ILO is a specialized agency of the United Nations
ILO-en-strap
Governing Body

GB.273/ESP/4/1
273rd Session
Geneva, November 1998

Committee on Employment and Social Policy

ESP

FOURTH ITEM ON THE AGENDA

Job creation programmes in the ILO

(a) Employment generation for poverty reduction:
The role of employment-intensive approaches in
infrastructure investment programmes

Contents

I.  The employment challenge and the need for
employment-intensive growth

II.  Building the ILO's comparative advantage:
From special public works to the promotion
of sustainable and better-quality jobs

III.  Achieving the full potential of labour-based approaches

I.  The employment challenge and the need for
employment-intensive growth

The challenge of job creation

1. Despite progress in some developing countries, massive unemployment, underemployment and poverty characterize most low-income countries. According to some estimates, some 30 per cent of the world population continue to live in poverty.(1) In many regions of the world, millions of aspiring new entrants to the labour force face bleak job prospects. Those who are already employed usually have to contend with low wages and precarious employment. In the context of the growing informalization of employment, a large proportion of the labour force is engaged in low productivity activities in the informal rural and urban sectors. Even a higher rate of growth in the modern sector will not solve the problems of underemployment and poverty if there is no change in the overall pattern of investment and employment intensity of economic growth. Moreover, these negative trends in structural unemployment are accompanied by the political instability, localized armed conflict and economic and financial crises that have become recurrent phenomena in recent years.

2. The Governing Body has repeatedly called for "the design of policies and programmes for achieving employment-intensive growth". Policies to increase the impact of investments on employment, in association with operational programmes on labour-intensive infrastructure development, are key means of action available to the ILO to respond to this challenge. This discussion paper reviews the role of the ILO over the past two decades in promoting the use of employment-intensive methods in infrastructure investment programmes. In so doing, it documents how ILO interventions in this field have progressed from short-term job creation schemes to longer term programmes designed to: increase the impact of investments on employment; improve working conditions; and promote small and medium-sized enterprises. This work has also focused on community-based approaches to the development and organization of informal sector workers and on the involvement of the social partners.

3. The paper describes the strong comparative advantage built up by the ILO in this field, as well as the reasons why the Office has experienced difficulty, particularly in recent years, in keeping up with the demand for its services. The impact of the ILO's work in this area is highlighted, together with the reputation that it has gained among donors, including the international financial institutions. The paper also describes the specific advantages of this approach for the ILO's constituents and responds briefly to the criticisms that are sometimes raised. Finally, it reviews the future prospects for the Offices work in an area that offers an important point of contact between the ILO, its constituents and those responsible for economic and investment policy at the national and international levels.

4. The main principles of the work carried out in this area have been set out every biennium in the programme and budget. The activities undertaken have been reported to constituents regularly, especially in the Director-Generals reports on ILO activities. The paper also draws on a recent independent evaluation,(2) which emphasized the need "to give high visibility to the employment-intensive programme within the ILO and among its social partners". In responding to that comment, it is hoped that the paper will encourage consideration by the Committee on Employment and Social Policy on how this well-established and widely respected ILO tool can best be used to respond to the new challenges faced by constituents, while furthering the principles and values of the Organization.

The ILO's response

5. The role of public works in employment creation has a long history. The underlying concept of using surplus labour for the creation of productive assets offers evident advantages, particularly in countries with high levels of unemployment, underemployment and population growth, and where the cost of unskilled labour is low. Constituents have therefore regularly turned to the Office for policy advice and technical assistance in the application of employment-intensive techniques in infrastructure programmes.

6. The ILO's response has been the Employment Intensive Programme (EIP), which is among the best known of its technical cooperation activities. For the past two decades, with strong donor support, the ILO has constantly developed and updated its approaches to employment-intensive infrastructure works. These have had a profound influence on investment policy, employment and poverty reduction in over 35 developing countries, where often as much as 70 per cent of public investment is in infrastructure. In total, more than $500 million has been invested in ILO-supported projects, creating hundreds of thousands of jobs, building capacities in the private and public sectors and orienting investments towards badly needed, cost-effective and technically sound infrastructure works.

7. Through these interventions, the principal achievement of the Employment Intensive Programme in beneficiary countries has been to place the key concerns of job creation, poverty alleviation, enterprise promotion and the improvement of working conditions in the broader framework of employment and investment policy. Rather than make work schemes, the programme has demonstrated the potential for sustainable job creation through public investment programmes implemented by the private sector. In so doing, the ILO has built up a comparative advantage in the field which is acknowledged by donors, the international financial institutions and constituents alike.

