Addressing Unemployment and Poverty through Infrastructure Development as a Crisis Response Strategy

Economies are boosted by the government stimulus they are getting in response to the financial and economic crisis that has swept through the world. Some of the emerging economies in the Asia Pacific region seem to be growing again and are making a surprising recovery. This rebound has several causes and future analysis no doubt will assess the relative importance of various factors. Boosting domestic spending through economic stimulus measures will certainly be amongst these. Aggressive stimulus packages indeed are helping to revive domestic demand while social safety nets have the potential to mitigate the negative impacts of the crisis on the poor and vulnerable. In addition to boosting short-term economic growth and income generation, these measures can also be used to address longer term development objectives such as job creation, poverty reduction and climate change adaptation. Most countries in the region are in need of further infrastructure development. A share of the economic stimulus spending has therefore been allocated to infrastructure projects. Investments in infrastructure encourage (local) development by improving access to goods and services and reducing transport and transaction costs. It can by the same token also be used as a strategy for generating local income by encouraging the use of employment intensive methods for construction, rehabilitation and maintenance. This paper looks at infrastructure development and public works as a component of crisis response measures in four selected countries and discusses the potential for job creation through the use of employment intensive methods. It briefly touches upon a few key issues to be considered when using employment intensive methods and concludes with a section on resource requirements. Short-term stimulus measures addressing the immediate impacts of the financial and economic crisis have the potential to address longer term development issues such as poverty and climate change. If done properly, investments in infrastructure development and public works can have long-term development benefits which will sustain the impact of the response measures beyond the immediate economic stimulus. Many of the infrastructure works can be implemented using local resources and employment intensive methods creating much-needed jobs for the region's people.download