IDB launched DigiLAC, a new platform for measuring broadband penetration in Latin America

Washington, May 15, 2014.- Latin America and the Caribbean lag far behind developed countries in broadband penetration, according to a new index launched by the Inter-American Development Bank. It finds Chile, Barbados and Brazil in the best position to take advantage of this vital development tool.

The 26 countries of the region included in the index posted a score of 4.37 on the Broadband Development Index. By comparison, the countries of the OECD rate an average of 6.14. Chile leads the regional ranking with a combined score of 5.57, followed by Barbados at 5.47 and Brazil with 5.32.

The index brings together 37 indicators, each with a score ranging from 1 (least development) to 8 (most development), to come up with the overall index. The indicators are chosen on the basis of four pillars: public policy and strategic vision, strategic regulation, infrastructure, and applications and knowledge.

“In a modern society, broadband is the key ingredient of the public policy agenda for speeding up economic growth and reducing inequality,” said Antonio García-Zaballos, who is leading the IDB's broadband initiative.

According to a recent IDB study, a 10 percent increase in penetration of broadband services carries with it average rise of 3.2 percent in Gross Domestic Product and 2.6 percentage points in productivity.

The ranking can be found on the IDB's new DigiLAC web site, with data from all the countries of the region and more than 15,000 cities and towns. It was released as part of an IDB seminar on South Korea and the lessons that can be drawn from it for the development of Latin America and the Caribbean. South Korea has one of the world's highest degrees of broadband development.

The Southern Cone subregion has the greatest broadband penetration with a score of 4.87. The Caribbean is the region lagging furthest behind, with an index of 3.72. However, Central America scored 4.26, slightly surpassing the Andean region at 4.13.

DigiLAC also features maps with data on 13 infrastructure and socio-economic variables at the municipal and department level in the countries that were studied.

For people to benefit from broadband access to the Internet, companies, lawmakers, regulators and other actors with influence must work together to tackle the digital divide that exists between the region and the world's most dynamic economies, and between urban and rural areas in the countries measured by the index.

Broadband services have been rising in Latin America, with an annual increase of between 16 and 18 percent.

But the worst bottleneck for broadband is its high cost for users: nearly eight times what it is in the countries of the OECD. Added to this is a lack of coordination between the public and private sectors in developing a national digital agenda.

“It is essential to have the right regulatory frameworks so as to encourage competition, transparency and the legal security needed to stimulate the necessary investment,” García-Zaballos added.

DigiLAC is part of the IDB's Broadband Program, the goal of which is to promote an institutional and regulatory environment that facilitates competition and investment to speed up access to as well as adoption and use of broadband services in the region.