8. There are several reasons for the choice of infrastructure investments as a strategic entry point and catalyst for employment-intensive growth. These include:

 

Box 1

Strategic importance of infrastructure investments
for employment creation and poverty alleviation

According to World Bank estimates, (3) developing countries invest some $200 billion a year in new infrastructure. Infrastructure typically represents about 20 per cent of total investment of developing countries and 40 to 60 per cent of public investment. (4) A considerable proportion of developing country investments in infrastructure are financed by donor agencies. The externally funded proportion of total infrastructure investments is generally more than 50 per cent, but can reach as much as 80 or 90 per cent in the least developed countries. (5)

Such investments represent an enormous and largely untapped potential for job creation. Many of these investments have a poor impact on employment generation and poverty reduction, but this is largely due to a bias towards equipment-intensive technologies and the dependence on imports and foreign exchange. As a result, the infrastructure that is produced not only falls short of its potential in terms of job creation, but is also often unsustainable in the longer term.

Various estimates have been made of the potential macroeconomic impact on employment of using a labour-based approach for the production of infrastructure. One of these, by a joint ILO/European Union mission to Ghana in 1993, considered that, if 20 per cent of public investment in the country and 10 per cent of private investment in infrastructure were to be executed using labour-based methods, then some $100 million a year would be available for labour-based investment projects. An additional 50,000 direct and 75,000 indirect jobs would be created, over and above those generated by conventional construction methods. These figures are particularly impressive when compared with the country's overall employment creation objective of 50,000 jobs a year.


9. As the potential of employment-intensive infrastructure works has gained broader recognition, interest in their use in times of hardship and crisis has also increased. The principal recent examples include:

 

Box 2

Cambodia

The assistance provided by the ILO in Cambodia is a good illustration of the contribution that it can make to the rebuilding of the economy in conflict-affected countries. Since 1992, in the context of the national Employment Generation Programme, ILO assistance has focused on three components:

  • employment-intensive infrastructure rehabilitation and maintenance;
  • the promotion of small enterprises and the informal sector;
  • vocational training for employment.

The target groups include women, the rural poor, demobilized soldiers, returnees from refugee camps and internally displaced persons.

Support is provided to the High-level Inter-Ministerial Task Force on employment-intensive infrastructure works (created at the initiative of the ILO programme and comprising 12 ministries) on the use of local resource-based approaches to infrastructure development and rehabilitation; the Ministry of Education for the planning, coordination and monitoring of vocational training; and the Association of Cambodian Local Economic Development Agencies for business counselling and training, credit provision and business opportunity identification.

Between 1993 and 1997, the principal achievements of the infrastructure component of the programme included:

  • the generation of over 2,700,000 workdays of direct employment, of which 43 per cent were for women, on the construction and rehabilitation of secondary roads, irrigation canals and the clean-up and maintenance of the World Heritage Site of Angkor;
  • the establishment of community-based management for the operation and maintenance of irrigation systems and other assets.

As part of its continuous dialogue with the Government of Cambodia, the ILO has recently developed a joint programme of action entitled Jobs for peace , which includes the promotion of basic workers rights and labour institutions, with particular emphasis on women, persons with disabilities and children.


The ILO's mandate to promote employment-
intensive growth

10. The importance of labour-based methods and public works programmes as effective means of promoting employment and reducing poverty has been recalled by the ILO's constituents on many occasions. For example, the Employment Policy Recommendation, 1964 (No. 122), proposes "measures to expand employment by the encouragement of labour-intensive products and techniques" including "research and dissemination of information about labour-intensive techniques, particularly in public works and construction". Furthermore, in a specific section on "Public investment and special public works programmes", the Employment Policy (Supplementary Provisions) Recommendation, 1984 (No. 169), proposes the implementation of "economically and socially viable public investment and special public works programmes, particularly with a view to creating and maintaining employment and raising incomes, reducing poverty and better meeting basic needs in areas of widespread unemployment and underemployment".

11. The continued relevance of the ILO's work in this field is borne out by the constant high level of demand from constituents for advisory services and technical cooperation activities, as confirmed by many country objectives statements.

12. The importance of employment-intensive programmes during economic transition and in times of crisis has also been emphasized on numerous occasions. The Tripartite Seminar on the Socio-Economic Implications of the Devaluation of the CFA Franc for French-speaking African countries (Dakar, 1994), its follow-up meeting in Yaoundé in 1997 and the Meeting on Social Responses to the Financial Crisis in East and South-East Asian Countries (Bangkok, 1998), have all reiterated the urgency of creating employment on a cost-effective and sustainable basis.

