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0 Public works and employment programmes: towards a long term development approach for social protection and the delivery of assets and services Long-Term.

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Presentation on theme: "0 Public works and employment programmes: towards a long term development approach for social protection and the delivery of assets and services Long-Term."— Presentation transcript:

1 0 Public works and employment programmes: towards a long term development approach for social protection and the delivery of assets and services Long-Term Social Protection for Inclusive Growth: A Policy Dialogue and Learning Event, Johannesburg, October 12, 2010 Radhika Lal International Policy Centre for Inclusive Growth

2 1  Slowdown of the world economy:  Financial fragility;  Fluctuations in exports;  Volatility in commodity prices;  Difficulties in ensuring a recovery in jobs;  Some countries had a ‘jobs crisis’ even before the current economic crisis…  Differential country experiences in weathering the crisis:  All other things being equal, some countries appear to have been able to mitigate impacts because of (long term) social assistance measures which were already in place (e.g. Brazil, India)  Interest in results-based innovations in social assistance programmes that can be easily expanded and can address emerging public good deficits; Current Context:

3 Conventional Short-Term Policy Options Scaling up cash transfers Effective though it may be difficult to scale up quickly unless a single registry for social programmes has information on the entirety of the low-income population (i.e. both beneficiaries and non-beneficiaries), and the ‘cut-off’ point can be increased to allow more "vulnerable" people to enter; Subsidies to the private sector to hire workers May result in a ‘substitution’ so its not clear how many ‘new’ jobs will be created and how many ‘retained’; ALMP & Training schemes Important to upgrade skills; on-job training is best but the private sector unlikely to have an incentive to skill people when demand is stagnant. Promoting labor market flexibility What is efficient on the microeconomic scale (enterprise level) may be counter-productive on the macroeconomic scale (if it does not stimulate higher investment or increase export demand) Microfinance Recent studies point to a limited impact on poverty - not all young people, and of the unemployed in general, have the potential to be entrepreneurs; Infrastructure programmes Impact on employment depends upon labor intensity Public works The quality of assets and longer term impacts on poverty are likely to be an issue unless there is a focus on these issues.

4 Need for a longer-term development perspective in response to the crisis:  Public policies to re-ignite investment for transformational and inclusive growth;  Priority assigned to livelihood diversification, social upgrading and skill development for selected sectors ;  Investment in social protection programmes that go beyond safety nets;  Address deficits in infrastructure, social services, and demand which have detrimental impacts on the conditions for re-igniting growth and limiting adverse impacts on human capital; However, ensuring scalable and sustainable investment in social protection has been difficult for many countries in the region.. and the crisis has cut into the fiscal space available…  Making the linkages between growth and social protection and, more specifically, between the productive dimensions of social protection and the real economy productive policies could help… 3 Medium term policies

5 4 Medium-long-term structural transformation policies  Development transformations are key for sustainability of growth,  Without a forward looking focus on innovation, countries can be locked into production and exports of minerals, primary commodities and simple processing activities which make them vulnerable to competition and generate too few resources for economic and social upgrading and for the creation of good jobs.  Transformation is a continuous process which requires a focus on learning, productive experience, virtuous institutional inter- linkages and stimulation of demand; it takes time and experimentation;  Innovation and transformation involves creative destruction (including of jobs), thus there is a need to:  facilitate cross-sectoral mobility and skills upgrading;  explicitly foster innovation to address the needs of more labour intensive sectors/segments – particularly in rural areas - and to foster delivery platforms for services aimed at the poor ;

6 5 Employment centered social protection programmes: Safety nets or pathways out of poverty? While public employment programmes can (rightly) be viewed as a symptom of the employment deficit in the economy they can also provide a platform for innovation and help to underpin investments in service delivery and asset creation under-served areas….and serve as a transitional mechanism for the creation of jobs

7 Public Employment Programmes (PEPs): an overview  Conventionally, public works have long been considered a staple of social assistance programmes with the objective of short-term consumption smoothing and insurance functions;  Two traditions:  Public works have long been organized in situations of drought or to combat seasonal unemployment by providing short-term employment on labor-intensive projects such as road construction, maintenance, small-scale irrigation and water conservation works;  Public works have also been designed as workfare programmes in the context of short-term ‘safety nets’ to address temporary job-losses; However,  viewing work only as a conditionality for payment works against a focus on value of assets and services provided;  Short term safety net approach works against the development of programme capacities and synergies with complementary programmes;  New approaches point to multi-year funding frameworks and include rights-based programmes and guarantees… 6

8 7 Role of public employment programmes PEPs can play a ‘bridging role’ with regard to : Addressing deficits in the provision of services and potentially providing a pathway to better jobs; Fostering investment in assets and services relevant for the poor and under-served areas; Ensuring stabilization of demand and incomes relevant for economic resilience; Providing a platform for innovation in the delivery of services If so, PEPs need to be linked to Macro-economic and structural transformation policies to promote employment-rich inclusive growth; Policies to enhance employability, training and skills development Promotion of private sector development and entrepreneurship These linkages are easier to foster when there is a long-term development framework for employment programmes

