning.

3. Substantial improvement of regional development implementation by strengthening of regional institutions.

4. The definitive integration of environmental issues into standard regional development methodology followed by further clarification of practical tools for regional environmental management.

5. The introduction of regional programming as a method for designing and implementing development projects on behalf of major development-financing institutions,

Success or failure in dealing with these challenges will determine the continuing validity of the integrated regional development planning approach. Success or failure in dealing with some of these issues may determine the future of development itself.

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