13. Moreover, the employment-intensive programme provides a very specific contribution to promoting employment and improving the quality of work. The ILO's role in this field has been widely acknowledged by ILO constituents and the international community. The most notable endorsement came in the Programme of Action adopted by the World Summit for Social Development (1995) where it is stated that the ILO "because of its mandate, tripartite structures and expertise, has a special role to play in the field of employment and social development". This same Programme of Action recommends "promoting patterns of economic growth that maximize employment creation" and "encouraging, as appropriate, labour-intensive investments in economic and social infrastructure that use local resources and create, maintain and rehabilitate community assets in both rural and urban areas".

II.  Building the ILO's comparative advantage:
From special public works to the promotion
of sustainable and better-quality jobs

14. Under the conditions of public sector interventionism which prevailed in many developing countries until the mid-1980s, employment generation programmes were generally implemented by governments and state agencies in the form of special public works or short-term job creation schemes. State-run programmes of this type were common in most of Africa, largely as a response to poverty and the succession of natural disasters which required immediate, short-term measures, including drought and famine relief and other emergency interventions for much of the 1970s and early 1980s. The aim of these schemes was to redistribute income to special target groups and, in so doing, to combat poverty and compensate for losses of income, assets and jobs.

15. In the late 1970s and early 1980s, the ILO was frequently requested to assist in the design and implementation of programmes of this type. Its response, through its Special Public Works Programme, was to design schemes using both social and economic criteria. To ensure that these schemes were efficient and productive, training was provided to the workforce and the necessary institutional capacity was developed in member States. The technical credibility which this first generation (1975-85) of ILO labour-intensive public works projects enjoyed with member States and the donor community was largely due to the results achieved on these grounds.

Private sector execution of public works

16. In the second half of the 1980s, the general policy environment changed. As greater emphasis was placed on economic efficiency and the development of the private sector, the ILO's approach to labour-intensive works developed markedly. From emergency, relief and special public works programmes, greater emphasis was placed on cost-effective, employment-based investments. In order to introduce employment objectives into mainstream investment programmes, labour-based approaches are recommended only where they are competitive with equipment-based approaches on both technical and economic grounds. Cost-effectiveness, technical feasibility and quality standards, alongside economic and social sustainability, have become the criteria for the choice and application of labour-based methods (see box 3).

 

Box 3

Men or machines

Much infrastructure that is indispensable for the functioning of a modern economy is by definition capital-intensive. For large-scale infrastructure projects, such as energy, telecommunications, airports or paved national highways, labour-based methods are no alternative to equipment-intensive technology. However, there are also many types of infrastructure in which labour-based and local resource-based technologies offer a stronger alternative in terms of employment creation, the sustainability of the infrastructure and savings in foreign exchange requirements. These include feeder roads, land reclamation, minor dams, wells and irrigation systems, drainage and sewerage, and social infrastructure, including schools and health centres.

The feeder roads sector is well-documented and provides an eloquent illustration of the implications of technology choice. The cost of equipment for "equipment-intensive" technologies amounts to some 80 per cent of the total investment, while the cost of labour is only around 10 per cent, and is mainly limited to skilled and semi-skilled labour. In the case of labour-based technology, with an equivalent quality output for the same investment level, some 30 to 40 per cent of the cost is for light equipment, while between 40 and 60 per cent is spent on labour. Furthermore, the annual direct investment cost associated with creating one work year of employment using labour-based technologies is estimated within the range of US$300 to 700/year, comparing favourably with higher costs under equipment-based technologies. (8) The exact cost of employment creation depends of course largely on the type of infrastructure constructed, and on whether or not the cost of technical assistance is included. Taking account of indirect employment creation and/or multiplier effects would further lower these figures.

Comparative studies carried out by the ILO in such countries as Burkina Faso, Cambodia, Ghana, the Lao Peoples Democratic Republic, Lesotho, Madagascar, Rwanda, Thailand and Zimbabwe show that, without compromising the quality of the infrastructure, the labour-based option:

  • is between 10 and 30 per cent less costly than more equipment-intensive options;
  • reduces foreign exchange requirements by some 50 to 60 per cent;
  • for the same investment, creates between two and four times more employment.


17. As a result, ILO assistance in the application of employment-intensive approaches for public investment programmes has come to emphasize four elements:

18. The sustainability, replicability and impact of infrastructure investments are optimized when their local resource intensity is maximized. This involves the use not only of local labour, but also of other resources available locally, including construction materials, tools and equipment, enterprises, engineering consultancy firms and other institutions, including universities and colleges for the teaching of the appropriate techniques (see box 4).

