47554 World Bank Safety Nets Primer Notes 2008 No. 27 HighLabourIntensive(HIMO)PublicWorksinMadagascar: IssuesandPolicyOptions High labour intensive (HIMO) public work programs have respond to increased vulnerability during the pre-harvest been very popular in recent years in Madagascar. They period and after natural disasters. International have been one of the most common safety net program experience confirm the potential of public works in used to address poverty and vulnerability. The objective helping the poor cope with covariate risks associated of these programs has been to provide income support to with climatic and systemic shocks. the poor in critical times, e.g.after natural disasters, or to respond to seasonal shortfalls in employment during the Are HIMO effective and efficient safety nets agricultural slack period (soudure), and to improve much instruments in Madagascar? This brief highlights the needed local infrastructures. findings of a study byAndrianjaka and Milazzo (2008), which follows up on an earlier study done by Johnson, Poverty and vulnerability are widespread in Madagascar. Van Imschoot, and Andrianjaka (2007), and assesses Households are subject to various climatic, economic, the effectiveness of HIMO in addressing the needs of health and social shocks that put them at risk of falling poor and vulnerable households in Madagascar. The into or remaining in poverty. The main covariate shocks work summarized in this brief covers a detailed analyses are political instability, fluctuations in rice and other based on 15 HIMO projects implemented in the last 24 traditional product prices, natural disasters, and livestock months by several agencies. The main finding of the and plant diseases; while the main idiosyncratic shocks study is that despite their great potential, labour intensive are health crises, school dropout, unstable employment, public works projects have shown considerable and lack of security (del Ninno, Mills and Rajemison limitations in the Madagascar context. These mainly 2004). include: a) lack of coordination among HIMO projects implemented by different agencies; b) ineffective The Government has recently increased its commitment targeting and poor selection or projects; c) lack of to assisting poor households to prevent, mitigate and cope monitoring and evaluation. with the consequences of these shocks. The Poverty Reduction Strategy Paper, presented by the Government 1. Lack of coordination in 2003, calls for a national strategy for social protection to address risks and vulnerabilities as a central challenge - Several and uncoordinated institutions are to reduce poverty and improve human capital in involved in financing, implementing and Madagascar. To supplement effective implementation executing HIMO projects. Different agencies of policies in the area of social protection, the Government have different objectives in mind going from (in collaboration with stakeholders and partners) the creation of short term employment developed a National Risk Management and Social opportunities in response to natural disasters and Protection Strategy (NRMSPS) in 2007. One of the other shocks (i.e. Social Fund for Development priority areas of the NRMSPS focuses on increasing (FID), WFP) to the creation and revenues among vulnerable groups and identifies improvement of basic infrastructures (i.e. HIMO projects as interventions that should be used to ILO). Anna Maria Milazzo prepared this note based on Andrianjaka N. and Milazzo A. (2008). "Highly Labor-Intensive Public Works in Madagascar: Issues and Policy Options". Social Protection Discussion Paper. No 0836, The World Bank Table 1: Timing and duration of HIMO projects Region HIMO Project Agency Period of implementation Duration of works Analamanga Project N°1 FID May-June 20 jours Project N°2 May-August 75 jours Anosy Project N°3 BIT May ­ July 71 jours Project N°4 April - May 70 jours Project N°6 Feburay 20 jours Project N°7 February 30 jours Androy FID Project N°8 March 20 jours Project N°9 April 15 Jours SAVA Project N°11 FID May 15 Jours Project N°14 FID May 10 Jours DIANA Project N°15 ONN April-May 25 Jours Source: FID, BIT, ONN. - Depending on the particular shocks affecting (see table 2), with the exception of the projects