Using data to connect Argentina's resource-rich north

Poor connectivity can strangle a region's economic potential, cutting communities off from jobs, markets and services. In many parts of the world, deteriorated infrastructure makes it harder to transport goods and people, limiting access to markets, services, and, ultimately, opportunities. A World Bank study on Argentina's Norte Grande, a region vital for food and mineral production, identified 20 key projects where enhanced connectivity can spur private sector dynamism and generate employment. 

The report, "Corridors for Development and Growth", analyzed various sources of data, from satellite images to climate data, employment statistics, and surveys of key users, to identify critical infrastructure gaps and develop a strategic investment plan for the region.  

Currently, less than a third of the road network in the Norte Grande is paved. Conditions are precarious along more than half of the provincial roads. For local businesses, this translates into logistics costs that are significantly higher than in neighboring regions. In fact, some producers spend a staggering 15% or more of sales value just to transport their products to market. 

The region's potential is being choked by a lack of connectivity; however, this is not limited to just road capacity and quality. To effectively support Norte Grande’s high-potential sectors, public policy needs to address both infrastructure and services gaps along the entire value chain.   

How we did it: Data-driven insights 

To identify the most impactful infrastructure investments, the report leveraged a variety of innovative data sources:

• Satellite imagery: High-resolution satellite images were used to assess the road network's condition, identifying areas with significant deterioration, and analyzing roads' vulnerability to climate

• Freight traffic data: Analyzing freight traffic patterns helped pinpoint key economic corridors and identify bottlenecks in the flow of goods

• Surveys to users: Representing priority value chains that contributed some 62 percent of the road freight originating in the region 

This data-driven approach allowed the prioritization of 15 road and five rail projects. These are expected to have the greatest impact on economic growth, social inclusion, and climate resilience.

These projects are expected to reduce transport costs by 20% or more on some of the prioritized roads and by over 40% on some of the rail links. Several of the road and rail projects would each generate over 4,000 direct, indirect, and induced jobs. A regional and national GDP boost of hundreds of millions of dollars in most of these projects.

Paths to growth: Lessons for a connected future

The story of Argentina's Norte Grande isn't unique. Today, the quality of transport infrastructure is a global key to economic development and poverty reduction. This study offers valuable lessons for other countries facing similar challenges:

• Pinpointing gaps with data: Using a combination of satellite imagery to map road conditions and vulnerability to climate factors, along with detailed surveys of businesses to understand their transport and logistics challenges, allowed the creation of a "Logistics Vulnerability Indicator" to show where connectivity is weakest.

• Choosing the best projects: A "Multi-Criteria Analysis" framework considers factors like demand, regional connectivity, ease of implementation, and climate benefits, ensuring investments deliver broad socio-economic advantages.

• Forecasting economic benefits: The various advanced models, adapted to the Norte Grande, provided interesting insights on the likely economic impacts and their distribution. For example, benefits would be much higher if projects were coordinated across provincial boundaries.  Beyond direct user benefits, the proposed road and rail works would generate thousands of direct, indirect, and induced jobs, with the latter representing most of the jobs generated. Finally, spatial distribution analysis showed macroeconomic benefits would expand to a wider region, beyond where work takes place.

In a time of increasing demands and limited resources, adopting data-driven approaches like the one in Argentina's Norte Grande is crucial. It's the path to building smarter roads and infrastructure that truly slashes shipping costs, improves logistics, and unlocks potential.