 

Box 4

National courses on labour-intensive methods

The ILO has supported the introduction of courses on participatory planning and labour-intensive construction methods in several African and Asian educational institutions as an important means of institutionalizing the use of these methods. The courses serve as an entry point for the ILO to introduce not only employment-intensive techniques, but also the relevant labour standards, particularly as regards conditions of work and the protection of workers.

Institutions that have included these courses in their curricula include the University of Natal in South Africa, the University of Science and Technology in Kumasi, Ghana, the University of Addis Ababa in Ethiopia, the University of Dar es Salaam in the United Republic of Tanzania, Makarere University in Uganda, the Hanoi University of Transport and Communications (HUTC) and the Hanoi Water Resources University (HWRU) in Viet Nam and the School of Communication and Transport (SCT) and the National Polytechnic Institute (NPI) of the Lao Peoples Democratic Republic. Universities in the Netherlands and the United Kingdom dealing with development issues have also incorporated these materials into relevant courses.


19. The shift in focus from government to private sector execution of public works has had a number of implications. The first is the need to give priority to capacity building in order to ensure that both the private and public sectors can fulfil their new roles. With adequate training, the national construction industry, and particularly small and medium-sized enterprises (SMEs), can be strengthened and developed. By emphasizing capacity creation and the development of appropriate contracting systems, the access of SMEs to public markets is enhanced.

20. Paradoxically, one of the main requirements for promoting the private sector execution of public works is the strengthened technical and managerial capacity of the public sector. Training is therefore provided for government staff in technical ministries, particularly in local government, who normally have little experience of contract preparation and management. Moreover, the existing legal, institutional, financial and administrative framework is not usually adequate for an effective contracting system. Donor-induced biases also need to be reduced, such as insistence on importing equipment duty free, the financing of only foreign costs or tied procurement to a donor country.

21. A second, closely related element concerns the tendering system for contracts for the execution of public works. SMEs often have great difficulty in gaining access to public contracts. Adjustments in contract specifications are required which give priority to light instead of heavy equipment, thereby defining the desired levels of employment. These adjustments include the division of tenders into small contracts that are accessible to SMEs and the planning of a workload that is manageable by them. At the same time, adjustments in contract specifications are made to introduce the relevant labour and social criteria, including minimum wages, non-discrimination (see box 5), elimination of forced labour, the right to organize, protection of wages, safety and health and insurance against work accidents.(9)

 

Box 5

Promotion of women's participation
in employment-intensive programmes

Experience has shown that employment-intensive works can have a powerful impact on breaking down stereotypes by employing women on what is generally considered to be mans work and by mainstreaming women's interests. Affirmative action has been taken in a number of projects by selecting categories of infrastructure, such as water supply or health facilities, which are of direct concern to women and by ensuring them equal access to job opportunities and to training. Particular attention is paid to the principle of equal pay for equal work, thereby guarding against the danger of unfair treatment of women. The training of women as technicians and gang leaders is emphasized, since practice has shown that where a higher percentage of women work at these levels, traditional cultural barriers are overcome and more favourable attitudes are developed for the recruitment of women workers for semi-skilled and unskilled work.

The participation of women in ILO-supported employment-intensive road projects reached 37 per cent in Botswana, 25 per cent in Madagascar and up to 60 per cent in Lesotho. In an urban rehabilitation and maintenance programme in Antananarivo, Madagascar, women account for 70 per cent of the total labour force.


22. The operational approach adopted by the employment-intensive programme is therefore based on capacity-building in the private and public sectors and on the strategic use of public investment in infrastructure for the development of a tendering and contract system under which:

23. For the enterprises involved, there are several major advantages to be derived from participation in labour-based projects and associated training activities. First, the tendering systems that are developed give them access to public markets in a major sector of public investment from which they would usually be excluded in practice. A transparent bidding process, in a sector in which favouritism and corruption often prevail, also contributes to improved governance and social dialogue. The introduction of efficient payment procedures guarantees the rapid cash flow that is so important to small contractors. They also benefit from training and from equipment that they purchase through the credit schemes associated with the projects. For the construction of feeder roads, this equipment typically consists of a tractor and trailer, as well as a compactor and smaller hand tools. For small enterprises operating at the edge of the informal sector, these are considerable advantages, which they retain after the original contracts are completed. There is much evidence that these firms continue to be successful and provide high-quality work. For example, in a major World Bank-supported infrastructure project undertaken in Madagascar, six of the seven enterprises which received performance awards had been trained under a pilot NORAD-funded ILO programme.

