Infrastructure Development: Poverty Reduction and Income Generation

• Infrastructure development plays a key role in creating jobs, reducing inequalities while improving competitiveness and expanding markets and consumption.

• Infrastructure spending has a large multiplier effect on employment and is a very direct way of increasing employment and of boosting aggregate demand.

• In addition, the quality and extensiveness of infrastructure networks significantly reduce poverty and income inequalities through enabling less developed communities to connect to product markets and social services

EIIP – ILO Approach for Local Development

ILO Report:

Labour and social trends in ASEAN 2010:

sustaining recovery and development through decent work

* Note that 1 is the top ranking or most competitive, and so a lower number closer to the axis indicates better performance. Source: World Economic Forum, Global Competitiveness Index Analyzer 2009-2010

The need for infrastructure is pronounced throughout the region for high, middle and low-income countries. 10 of the 12 countries in ASEAN+3 and India for which data is available have a lower infrastructure ranking than their overall competitiveness ranking. Improvement in infrastructure could place countries such as Indonesia, Vietnam as well as Lao PDR not only on a stronger growth trajectory but it could create millions of jobs and reduce inequalities and poverty.

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Infrastructure and ILO…

Programme: Employment Intensive Investment Programme (EIIP) has many years of experience of applying local resource-based solutions to the development of infrastructure. Opportunity to address ILO concerns in infrastructure sectors.

Objective: Enhance the impact of investments in infrastructure on employment creation (income generation), poverty reduction and local development.

Means: Policy and strategy support at the national level and training and implementation support at the local level

Context:

• Poverty reduction (MDGs) through rural infrastructure development(local planning, local resource-based methods, rural roads, maintenance, capacity building) • Upgrading of urban low-income settlements(community contracting, small urban infrastructure, capacity building)

• Public works as components in social safety nets (ECS/EGS)(design, implementation, capacity building, impact)

• Crisis response and climate change adaptation (cash for work, reconstruction, green works – green jobs: irrigation, water and soil conservation, flood protection…., capacity building)

local development impact

employment, income

multiplier

short term:

long term:

Infrastructure and Local Development:

• There is generally a strong link between investment in infrastructure and local (economic) development in a region.

• Community priorities often include infrastructure for both economic and social development.

• The needs for infrastructure investments in developing countries are vast.

• Estimates put annual investment needs for infrastructure at 5.5% of GDP in middle-income countries and 9% in the least developed countries.

Infrastructure and EmpLED

Example EIIP Tools used in EmpLED:

• Planning• Implementation• Operation and Maintenance

VCA (value chain approach) or ABA (area-based approach)

Tools: Planning the Infrastructure and Local Development

Identify infrastructure interventions in a geographical area usually a district or village

Identify infrastructure interventions in the value chain

• Numbur & IPs Tourism Value Chain (access roads, trails, campsites, maintenance)

• Junar Value Chain (access roads, maintenance)

• Food Value Chain (irrigation channels, water storage and harvesting, access roads, river training, maintenance)

IRAP and various participatory techniques

Various participatory techniques and LED forums

Both used in EmpLED to identify investment priorities

IRAPIRAP Concept

WATER

HEALTH

EDUCA-TION

FUELWOOD

ROADS

TRANS-PORT

ELECTRI-CITY

MARKETS

What ?

Where ?

How ?

Tools: Implementing the Works and Local Development

• Employment-intensive technologies (optimize the use of local resources (labour ,skilled and unskilled, materials, tools) and inject cash into local economy as wage and local materials

• Community contracting: ownership, capacity building of beneficiaries, cost effective, transparent and sustainable

Both used in EmpLED to implement investment priorities

Tools: Sustaining the Benefits and Local Development

Team-based maintenance A tool for:how these teams may be formed, how the team members should be selected, and the required registration and training of the maintenance teams, the contracting arrangements, the concept of performance-based contracting, suitable contract documents, the planning and inspection of the maintenance work and the payments to be made to the maintenance teams.

Introduced in EmpLED districts

thank you

e-mail: donnges@ilo.org