Employment-intensive Investment in Paraguay

Web page | 08 February 2017

Current EIIP Involvement

In 2015, the ILO provided technical assistance to the Ministry of Labour and Social Security (MTESS) to create a Public Employment Program in Emergencies and Disasters, in response to the emergency situation caused by the floods in 2013, which affected more than 160,000 people across the country.

It aimed at providing temporary employment in risk management processes (preventive) that could be developed in coordination with municipalities, and to ensure that resources for emergency can be used to provide temporary paid employment to people affected by natural disasters or to persons living in poverty. The study has shown that internal institutional arrangements are needed to foster the implementation of this PEP.

Historical Information

The Employment-Intensive Investment Programme (EIIP) has over the last thirty years developed a comprehensive approach to employment creation in infrastructure development. Its proven methodologies and tools of local resource use, inclusive planning and contracting, skills and private sector development have long been recognised in Africa and Asia for their positive impact on local development. Latin America is now picking up on this experience.

Assessing employment impact
At the beginning of 2007, the ILO Subregional Office for the Southern Cone Countries of Latin America received a request from the Ministry of Finance of Paraguay to develop a methodology for prioritizing public investments that would take into account the impacts on employment. Under this scheme, the development of the prioritization system implied the intrinsic development of a job created monitoring system. According to forecasts, both developments would be incorporated into the Public Investment System (SIP) that the Government of Paraguay planned to develop in the immediate future. With the introduction of these methodologies, the Government of Paraguay hoped to improve the effectiveness of public investment and its capacity for the creation of decent work. A detailed three-volume study provide the basis to assess ex ante and ex post employment estimation and impact. It was presented to the Ministry of Finance.

As a result of the international financial crisis unleashed at the end of 2008, there was an increase in unemployment in Paraguay, which was offset by the new government through an Anti crisis Plan. The Plan was implemented through various measures, one of them was the endowment of complementary resources to the departmental governorates to execute works of public investment with intensive use of local labour. In order to measure the impacts on employment, the Ministry of Finance requested the ILO to develop an adequate monitoring tool. This tool allowed the sub national governments monitor the allocated investments and to measure the impact in different sectors and stakeholders.

Developing instruments and tools to enhance accessibility
In 2007, in response to the Integrated Rural Access Training carried out in Bolivia, the International Forum on Rural Transport and Development (IFRTD), together with the ILO, carried out a study on rural transport in Paraguay, as well as implementing an Integrated Rural Accessibility Planning (IRAP) pilot in one municipality. The results of these two activities will allow for a broader discussion on rural transport and rural access in Paraguay and for consolidating the Foro Paraguayo.

At the local government level, the IRAP with the National Foro of IFRTD (a proven participatory planning methodology addressing the access to economic and social services) have been introduced for the implementation of a Water and Sanitation programme with indigenous. In particular, the needs of women, youth, and indigenous people are being analysed giving voice to previously deprived people. The adoption of the IRAP tool by municipalities is a low-cost and simple means of determining the needs of communities and of prioritising the interventions in both municipalities and other areas.

Together with the government, the ILO carried out a monitoring study concerning project investments as a response of the 2009-2010 crisis in this country. This impact evaluation was made together with the government, in particular the Ministry of Finance, stressing the importance of focusing on sectors that would potentially create employment opportunities.

Ensuring an enabling legal framework for community participation and micro enterprise development
The EIIP continued to provide assistance to the Director General on Public Contracting (DGCP) to facilitate the participation of micro and small enterprises and community organisations in public investment contracts. Apart from the development of an amended article in the Public Contracting Law, giving preference to local contracting, the EIIP assisted in the development of a text for a proposed Decree regulating the same law regarding the promotion of micro, small and medium enterprises, especially in the roads infrastructure sector. A standard bidding document was also drawn up for the Direct Contracting procedure, decreasing the amount of documentation required and shortening the form in which it is to be presented, in order to facilitate the participation of bidders in rural areas. In 2008, it was realized that much further work was needed to develop a minimum quota of public investment budgets contracted out to micro and small enterprises; this would require further elaboration of more refined targeting measures in order facilitate these enterprises’ access to public contracts.