24. For the workers involved, the primary benefits are of course the employment and incomes received. For workers operating in the informal economy, the guaranteed conditions of work are also attractive. Moreover, the workers are often the main beneficiaries of the infrastructure that is created, which may well be of greater longer term benefit to them and to their families and communities than the wages received. For this reason the community-based projects described below offer great potential.

25. For governments, there are also numerous benefits from the adoption of employment-intensive techniques. These include greater output for a similar level of investment and an improved balance of payments, since the majority of the investment is in local labour and resources. The construction sector is given a considerable boost, which in turn helps develop domestic markets and strengthens inter-sectoral linkages. No less important are the better levels of income distribution, employment creation and poverty alleviation. As a result, once pilot projects have been carried out, many governments continue to use labour-based methods. One example is Uganda, where the Ministry of Works, Transport and Communication has placed some 5,500 km of trunk roads under labour-based routine maintenance through local contractors from the villages close to the roads. Another is Ghana where, despite the fact that the employment-intensive project implemented with ILO support has come to an end, the contracting system has been maintained and the number of active labour-based contractors has more than doubled.

26. Well-targeted investments in infrastructure can also have a radical impact on the development of local economies. For example, a survey of a road constructed in 1994 to link 20 isolated villages in the Hune district in the north of the Lao Peoples Democratic Republic showed that it led to an increase in the production of cash crops, the development of weaving and other income-earning activities by women, the opening of shops and rice mills in the villages and the restructuring of educational activities, with more students travelling to colleges in the nearby towns for further education.

27. Similarly, the Government of South Africa is currently testing the use of targeted procurement for civil works as an instrument to promote socio-economic policy and employment. Within certain limits, the policy enables the Government to involve specific target groups, in particular those previously faced with discrimination and excluded from the labour market, or those living in particularly poor and marginalized townships.

New opportunities for social dialogue and the
involvement of ILO constituents

28. It is a basic ILO principle that the social partners should be involved in policy formulation. Article 3 of the Employment Policy Convention, 1964 (No. 122), states that "representatives of the persons affected by the measures to be taken, and in particular representatives of employers and workers, shall be consulted concerning employment policies, with a view to taking fully into account their experience and views and securing their full cooperation in formulating and enlisting support for such policies". As the ILO has applied labour-based approaches in public investment programmes, more opportunities have arisen for social dialogue and the involvement of its constituents.

29. From the outset, the success of the ILO's employment-intensive programmes has provided its constituents with a good opportunity for dialogue with economic ministries and with the international financial institutions. As labour-based approaches have become more institutionalized, the Office has sought to increase the involvement of its constituents (see box 6). An integral component of the policy advice that is provided to countries adopting these approaches is the establishment, in the ministries responsible for investment decisions, of labour-based policy promotion units, of which the steering committees include workers' and employers' representatives. One such unit, the Labour-based Policy Promotion Committee (LAPPCOM), was set up in Uganda in 1997. The representation on its steering committee includes the Labour Ministry and the social partners. Similar units are planned in Guinea, Madagascar, Senegal and Togo.

30. Through these units, ministries of labour, in liaison with employers and workers organizations, are in a good position to achieve concrete results in the fields of employment and labour policy; to assess the applicability of labour rules and regulations; to protect the right of association; to assist in the development of contract documentation; and to provide contractors and workers with training in subjects related to labour legislation and working conditions. One illustration is Namibia, where the involvement of the Ministry of Labour from the initial pilot programmes onwards has meant that labour inspectors have been directly involved in the on-site training programme for small contractors. Another example is Sierra Leone, where representatives from the Ministry of Labour, the Employers Federation and the Sierra Leone Labour Congress have participated in contractor training courses to explain the relevant labour standards. They have helped greatly in the development of a practical code of conduct on labour issues understood by all the relevant agencies and practitioners.

 

Box 6

Collaboration with employers and workers organizations

Collaboration with employers and workers organizations in relation to employment-intensive programmes and projects has embraced a number of policy issues. The protection of workers rights was at the heart of a regional tripartite meeting (Kampala, Uganda, October 1997) which reviewed a guide on Employment-intensive infrastructure programmes: Labour policies and practices . (10) The meeting acknowledged the temporary and casual status of many of the workers employed on these programmes. It suggested that there was a need for both occupational and community organizations in the labour-based sector to serve their separate but complementary purposes.

