Employment-based works in Madagascar

     Since more than twenty years, NORAD has been providing financial assistance to feeder road rehabilitation and maintenance in the framework of its support to FIFAMANOR, an integrated rural development programme on the highlands of Madagascar. By 1990, GOM and NORAD, with technical assistance from the ILO's Employment-Intensive Investment Programme, decided to shift construction technology from mechanised to labour-based methods. Comparative studies on labour-based vs. mixed or fully equipment-based construction methods have shown that the labour-based option has three advantages:

· Financial costs are about 30 to 80 % lower;

· They generate 2 to 5 times more employment; and

· They save at least 30 % of foreign exchange requirements compared to the more capital-intensive options.

     The programme's impact on poverty reduction is achieved through employment and income generation: as shown in the following table, the monetisation of the rural economy resulting from a 1 million$ investment in feeder roads is about 4 times higher in the labour-based approach (298,000$) than in the equipment-based approach (75,000$ only). The temporary employment generated is also about 4 times higher

     Average labour cost per manday for road construction: 6582 Fmg or around 1 $/day (based on daily remuneration for unskilled labour: 6000 Fmg, Skilled labour: 10.000 Fmg, Headmen: 11.000 Fmg, Officer-in-charge: 15.000 Fmg; Current exchange rate: 7000 Fmg per dollar)

     An injection of 1 million $ into the feeder road sector through labour-based techniques increases GDP by 1.16 million, while the same investment made with equipment-based techniques increases GDP by only 0,682 million. The impact of the labour-based approach on household income and consumption is 2.5 times higher than for the equipment-intensive approach. The relatively low multiplier effect of equipment-based investment results from the high expenditure on imported goods; with a large part of the investment being transferred abroad, the multiplier effect on local production remains limited.

     These remarkable results of the labour-based approach can only be achieved through sustained efforts at capacity-building at various levels, in particular in the small and medium sized entreprise sector. And this is precisely what the NORAD/ILO programme in Madagascar has set out to do.

        In the feeder road sector, for an investment of 1 million $, about 83 km of rural graveled roads can be constructed (average cost/km 12,000$, without considering project overhead costs). The GOM/NORAD/ILO project assigns contracts normally not exceeding 5 to 6 km per contract, which means that about 15 contracts can be awarded. As one contractor can win more than 1 contract if he has the necessary capacity, we can assume that in total, 10 contractors are awarded one or two contracts. The following personnel is trained per contractor:

-         The manager in enterprise management (one week)

-         The officer-in-charge or site supervisor (minimum 4 weeks)

-         At least two headmen (4 weeks).

In summary, about 4 technical/managerial staff per contractor have to be trained in labour-based methods. To these, on-the-job training of a workforce of 60 to 80 workers per entreprise has to be added.

Training programmes for technical and planning staff are organised on contract preparation and supervision; this training is also open to local engineering consultants.

Moreover, the programme has tested successfully various arrangements for feeder road maintenance under communal responsibility; special training programmes for local government and maintenance workers are also provided.

It should be noted that the ILO training programmes do not only cover technical aspects, but also managerial issues, including labour policies and practices, with aview to simultaneously promote job creation and decent working conditions for the labour force.

For the building sector, and in particular school construction, supported by NORAD/ILO in the framework of NORAD’s support to a UNICEF/FLM/GOM primary education programme, the cost of a three class-room primary school is estimated at 17.500$. Hence, for an investment of 1 million $, about 57 schools can be constructed. Here again, depending on the workplan and the capacity of the contractor, one contractor can obtain more than one contract, and one may assume that in total about 40 contractors are involved in a 1 million $ investment programme in school rehabilitation. Upfront training is required for:

-         Preparation of bids

-         Setting out and other technical aspects which need attention

-         Accountability

As these are small-sized contractors, the manager is at the same time the officer-in-charge of the construction. Normally, one technical/managerial staff per contractor is trained. On-the-job training will be provided to a workforce of 20 to 25 workers per contractor.

The table below shows that the building sector, in this case school rehabilitation, can also greatly contribute to reaching simultaneouly objectives of empoyment and income generation, monetisation and poverty reduction. 

                     2/3 are unskilled labour (at 6.000 Fmg/day) and 1/3 are skilled labourers (at 10.000 Fmg/day).

        The policies pursued by NORAD in close collaboration with ILO in the recently approved new phase in the feeder road programme (4,3 million$), and with ILO/UNICEF in the first phase of the new school rehabilitation programme (2,6 million $, covering 100 schools of a total of 300) reflect a comprehensive approach to development which has proven on the ground that objectives such as private sector development, job creation and decent working conditions, monetisation and improved income distribution, decentralisation and accessibility issues (both economic and social), local level capacity building and governance, can be addressed effectively and simultaneously, with better chances –if sustained in the medium term- of mutual reinforcement and accelerated economic and social progress.