Increasing capacity and capabilities: The inclusive approach on rural roads maintenance
In cooperation with the World Bank and the Ministry of Public Works and Communication (MOPC), under an ILO-MOPC-World Bank Agreement, the EIIP carried out in 2007 an integral study on micro-enterprise-based routine maintenance of unpaved national and departmental roads. The study included social, organisational, technical and managerial issues, determining the adjustments that need to be made in order to be able to implement the maintenance system in the context of Paraguay, where the entire road network is still formally the responsibility of the MOPC, and where traffic levels are high due to the nature of the roads concerned. The social study recommended the inclusion of women and indigenous people, which was well taken by the World Bank and the MOOPC being recognised as excluded and discriminated groups in the wider society.

Due to political issues the implementation phase delayed until 2011, when the Pilot Project called Promoción de Microempresas de Mantenimiento Rutinario de Caminos, Ñamoporá Ñanderapé (Préstamo 7406-PA del Banco Mundial) was implemented. The project organised 6 micro enterprises in the regions of Caazapá, Caaguazú and San Pedro, improved maintenance of 93 kilometres and provided direct employment to 45 people, including 13 women. The most important outcome of the project was the organisation and implementation of the first micro enterprise of maintenance completely integrated of Mbya ethnic group, proving their capacity to develop quality works and breaking the stereotype of being lazy non trustful people. In 2013, a second phase was approved, however due to political constrains, the project was not implemented.

As part of the implementation process, a series of training courses for capacity building took place. An international training programme with MOPC staff the World Bank, the National Rural Roads Programme of the Inter-American Development Bank, and other counterparts was executed in 2012 to demonstrate the different approaches on micro enterprises for tertiary rural roads maintenance.

Mainstreaming a gender perspective and an inter-cultural approach on WASH
The MDG-F Joint Programme for Economic Governance on Water and Sanitation began in February 2009 with the aim of implementing a new model of participatory management mechanism in drinking water and sanitation services. A comprehensive strategy included the capacity building of the public sector for the design, management and implementation of a sectoral policy and the development of new financing mechanisms and projects to increase coverage in a sustainable manner. This program took a gender perspective and an inter-cultural approach. The main beneficiaries of the program were dispersed rural populations and indigenous communities in specific areas, as well as public and community institutions (Sanitation Boards). This joint program had the support of the government, at the national and local level, and of several United Nations agencies that participated, namely UNDP, UNICEF, PAHO-WHO and the ILO.

The Paraguayan project “Strengthening the ability to define and apply water and sanitation policies” started in 2011. It stressed the importance to empower rural and Guarani indigenous populations to manage their own water resources and thus improve the quality of, and access to, public water and sanitation services.

A similar project was developed in Nicaragua and Panama, with similar challenges to incorporate a gender and inter-cultural approach throughout the project. A participatory mechanism was needed to share community based experiences and discuss technical issues. Thus an innovative strategy of knowledge sharing and pasantias was developed to maximize ILO’s technical expertise.

The involved actors were local communities, institutions, UN agencies and the ILO as the leading technical Unit. In the experience-sharing meetings, people from different groups participated, including Ayoreo, Nivaclé, Guarani Occidental and Abaí Guarani indigenous leaders, women leaders from the communities of Kankintu and Kusapin, Comarca Ngabe Bugle, Ño Kribo and local government authorities. These meetings focused on planning and consulting with Indigenous communities, as a way of community prioritisation and identification of local knowledge on water provision.

This initiative South-South Cooperation between Panama, Nicaragua and Paraguay on water management and sanitation in indigenous and dispersed rural communities, with a gender perspective and an inter-cultural approach, has been recognised as innovative since it highlighted indigenous knowledge and gender empowerment in the process of project implementation to access public services of quality.

Further Reading

  • Yeng, J.A.; Sosa, E.; Van Dissel, S. C.. Estudio legal sobre la participación de Micro y Pequeñas Empresas en las Contrataciones Públicas en el Paraguay. 2007. Organización Internacional del trabajo, Asunción.
  • Alfred, N. A.; Van Dissel, S. C.. Paraguay, El uso de tecnologías intensivas en empleo en las inversiones públicas. 2006. Oficina Subregional para el Cono Sur de América Latina y el Programa de Inversiones Intensivas en Empleo, OIT, Santiago.
  • Alfred, N. A.; Van Dissel, S. C.. Resumen del estudio sobre el uso de tecnologías intensivas en empleo en las inversiones públicas en Paraguay. 2006. Oficina Subregional para el Cono Sur de América Latina y el Programa de Inversiones Intensivas en Empleo, OIT, Santiago. Subregional Office for the South Cone of Latin America: SRO-Santiago
Series: Guías para el desarrollo de procesos de planificación integrada del acceso rural en el sector de agua y saneamiento