The Confederation of South African Trade Unions requested the ILO's assistance on the issue of remuneration policy for informal-sector workers recruited under the country's National Public Works Programme. Contacts with the International Confederation of Free Trade Unions (ICFTU) and with the International Federation of Building and Wood Workers (IFBWW) have resulted in a partnership in the development and dissemination of the above guidelines on labour policies and practices and for the introduction of labour clauses into public contracts, in accordance with the Labour Clauses (Public Contracts) Convention, 1949 (No. 94). Furthermore, the IFBWW has requested ILO technical inputs in this field for a number of recent meetings that it has organized on the informal sector, such as the Pan-African Workshop on the Informal Sector in Harare in August 1997 and the IFBWW Construction Committee meeting held at the ILO last May.


31. For employers and workers organizations, in addition to involvement in policy dialogue at the national level, the ILO's approach to employment-intensive works offers other opportunities. Chief among these is the possibility of extending the reach of representative organizations to unorganized sectors. This opportunity is reinforced through the inclusion of clauses recognizing the right to organize in contractual arrangements. Employers have seized this opportunity, with the establishment of associations representing small contractors in several countries (see box 7). Such associations give small contractors better visibility and bargaining power vis-à-vis government. Workers' organizations are also expressing keen interest in collaborating with employment-intensive infrastructure programmes as a vehicle to reach out to workers in the informal sector and to promote job creation and workers' rights in an integrated manner.

 

Box 7

Labour-based contractors associations

There are many reasons why it is in the interests of labour-based contractors to form representative associations. They have a common interest in consolidating their access to public markets, and particularly in:

  • negotiating and monitoring effective payment systems;
  • ensuring access to fair and transparent bidding processes;
  • strengthening their negotiating power with governments and clients;
  • engaging in social dialogue on priorities, and on ways and means of improving social protection.

With assistance provided through ILO-supported pilot programmes, labour-based contractors associations have been established in several countries, including Ghana, Lesotho, the Lao Peoples Democratic Republic, Madagascar and Zambia. Their members have been provided with technical and managerial training, including labour management issues such as recruitment and conditions of work.

This training can lead to improved industrial relations and a stronger hand in dealing with governments. One example is the pressure that associations can apply on the government to make timely payments, which mean that wages can also be paid on time. By way of illustration, the labour-based contractors association in Ghana was able to successfully argue its case with the Government, where individual contractors had been unable to do so.


Community-based approaches

32. In the longer term, those who benefit the most from local infrastructure investment programmes are the local populations themselves. Nevertheless, ownership of the infrastructure that is produced through public works programmes, and responsibility for subsequent maintenance, tends to remain with the central, regional or local government. On works of public interest, the immediate motivation for the workers is the wage received for the work performed.

33. In contrast, community-based investments are of direct interest to the beneficiaries. The primary motivation is not the payment of a wage, but the benefits derived from the newly created infrastructure. But these demand-driven investment projects are not only of local interest. They also give effect to national policies in such fields as food security, soil and water conservation, the protection of the environment and the resource base. They therefore fully justify public cost-sharing. In an endeavour to reach and support the urban and rural informal sectors more effectively, greater attention has been paid recently to the community-based execution of local infrastructure projects. Examples include a community forestry project in the Kita district of Mali, the Dhaulagiri Irrigation Development Project in Nepal (see box 8), the Hannah Nassif project to upgrade roads and drains in an unplanned settlement in Dar es Salaam and pilot programmes involving tribal and marginalized groups in the Indian States of West Bengal and Tamil Nadu. The most significant feature of this approach in the longer term is the creation of organizations representing the informal and rural sectors, which previously have not had a representative voice.

 

Box 8

Community-based village irrigation schemes

One example of a community-based irrigation project is in Dhairing village, Nepal, where it serves 350 families. This irrigation project, completed in July 1997, is described in a recent in-depth thematic evaluation of the employment-intensive programme. (11) The scheme brings water from a river by cutting a channel through a rock face. The farmers maintain the irrigation infrastructure and pay a small amount to a water committee. Locally available materials were used, allowing the farmers to repair the canals themselves without importing expensive cement. The canals were constructed through piece-work payment systems and in some cases by local contractors, selected by the farmers association. As a result of the project, the farmers are able to grow two crops of paddy a year and one of wheat. Associated with the project is a small women's credit/saving scheme.

The evaluator was struck by the enthusiasm of the farmers, which he had not experienced previously, despite visits to over a hundred micro-projects in Nepal. Noting the existence of similar projects nearby benefiting from loans from other donors, he concluded that the comparative advantage of the ILO lay in the fact that it was "as interested in wider community organization and participation as in the construction of the irrigation scheme itself".


