Our Untapped Wealth: Toward Modern Management of Public Assets
The value of the assets owned by Latin American and Caribbean governments could exceed half of their economic production. These assets, including everything from public buildings and infrastructure to vehicles, forests, and cultural heritage, are non-financial public assets, representing unexplored wealth that could greatly benefit the region. However, their potential to promote sustainable development, transparency, and quality of public services is often limited by a lack of effective management. This publication presents a rigorous and updated analysis of public asset management in the region along with concrete proposals to improve it. The first chapter explains the importance of efficient asset management. It presents an analytical model with the basic components of an optimal system, covering governance (policies, regulations, institutions), availability of records and information, stable financing, risk management, performance measurement, and strategic planning. Arguably, the implementation of this type of system could increase tax revenue, environmental sustainability, transparency, and quality of citizen services while promoting economic development and reducing operation and investment costs. The second chapter presents the successful case study of New Zealand, which three decades ago implemented a comprehensive reform of the accounting and financial management of its assets, allowing the country to optimize their use and valuation. The third chapter focuses on the local level of government, drawing lessons from the experiences of Boston, Copenhagen, and Hong Kong, which have been able to leverage their commercial assets to finance their investments.