different areas of the island, HIMO projects implemented by ILO (higher quality are usually implemented after the hurricane constructionandrehabilitationworks,requiring season (from May) and during the technical expertise and more capital intensive agricultural slack period (which takes place methods) in which the weight of non-wage at different times of the year depending upon costs is higher and wage costs range from 23 the regions and the agricultural calendar) (see to 42 percent of total program cost, for most table 1). In the RegionAndroy, where cassava part going to more skilled workers. is the main staple food products, the lean period is approximately between October and April 2. Ineffective targeting and generally lasts 7 months. - Multiple and poorly defined approaches to targeting are used by the different agencies - The nature of the works undertaken reflects in Madagascar, which have been generally the objectives of the financing and found to be ineffective in selecting the poorest implementing institutions, including the areas and the neediest population. The construction and/or rehabilitation of basic NRMSPS (2007) showed that wealthier infrastructure (roads, irrigation canals, small households were more likely to report their dams, and bridges), canals and roads cleaning, participation in HIMO projects to cope with planting trees or reforestation. The labour shocks than the poorer ones (see table 3). intensity is in general very high, about 80% Table 2: Participation, wage and total costs, and labour intensity of HIMO projects, by agency Wage cost (in Total cost Labour Region HIMO Projet Agency Number of Number od Ariary) (in Ariary) Intensity workers person-days (a) (b) (a/ b) Analamanga Projet N°1 FID 300 6 000 9.420.000 11.774.500 80% Projet N°2 123 9 200 31.715.488 139.745.088 23% Anosy Projet N°3 BIT 65 3 438 25.340.448 7.196.448 28% Projet N°4 70 4 239 9.804.868 23.508.568 42% Projet N°6 300 6 237 9.744.541 12.180.677 80% Projet N°7 633 4 626 7.778.200 9.723.320 80% Androy FID Projet N°8 499 5 031 7.937.200 9.926.720 80% Projet N°9 141 2 113 3.294.500 4.113.950 80% SAVA Projet N°11 FID 309 4 641 7.176.500 8.970.625 80% Projet N°14 FID 338 3 376 5.229.000 6.536.250 80% DIANA Projet N°15 ONN 353 9 182 13.772.500 16.622.000 80% Source: FID, BIT, ONN. Table 3: Household Coping Strategies by Poverty Level Q1 Q5 Coping strategy Q2 Q3 Q4 Total (Poorest) (Richest) Work more 47.2 43.6 43.5 40.3 34.3 40.9 Reduced food consumption 20.2 20.7 22.3 22.8 24.4 22.4 Did nothing 17.1 17.8 19.5 18.3 23.8 19.8 Sold livestock 3.9 4.9 3.8 4.3 1.4 3.5 Spent savings or investments 2.1 1.6 2.6 3.4 4.3 3.0 Stopped consuming certain goods and services 2.1 2.9 2.5 2.1 3.0 2.6 Worked in public works (HIMO) 1.7 1.9 1.5 3.0 2.5 2.2 Sold harvest in advance 0.7 1.2 0.8 1.3 1.8 1.2 Other family members worked 2.2 0.9 0.8 0.8 0.7 1.0 Obtained a loan from a friend 0.6 0.6 0.6 0.8 0.8 0.7 Obtained a loan from family member 0.5 0.7 0.3 0.3 0.4 0.4 Sold other goods 0.2 0.2 0.3 1.0 0.3 0.4 Obtained a loan from bank or mutual 0.0 0.4 0.0 0.2 0.6 0.3 Source: INSTAT/DSM/EPM 2004. Note: Other answers included loans from other individuals, sale of jewelry, rental of land, sale of land or house, sale of equipment = all of insignificant magnitude (under 0.1%). - The selection of the project areas is not guided - The targeting effectiveness may be weakened by central poverty or vulnerability criteria. by the fact that wages are set too high thus However, the communities (represented by the impeding the poorer to self-select themselves Fokontany or Commune) have an important into the projects. In most of the projects role in the selection and proposal of works to reviewed, the wage rate for unskilled workers be undertaken. The projects have to be is higher that the prevailing market wage, with approved by local administrative authorities the result that the better-off workers are (each implementing agency has to obtain the competing for limited HIMO jobs in the same approval from different authorities). For the areas (see table 4). approval, projects have to satisfy some criteria set by the various implementing agencies (i.e. - Because of the high wages and the greater technical feasibility, availability of materials, demand for employment than the