34. The ILO has developed a contractual approach to the implementation of community-based infrastructure works. In these cases, contracts defining the rights and responsibilities of all the parties involved have proven to be more effective than either conventional wage systems or unpaid self-help schemes. It is important that project implementation modalities and remuneration systems for community-based projects be designed to encourage the communities concerned to take clearly defined responsibility for their operation, repair and maintenance.

35. Unpaid self-help, on the other hand, may in some cases be open to abuse, such as compulsory mobilization of the labour force by public authorities. ILO Conventions Nos. 29 and 105 prohibit the use of forced or compulsory labour in any form, including "as a method of mobilizing and using labour for purposes of economic development". Freely negotiated community contracts can in such cases be a policy tool for the ILO to play a constructive role in combating such forms of forced labour.

36. Common systems for community participation in investment programmes include:

37. The community organizations created have proven adaptable to other collective activities, including micro-finance, product marketing and the procurement of inputs, collective negotiations on other matters and mutual funds for the social protection of rural and informal sector workers. By way of illustration, community organizations developed in Dar es Salaam, the United Republic of Tanzania, have offered a conducive environment for the establishment of mutual health funds covering informal sector workers. Associations of this type clearly offer enormous potential for improving the working and living conditions and organization of these very vulnerable groups of the population.

III.  Achieving the full potential of labour-based approaches

38. The ILO's comparative advantage for employment-intensive programmes is that its approach links employment promotion, poverty alleviation and private sector development, on the one hand, with social progress and improved democratic processes on the other. As such, it is fully in line with the ILO technical cooperation strategy adopted by the Governing Body in November 1994. (12) Experience of the implementation of this approach has shown that it has the potential:

39. The ILO's assistance to constituents in the utilization of labour-based methods has not been static, but has evolved to respond to changing policy environments. The principal new policy directions pursued in this respect, which were recently endorsed by the independent evaluation cited above,(13) include:

40. This change in focus will require greater emphasis in the near future on the following areas:

41. An important lesson that has been learned in this respect is that these policy concerns are rarely advanced through discussions of social principles on their own. The best results are obtained when the technical credibility of labour-based approaches is established first. This means that it is necessary for the ILO to participate in both pilot and large-scale public investment projects. In other words, the ILO should not be satisfied with advocating job creation policies, but should also be ready and able to demonstrate how such policies can be put into practice. Such demonstrations usually take the form of technical cooperation programmes, in which the ILO helps enhance the capacity of governments and through which it can also influence donors and international financing agencies for the wider application of labour-based approaches in their own investment programmes. Experience has also shown that decisions on technology choice, private sector involvement, operational systems and procedures, conditions of work and labour management practices are largely taken, explicitly or implicitly, at the design stage. The ILO's technical assistance therefore needs to be incorporated in investment plans from the very beginning, that is, during the upstream policy discussions.

42. ILO support to labour-intensive programmes provides a useful entry point for broader social policy discussions with social partners. By providing an immediate and tangible impact on employment and on basic infrastructure, the stage is set for the introduction of additional policy objectives into successive project phases. However, this approach raises the important issue of time. The achievement of a comprehensive set of policy goals which are both sustainable and can be replicated on a wider scale requires the ILO's long-term association with the country's national development programmes.

43. Programme implementation therefore has to include a set of complementary instruments, ranging from research and advisory services on sectoral investment policies to pilot demonstration and training projects for government staff, private contractors and the workforce. The promotion on a step-by-step basis of relevant labour standards is an integral component of the support provided for the institutionalization of employment-intensive programmes. To achieve broader impact in this area, in response to the requests made in country objectives statements and by countries affected by armed conflict and economic crises, such as the current Asian crisis, pragmatic approaches need to be further developed and properly coordinated with the relevant ILO technical departments and MDT specialists, particularly in the fields of employment policy and employers and workers activities.

44. In accordance with the resource mobilization strategy endorsed by the Governing Body in November 1997,(14) strengthened ILO collaboration with development and technical cooperation agencies, currently including UNDP, UNCDF, the World Bank, the European Union, DANIDA, NORAD, SIDA, SDC, the Netherlands, Germany, Belgium and Italy, would expand the scope, application and impact of employment-intensive investment policies and programmes. This would in turn provide a much firmer basis for strengthened collaboration in this field with international and regional employers' and workers' organizations. Joining forces with these partners would make it possible for the ILO to assume an enlarged role supporting the achievement by member States of employment-intensive growth as a means of attaining lasting reductions in poverty levels.

