How Could Artificial Intelligence (AI) Make a Rewardingly Productive Difference in Infrastructure in Latin America and The Caribbean?

Artifical Intelligence (AI) as An Efficient Driver of Development in Latin America and Caribbean

By Alexander Riobo - Maria Pfeifer

The critical infrastructure sectors in Latin America and the Caribbean (LAC) face growing challenges that threaten their efficiency and sustainability.  Roads, power grids, water systems and public transportation networks show signs of aging and obsolescence, increasing maintenance costs and reducing the quality of services.

Against this backdrop, the Inter-American Development Bank (IDB) is exploring how artificial intelligence (AI) can be applied to infrastructure.  For example, in public transportation, route optimization algorithms are helping reduce travel times and congestion.  In water and sanitation, predictive models make it possible to detect leaks and anticipate outages in distribution networks.  In energy, AI is used to forecast demand and facilitate the integration of renewable energy at scale.

These advances and lessons are covered in the IDB’s publication “AI from the Ground Up: Challenges and Opportunities in the context of Latin America and the Caribbean”, which presents real-world cases, recommendations, and practical guidelines on how AI can become a key tool to strengthen the region’s critical infrastructure.

Challenges for Our Infrastructure

Infrastructure in the region faces challenges such as aging physical structures, accelerated urbanization, population growth, and the impact of climate events.  The consequences include disruptions in essential services and rising costs of use, which lead to unequal access.

However, technology can help reverse these trends.  IDB estimates suggest that a 15% reduction in infrastructure service costs through the efficient use of digital technologies could increase the GDP of Latin America and the Caribbean by 6% over the next 10 years.

How AI Can Make a Difference in Infrastructure

Although more than 40% of public agencies in transportation and energy in LAC lack a clear digital transformation strategy, any entity can implement AI-based projects.  In critical infrastructure sectors, the implementation of machine learning models is already within reach for many governments and organizations.

Some concrete examples show this potential in the region across three areas:

• Energy: AI systems predict consumption patterns and help balance supply and demand, facilitating the integration of intermittent renewable energies such as solar and wind.
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• Water and sanitation: Predictive models supported by smart sensors allow detection of invisible leaks and anticipation of pipe ruptures, reducing water losses and maintenance costs.
• Transportation: Traffic optimization algorithms help reduce congestion and improve route efficiency in urban public transport.
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Effective AI Adoption

The report offers the following recommendations to unlock AI’s potential in critical infrastructure sectors:

• Adopt agile methodologies that include proof of concepts, prototypes, and minimum viable products.  These tools make it possible to experiment with AI-based solutions before scaling them.

•  Establish organizational structures that drive AI adoption, ensuring that teams have the necessary technical skills.

• Data quality determines the success of AI projects.   Building high-quality data requires identifying sources, designing efficient data flows, and ensuring adequate architectures for storage and processing.

• Evaluate infrastructure requirements from the outset, especially storage and computing capacities needed for AI models.

• Ensure that AI models address specific and measurable problems, based on data quality, computing capacity, explainability, and performance.

• Incorporate ethical principles from the design stage, addressing privacy, security, and transparency to build trust in solutions.

AI as a Driver of Development

We invite you to explore these recommendations in detail in “AI from the Ground Up: Challenges and Opportunities in the context of Latin America and the Caribbean.”

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Now is the time to build a digital lifeline – before the next disaster hits

Secure and resilient internet infrastructure is a fundamental necessity

The world needs a digital lifeline

By RICCARDO PULITI

This piece was originally published on Project Syndicate on July 19, 2022.

In periods of crisis, digital technologies provide a lifeline that keeps people, communities, and businesses functioning.  From the COVID-19 pandemic to violent conflicts and natural disasters, being connected has allowed us to continue working, learning, and communicating.

How policymakers have responded to these emergencies has played a large part. In particular, as a new paper by the World Bank Group’s Development Committee shows, more agile regulation has accelerated digitalization and unleashed innovation.  In today’s global context of several overlapping crises, this needs to become the norm.  Secure and resilient internet infrastructure is a fundamental necessity.

During the pandemic, as more and more of our lives went online, internet usage spiked worldwide. In 2020, 800 million people went online for the first time, and 58 low- and middle-income countries used digital payments to deliver COVID-19 relief. 

To manage that surge, governments and regulators in more than 80 countries moved quickly to change rules, including those governing the allocation of radio spectrum – the electromagnetic waves used for wireless communications.  In Ghana, regulators assigned temporary radio spectrum to networks in high demand, and all mobile-service providers were granted permission to expand coverage.  This resulted in better-quality service for more than 30 million mobile subscribers, letting them “go” to work, learn online, and access essential services.

Agile regulations have also helped digital technologies offer critical support to people in fragile and conflict situations.  In Ukraine, the presence of a strong internet connection through satellite links, even while terrestrial infrastructure is under attack, has enabled the government to communicate with its citizens in real time.  At the beginning of the war, shelling and cyberattacks were predicted to take down the internet, but innovations such as the satellite hookups have kept the country online.  Here, too, the Ukrainian government moved quickly to speed up permissions and adapt rules.

But a digital lifeline is effective only if it is safeguarded from cyberattack, something that Ukraine knows well.  For many years, the country has been a testing ground for strikes on infrastructure.  Hackers carried out waves of attacks that hit Ukraine’s distribution centers, call centers, and power grid.

And it’s not just Ukraine.  All countries are vulnerable to these incursions.  The United States fell victim to cyberattacks last year that took down its largest fuel pipeline, leaving many Americans in long lines to fill their gas tanks.  And in Africa, Kenyan internet users endured more than 14 million malware incidents in 2020.

Like cyberattacks, nature can cause damage to communications infrastructure that demands an agile reaction.  A volcanic eruption in January this year sent the island nation of Tonga into digital darkness.  The eruption cut Tonga’s single undersea telecom cable and threw the country into 38 days of isolation from the internet and much of the outside world.  This crisis has prompted discussions about how to strengthen the network and emergency-response systems, so Tongans are not at risk of digital darkness again.

To mitigate such vulnerabilities, unleashing digitalization needs to be a high priority even in periods of relative calm.  Potentially transformative yet fast-evolving technologies require policymakers to promote financing, regulations, and institutions that make it easier to test out new ideas in real life.  Some countries are starting to make progress.  Kazakhstan is using agile regulation to digitalize, decentralize, and decarbonize its vitally important energy operations.

Unlocking the potential of digitalization for the masses through well-targeted regulation can also help close the digital divide and improve welfare.  

Recent research has shown that the availability of cheaper internet access increases employment among low-income households.

Countries such as Saint Vincent and the Grenadines and Malaysia provide low-cost plans for poorer users.  

Digital access is essential for people all over the world, especially residents of under-connected rural areas, the poor, women, and the displaced.  In Nigeria and Tanzania, poverty rates fell by seven percentage points in areas with internet connections.

With the world facing multiple emergencies, policymakers need to mobilize digital connectivity to improve the daily welfare of the most vulnerable populations.  Right now, innovation is moving so fast that many officials, especially in developing countries, are finding it hard to keep up and ensure that the benefits of digitalization reach the people who need them most.

But we should not need a crisis to accelerate the transformation.  Now is the time to build a digital lifeline – before the next disaster hits.

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Read more about the World Bank’s work on digital development and the digital lifeline that proved crucial in the pandemic in this recent paper on digitalization and development.

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