Employment-intensive Investment in Peru

Web page | 08 February 2017

Current Involvement

In 2011, the new Peruvian government renamed the ‘Construyendo Peru’ programme for “Trabaja Peru" which was created to target households in poverty and extreme poverty, as the previous one. This programme, which is part of the Ministry of Labour and of Employment Promotion, aims to create jobs through social and environmental infrastructure development and promote sustainable and quality employment for unemployed and underemployed population in urban and rural areas. For this purpose, Trabaja Peru establishes two intervention strategies:
  • Mitigation of urban unemployment, oriented at generating temporary employment for the poor and unemployed people living in urban areas
  • Mitigation of unemployment due to natural emergencies such as natural disasters, oriented at generating temporary employment for the poor and unemployed people 
Trabaja Peru is articulated with job training programs of the Ministry of Labour and Employment Promotion (PETM), such as the Jovenes a la Obra (Youth at Work) Program and the Vamos Peru Programme. The linkage is given under the logic of continuity and of complementarity in promoting sustainable employment in a steady perspective.

This Public Employment Programme with the collaboration of the Employment Vice Ministry was analysed and developed as a case study and translated into English to be used as a successful example in ILO/EIIP’s training courses. (to be published soon)

Historical Information

From 1998 to 2003, the Lima Subregional Office of the ILO has carried out the project of Promotion of employment intensive technologies in public investments in Peru, Bolivia and Ecuador with funding from the ILO/DANIDA (Danish International Development Agency) agreement. The project concentrated initially on promoting the Employment Intensive Investment Programme (EIIP) concept and familiarizing potential counterparts in the three countries.

In Peru, the project provided technical assistance to the rural roads programme (PCR) upon a specific request. It concerned the future transfer of responsibilities from the programme to the corresponding municipalities, and its consequences on municipal budgets and the small contractors involved.

The study found that:
  • When control is transferred to municipalities (at that time), they are unable to finance the required maintenance activities on their road network (and thus unable to contract the enterprises created under the PCR), and lack the possibility to generate tax revenues. Some recommendations were made on modifications of the Fondo de Compensación Municipal (government transfer to municipalities), to cover the necessary expenses on road maintenance;
  • Instead of the flat rate which was paid to all contractors, there was a need to introduce variable rates that reflected the topography and traffic density of each road;
  • Neither the local authorities nor the enterprises were prepared for a future in which contracts would be awarded through a tendering process. Besides this, the project participated actively in workshops and seminars which allowed it to diffuse its viewpoints. The speech delivered at the PROVIAL congress (August 19, 1998) on the promotion of employment in investments in reconstruction forms a good example.
As a result of this project, the Peruvian government adopted a road maintenance plan as a State policy which was soon transferred to local governments. This case study in rural roads took an integral gender-based approach at the national level.

The ILO also collaborated in the design and implementation of the Public Employment Programme “Construyendo Perú”, which targeted households in poverty and extreme poverty and prioritized social and environmental solutions and green works, in the design of projects. The programme also included two levels of capacity building schemes: vocational training and technical training to enhance employability of the target population.

Further Reading