Programme orientation

45. The challenge of job creation faced by ILO constituents is as acute as ever. The recent Asian crisis underscores the fragility of the once acclaimed economic miracle of many East and South-East Asian economies, which in the space of a few months moved from labour shortages to exploding levels of unemployment. With or without crises erupting, the levels of structural unemployment faced by economies at all levels of development, and particularly in the developing world, is such that demand for ILO technical advisory services in employment-intensive programmes will continue to grow as the ILO steps over the threshold into the twenty-first century. In brief, the issue of employment creation has attained greater urgency in view of:

46. In such situations the demand for ILO technical advisory services in employment-intensive programmes can only be expected to grow as the world moves into the twenty-first century. The Office should therefore prepare itself to meet this growing demand by strengthening the programme and giving it a new orientation. In addition to strengthening capacity in this field at headquarters, it would also be necessary to create a firm network of specialized expertise in the regions. While such technical capacity is essential to respond quickly and effectively to requests from member States, both in crisis situations and to meet the increasingly acute challenge of persisting unemployment and underemployment, it is moreover crucial in ensuring credibility vis-à-vis bilateral donors and international financing agencies.

47. Thanks to the high quality of its technical work and to the experience gained over the past 20 years, the ILO has achieved international credibility and recognition of its authority in this field. In order to meet growing demand, the ILO has already taken certain steps to enhance its capacity. One initiative is the establishment, at the regional and subregional levels, with extra-budgetary funding, of a series of technical advisory support programmes, known as ASIST.(15) A successful programme for English-speaking Africa is now ongoing, and other programmes, for which extra-budgetary funding is urgently required, are either in the inception or planning phase in Asia, French-speaking Africa and Latin America. Such efforts can, however, be truly effective and successful only when there is a solid core within the Office on which they can be built.

48. To conclude, faced with the stubborn persistence of unemployment, underemployment and poverty, the ILO needs to strengthen its capacity to respond and to provide the necessary advice and technical support in this field. Employment-intensive infrastructure development is an area in which there are proven prospects for the creation of sustainable jobs and in which the ILO has demonstrated a clear comparative advantage. Efforts should therefore be made to build upon this strength, thus enabling the ILO to meet the challenge of job creation.

Geneva, 15 October 1998.

1. Estimates of poverty vary according to the definition used. According to the World Bank estimate based on US$1 a day as a poverty line, some 1.3 billion live in poverty now. However, it is only at the country level that such estimates make sense.

2. Hopkins, M.: An independent thematic evaluation: ILO's Employment Intensive Programme, ILO, Geneva (forthcoming).

3. World Bank: World development report on infrastructure for development, Washington, DC, 1994, p. 1.

4. ibid., p. 14.

5. Gaude and Watzlawick: "Employment creation and poverty alleviation through labour-intensive public works in least developed countries", in International Labour Review, Vol. 131, No. 1, 1992, p. 7.

6. ILO: The social impact of the Asian financial crisis, ROAP, Bangkok, April 1998, p. 59. (Internet -- http://www.ilo.org/public/english/60empfor/cdart/bangkok/index.htm.) For the report of the meeting, see GB.272/4 (Internet -- http://www.ilo.org/public/ english/20gb/docs/gb272/gb-4.htm.

7. ASIST refers to a series of programmes called "Advisory Support, Information Services and Training for Labour-Based Programmes" which the ILO is promoting at the regional/subregional levels with a view to quickly and effectively responding to requests from member States for policy advice and technical support in this area.

8. See Hopkins, op. cit. and Gaude, Guichaoua, Martens and Miller: "Rural development and labour-intensive schemes: Impact studies of some pilot programmes," in International Labour Review, Vol. 126, No. 4, 1987. This figure is obtained by dividing the total investment costs of ILO-supported labour-based infrastructure programmes by the estimated number of workdays of employment created, using as a basis 200 workdays per year.

9. For example, under specific labour-based programmes in Nepal, Zambia and Zimbabwe, and in the public works programmes in general in South Africa, contract specifications on employment and labour conditions were introduced:

10. Tajgman, D. and de Veen, J.: Employment-intensive infrastructure programmes: Labour policies and practices, ILO, 1998.

11. Hopkins, op. cit.

12. GB.261/TC/2/5.

13. Hopkins, op. cit.

14. GB.270/TC/2.

15. See footnote 7.


Updated by VC. Approved by RH. Last update: 26 January 2000.

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