9 Promotional Social Protection: Important to recognize inter-linkages and hybrid nature of PEPs 8 Labor Markets: Reduction in working poverty through potential impact on wage levels and number of days worked Human Capital: consumption smoothing and support to investments in human capital Assets and services: 1 st and 2 nd round impacts on livelihoods, increased viability of self-employment and investments in human capital Promotion of Livelihood Opportunities (through a long-term development approach)

10 Public Employment Programmes: Issues  Useful asset creation requires a focus on assets and work not just creation of work (workfare), technical capacity (that can be built over the long term), accountability and participatory inputs.  In many cases the problem is high levels of working poverty coupled with high wage levels for a few; hence there is a role for the employment guarantee in setting a wage floor;  Impact on private sector is mixed: they gain from local demand for their products while experiencing some potential increases in wage costs and competition for workers;  Both the private sector and society at large can benefit from the work experience gained as well as from the training (and/or education support) received by beneficiaries of public employment programmes.

11 Recent Innovations in Rethinking Design/Role of PEPs  Go beyond a focus on cash for work to focus on job creation and useful asset and service provision  Multi-year funding and implementation frameworks  Multiple focus areas: conventional infrastructure and social services (EPWP) and natural resource management (EPWP, MGNREGA);  Catalytic Social Information and Delivery Systems: Can be deployed for complementary programmes and can help to catalyze service provision in other-wise under-served areas – e.g. financial and digital inclusion; ;  Strong Transparency and accountability frameworks – useful for other programmes and empowerment for social justice;  Facilitate a shift from stand-alone to complementary programming 10

12 MGNREGA (India) : Service Delivery Platform & Innovation  Rights based framework making the state legally accountable for providing work (100 days/rural HH);  Decentralized implementation with technical support and participatory selection of projects;  Mandates use of IT infrastructure: this can also foster businesses and digital inclusion.  Mandates payment through post offices/banks, allows for banking correspondents and provides a platform to test biometrically- enabled micro-payments via linkage to UID;  Mandates Social audits by the implementing agency and allows for civil society role; MGNREGA has had impacts on the transparency and accountability of other poverty reduction programmes;  Can be combined with sectoral initiatives through ‘convergence’ programmes to increase quality of assets and services; Source: Fabio Veras 2009

13 NREGA Results to date Source: Amita Sharma (2010) Employment & Labour Market Impacts Assets, Services and productivity improvements Income Increase in Agriculture Minimum Wages, wages earned/day & annual income. (Source: IIM Lucknow, NDUAT Faizabad) Livelihood diversification in rural areas (Source: IIM Shillong, CSE, IHD) Financial Inclusion : 8.8 crore accounts opened; Improvement in ground water (Source: ASCI, IHD) Reduction in water vulnerability indexes: for water, agriculture, and livelihoods (Source: IISc) Improved agricultural productivity & cropping intensity (Source: ASCI, IIT Roorkee) Increase in earnings/ HH: 2006-07: Rs. 2795 2007-08: Rs. 3150 2008-09: Rs. 4060 Supplementary income source during non- agricultural seasons (Source: IIM Ahmedabad) visible decline in levels of distress migration (Source: Disha, NFIW, IHD, CSE)

14 EPWP (South Africa): Green Jobs for the Poor and Provision of early childhood development EPWP Social Sector The social sector had an innovative focus on early childhood development (ECD) and community home-based care (CBHC) to create jobs while providing services to “reach infants, young children, and the sick members of vulnerable households.” These services help alleviate unpaid care burdens by providing support for the raising of children and the care of the ill. (Antonopoulos) EPWP environment sector: E.g. Working for Water program which aimed to enhance water security, restore the productive potential of land and promote sustainable use of natural resources and invest in marginalised sectors of South African society

15 14 Selected Sources  Amita Sharma (2010) “Mahatama Gandhi National Rural Employment Guarantee Act, 2005 A Rights based Law for inclusive growth” http://www.ipc-  Maikel Lieuw-Kie-Song and Kate Philip, (2010) “Mitigating a Jobs Crisis: Innovations in Public Employment Programmes (IPEP)” ILO Employment Sector, Employment Report No.6 www. www.  Maikel Lieuw-Kie-Song (2009) “Green Jobs for the Poor: A Public Employment Approach”  Maikel Lieuw-Kie-Song and Radhika Lal (2010) “Green Jobs for the Poor: Why a Public Employment Approach is Needed Now”  Radhika Lal, Steve Miller, Maikel Lieuw-Kie-Song, and Daniel Kostzer (2010) “ Public Works and Employment Programmes: Towards a Long-Term Development Approach”  Rania Antonopoulos, 2009. " Promoting Gender Equality through Stimulus Packages and Public Job Creation-- Lessons Learned from South Africa’s Expanded Public Works Programme," Economics Public Policy Brief Archive ppb_101 Promoting Gender Equality through Stimulus Packages and Public Job Creation-- Lessons Learned from South Africa’s Expanded Public Works ProgrammeEconomics Public Policy Brief Archive  Smita Gupta (2007) “The Significance And Limitations Of India’s National Rural Employment Guarantee Act In Addressing Rural Poverty”

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