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Employment creation


Employment creation

Employment schemes to tackle food security problems have proliferated during the 1980s and 1990s. This is in part due to the shortcomings of other safety-net programmes and in part to the intrinsic advantages of such programmes. This proliferation has been attributed to rapidly growing populations in the context of a low correlation between the growth of output and the growth of the labour force. In addition, the cost of labour relative to other factors of production has declined as a result of economic reform programmes. Most importantly, it has been increasingly recognised that infrastructural constraints are significant in inhibiting development and reducing incentives to the rural poor. The association between infrastuctural development and employment programmes is well recognised (von Braun. 1995a).

Employment programmes, both food-for-work and public works (cash-for-work) projects, contribute to food security in two ways: they provide a safety-net for the amelioration of short-term food insecurity, and create assets which should raise medium-term incomes and reduce food insecurity in the future. The extent to which such schemes contribute to both the immediate income-raising objective and the longer-term asset-creating goal will be determined by the objectives of the individual projects and the degree of success with which they are implemented. Key resources are investment capital, labour, wages, and organisational capability.

Crucial to project choice is the trade-off between short-term needs and longer-term asset creation: this is likely to be influenced both by political choice and the immediate context. Thus, the majority of resources may be directed towards wages and employment creation in times of national emergency, such as a drought or severe external shock. In more equanimous times, a higher proportion of resources may be channelled towards asset-building. Frequently, employment programmes begin during times of national emergency, and are continued with a different emphasis after the emergency has ended.

Food-for-work programmes.

In Botswana, the Government instituted a programme of public works during the 1980s, to combat food insecurity during periods of drought. (Teklu, 1995). The early experience suggested there was excess demand for jobs, which were rotated: the average employment being 76 days per year. More recent practice has extended the average employment period, and between 90,000 and 100,000 jobs are created annually. The wage rate was 70 per cent of the lowest unskilled formal wage, often making it more attractive than market wages in small villages, although in towns and large villages it is perceived as less attractive and thus more successfully resulting in the self-selection of the poor. The large proportion of women (60 per cent-70 per cent of the total) suggests the programme teas at least been partially successful in targeting the poor.

Food-for-work programmes in Lesotho involved wages consisting of 25 per cent cash and the remainder as a food package, and the total value significantly less than the minimum wage. The scheme appears to be reasonably well targeted: 80 per cent of the workers are women, although self-targeting is weakened by excess demand, and final choices of participants are made by Village Development Committees (WB, l995c).

Public works programmes in Tanzania have been successful in creating a large number of jobs, but self-targeting plays a limited role. Selection and organisation is carried out by village administrators, and the wage (which is mostly cash) is equivalent to the official minimum wage, and is inflexible irrespective of the location or nature of the work undertaken (Teklu, 1995).

The PUSH (Programme for Urban Self-help) in Zambia targets geographically through working in low income areas of the main towns. Additionally, the food rations which are provided as payment for a four-hour day are very small. Targeting is regarded as inefficient, but it is a valued safety-net scheme, even though the quality of the assets produced is low (WB, 1994).

Zimbabwe introduced a food-for-work programme in 1989, replacing free food distribution. The programme has been very successful in improving food insecurity during drought years, although being dependent on donor support, there are inadequate funds to expand the programme to meet demand. (Webb. 1995).

The key features of employment creation programmes revolve around the targeting mechanism and the type of asset produced. In some respects, al] these features are related: how targeting is carried out may depend on the type of asset produced, and selection of the latter may vary with the target group. Targeting is a crucial issue: if the project is not well-targeted, the principal objective is obviated. Much depends on the wage level: whether wages are in kind or cash, they must be sufficient to provide a meaningful contribution to food security, while at the same time small enough to act as a disincentive to all but the poorest. Obviously, the higher the wage level the greater the demand, and the danger of excess demand. Where the latter occurs, some rationing mechanism is necessary and the principle of self-targeting is lost. Without the latter, some administrative procedure is necessary to select participants which, because of the high information costs, is likely to be a less efficient mechanism. Apart from wage levels, project location is an important targeting mechanism: for example, food-for-work projects in drought afflicted areas.

A substantial proportion of employment projects concentrate on the development and improvement of access roads. These are in any case crucial in reducing medium-term food insecurity in remote areas, but investment in more directly productive activities is also common, such as afforestation, water control and storage facilities. What is equally important, however, is the provision for the proper maintenance of the assets created, without which any medium-term advantages will be lost. The greater is the emphasis on the creation of agricultural assets, the higher will be the ratio of capital to labour costs of the project, and the lower the employment creation. A further point to be borne in mind is that the benefits from assets created in these programmes are likely to be regressively distributed: in general they will be used in proportion to existing resource endowment. Thus the taxation of resource use, especially resources involving irrigation and storage facilities, could provide additional funds for employment creation.

The optimal choice of programme will be determined by the food security environment (i.e. how important short-term needs are relative to medium-term asset-creation) and the labour market environment, which will determine the appropriate wage rate. Increasingly such programmes are being integrated with broader development programmes. The importance of effective co-ordination is emphasised, as is the greater efficiency of self-targeting mechanisms. In addition, it has been suggested that the benefits in terms of reducing food insecurity will be greatest where projects are targeted towards causes of insecurity: e.g. infrastructure deficiencies and resource constraints (von Braun, l995b).

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