Infrastructure and Employment Creation in the Middle East and North Africa by Antonio Estache; Elena Ianchovichina; Robert Bacon; Ilhem Salamon

Author:Antonio Estache; Elena Ianchovichina; Robert Bacon; Ilhem Salamon
Language: eng
Format: epub
Publisher: The World Bank

Sources: Bekhet 2011 for Malaysia; International Labour Organization 2010 for Arab Republic of Egypt; Tregenna 2007 for South Africa.

Note: GDP = gross domestic product; IO = input-output.

Bearing this consideration in mind, the study uses Egypt’s IO table and multipliers to make calculations for the six MENA OICs whose 2009 GDP per capita in US$ is shown in brackets: Djibouti (1,214), Egypt (2,270), Jordan (4,212), Lebanon (8,175), Morocco (2,811), and Tunisia (3,792).9 The Gulf Cooperation Council (GCC) and OECs were judged to be too different in terms of economic structure and GDP per capita levels to make extrapolations from the Egyptian case reliable.

In addition to the five construction activities, information is available on two other broad infrastructure sectors: electricity, and transport and communications (table 3.3). These broad sectors include all types of projects and activities carried out during the year for which the table was constructed, apart from construction in electricity. For example, the electricity sector would include wages paid for operations and maintenance (O&M) during the year in question. Transport and communications is even broader and would include construction in the communications sector.

One can estimate the cost of a job in Egypt in 2009 for each of these sectors based on the employment (type I and type II) multipliers for 2007/08 in the Egyptian IO table. Table 3.4 presents values in US$ for the cost of creating one direct job, one direct or indirect job (type I), and one direct, indirect, or induced job (type II). The data for calculating the costs of a job (direct, type I, or type II) are taken from ILO (2010). Sector wages are adjusted for nonwage benefits and sector employee compensation. Adjustment to 2009 levels was carried out by allowing for growth in GDP per capita over the period from 2007/08 to 2009 and using the official exchange rate in 2009 to convert to US$. The most relevant figures when considering a large-scale program are the costs of creating type II jobs as these give the upper limit to the short-run number of jobs created by a given amount of spending, and hence a lower limit to the cost per job.

Table 3.4 Cost of Creating a Job in Selected Infrastructure Sectors in the Arab Republic of Egypt, 2009

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