employment minimum labour intensity, eligibility of the opportunities created, almost everywhere a project areas, etc). rotation system was applied to give a chance to work the largest number of poor people. Table4: Wage level in HIMO projects versus the market and the minimum wage by implementing agency and region Daily wage rate in Market daily wage Minimum daily wage HIMO project rate (in Ariary) Wage comparison Region Agency (in Ariary) (in Ariary) (a) (b) (c) skilled unskilled skilled unskilled skilled unskilled skilled unskilled Analamanga FID 2 500 1 500 3 478 1 506 a < b et > c a ? b < c BIT 2 464 1 792 a < b et > c a > b et < c Anosy 3 431 1 027 CARE (d) 10 000 5 000 a > b et > c a > b et > c Androy FID 2 500 1 500 1 421 1 027 2 008 1 833 a < b et > c a > b et < c SAVA FID 2 500 1 500 3 161 1 461 a < b et > c a ? b < c FID 2 500 1 500 a < b et > c a < b ? c DIANA 3 163 1 812 ONN 2 250 1 500 a < b et > c a < b ? c Source: FID, BIT, ONN, CARE, EPM 2005. Notes : (a) 1 work day = 5 hours; (b) EPM 2005 data; (c ) Minimum wage according to the law; (d) each worker is required to work 8 hours daily in CARE projects. 3. Lack of monitoring and supervision (through the transfer of income and indirectly via the assets created), resources must be allocated - The lack of a monitoring system tracking to poorest areas (which are often the ones most information on HIMO projects (i.e. prone to shocks) according to a thorough mapping disaggregated data on the expenditure for of poverty. The most vulnerable populations are salaries, materials and other inputs; household located in rural areas, remote communities, and level data, etc) hinders the possibility to communes with poor infrastructures, where evaluate their impact and thus identify areas poverty rates are higher. The identification of the of improvement. intervention zones should be followed by the identification of the poorest within those areas. - The lack of technical capacity to supervise the The role of the local communities in the selection works of several agencies resulted in poor ofinfrastructurestobebuiltorrehabilitatedthrough quality of infrastructures built or HIMO projects should be maintained and rehabilitated through HIMO projects. strengthened to ensure the sustainability of assets created. Based on the analysis of individual HIMO projects, some priority areas of improvement have been Wage rate setting to promote self selection identified and grouped into four policy of the poor. If HIMO projects are to provide an recommendations. income transfer to the poor and most vulnerable population through short term work opportunities, Harmonization and improved coordination thewagerateshouldbenohigherthattheprevailing of HIMO projects. To become an effective market wage for unskilled workers. Given the instrument of national social policy to respond significant regional differences in the average tosituationsofgreatvulnerabilityinMadagascar, levels of income, the establishment of a uniform HIMO interventions need to be harmonized by rate by HIMO work in all regions of Madagascar applying the same criteria and norms would not be appropriate. The level of everywhere. As stressed by the NRMSPS, remuneration can be adjusted according to the local efforts in the short and medium-term should be socio-economic conditions, but always lower than made to clarify and harmonize the objectives the corresponding market segment. Specific rules and criteria (such as wage levels, intervention and standards have to be set in the process of zones, intervention triggers) of existing HIMO harmonizing projects policies. programs. The capacity of the government (and its decentralized institutions) to coordinate the Improved monitoring and collection of execution of HIMO projects must be reviewed information to evaluate the impact of HIMO and improved to ensure the effectiveness and projects. Asystem of monitoring and evaluation consistency of approaches among the of results should be established to allow systematic interventions. evaluation of the programs and thus identify issues and areas of improvement to further strengthen Geographical targeting and selection of the social protection system and provide the basis projects. To increase the impact on the poor for rational planning.