Foundations for Change: Aspects of the Construction Industry in Developing Countries - Hardcover

Edmonds, Geoff; Miles, Derek

Hardcover

ISBN 10: 0946688001 ISBN 13: 9780946688005

Verlag: Practical Action Publishing, 1984

Inhaltsangabe

The construction industry pattern of most industrialized countries is often unsuited to the needs of developing countries. Case studies in Ghana and Sri Lanka suggest a new approach, and illustrate how existing frameworks could be changed.

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Über die Autorin bzw. den Autor

Dr Derek Miles is a Fellow of the Institution of Civil Engineers and the Chartered Management Institute, a Liveryman of the Worshipful Company of Engineers and a Freeman of the City of London.

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Foundations for Change

Aspects of the Construction Industry in Developing Countries

By G. A. Edmonds, D. W. J. Miles

Practical Action Publishing Ltd

Copyright © 1984 Intermediate Technology Publications
All rights reserved.

ISBN: 978-0-946688-00-5

Contents

PREFACE, vii, 
CHAPTER 1 THE ECONOMIC FRAMEWORK, 1, 
CHAPTER 2 THE INSTITUTIONAL FRAMEWORK, 21, 
CHAPTER 3 THE CASE OF GHANA, 49, 
CHAPTER 4 THE CASE OF SRI LANKA, 81, 
CHAPTER 5 RELEASING THE CONSTRAINTS, 110, 
APPENDIX SOME LESSONS FROM OTHER ILO STUDIES, 135, 

CHAPTER 1

The Economic Framework

Introduction

One might imagine that an industry which typically consumes 50–70 per cent of public investment, contributes up to 5–10 per cent of GNP, and provides employment to a comparable proportion of the labour force would be universally well-understood and well-documented. It is unfortunate as well as surprising that, in developing countries in particular, this industry — the construction industry — is poorly documented and apparently almost unfathomable. Given that many of its activities are growth related, e.g. roads, ports, irrigation, land reclamation, this lack of knowledge and understanding can, and does, have serious repercussions.

Whilst most development plans describe the expected (or hoped for) outputs of the industry, few pay much attention to the inputs that would be required to produce these outputs. They will describe in detail the number of hospital beds, the intake of children into schools, and the lengths of road that are expected within the plan period, but this is seldom related to the implied demand that this will place on the construction industry. It is rare indeed for such plans to discuss the motivation of, and constraints affecting, the industry; and rarer still to propose practical measures to enable it to meet the demands placed on it. In general, the end products of the industry are considered in detail, and forecasts are made of the necessary output. Little or no attention is paid to the development of the means to achieve the targets so painstakingly described. The inevitable result is a frequent failure to meet planned targets, which is usually blamed on the conservatism, intransigence or plain incompetence of those involved, rather than a cool analysis of cause and effect.

In the developed countries of the world, the construction industry is generally flexible enough to be capable of meeting the fluctuating demands that are placed upon it (although the cost of the cycle of underused-to-overstrained resources is still considerable). Furthermore, these economies are not dependent upon the industry for growth. A basic infrastructure already exists, and the level of production of houses, schools and hospitals is such that a reasonable quality of life is assured. However, most developing countries do not have as yet sufficient basic infrastructure, such as ports, roads, dams, etc., to sustain an acceptable level of economic development. Furthermore, the number of houses, schools and hospitals is inadequate for social and community needs. Whilst the level of construction output that would be required to initiate and maintain economic growth is extremely high, indigenous financial resources are usually extremely limited. The share of the developing nations, comprising two-thirds of the world's population, in world construction output is of the order of 15 per cent. Further, the construction investment per capita in the developed nations is some 30–35 times greater than in the developing countries.

Besides the direct implications for development, the employment aspects of the industry are far from satisfactory. Thus, whilst the construction industry does offer the possibility of large-scale employment creation, most developing countries rely heavily on the use of equipment. (References to the industry as equipment-intensive do not imply that it is so in any absolute sense. Rather it is more equipment-biased than is justified given the labour-abundant resources endowments of most developing countries.) Very little construction equipment is manufactured in the developing countries and consequently much of the limited investment that goes to construction is spent on imports. In the industrialized countries the reliance on equipment is the natural, and logical, result of the high level of wages and the relative shortage of labour. In the developing countries the emphasis is placed on equipment in spite of the availability of a large number of workers willing to work for relatively low wages. Whilst standards of efficiency and quality certainly have to be maintained, it is paradoxical, in view of the industry's undoubted potential for employment creation, that on average the proportion of the population employed in construction is five or six times lower in the developing countries than in the developed ones.

The construction industry occupies an important place in any country's economy. It provides an appreciable share of the gross domestic product and generates a high proportion of the gross fixed capital formation. Even in the developed nations (and a fortiori in the developing ones) construction is relatively labour-intensive, in the sense that it uses a larger number of workers per unit of output than most other industries, and as such is also important as an employer.

In this chapter the industry is situated statistically in relation to the economy in general. A word of warning is apposite here. Several writers have attempted to go one stage further and suggest that the type of relationships developed in this chapter can be used to predict employment and investment changes in the industry. This can be extremely hazardous if the nature of the causal relationships are misinterpreted, and we shall return to this issue later in this chapter.

A Statistical Overview

In financial terms, the industry converts financial investment into physical assets such as industrial plant, buildings, roads and general infrastructure. This creation of fixed assets to enable other economic activities to take place is an extremely important aspect of the industry. In both developed and developing nations construction usually accounts for over 50 per cent of fixed capital formation. The market for enterprises in, or associated with, the construction industry is, therefore, largely determined by the level of investment. As an example Figure 4 shows the close correlation between gross domestic capital formation and construction output, in this case for the United Kingdom. It is not surprising that the workload of the industry in the public sector is directly affected by the level of government investment. But in the private sector, also, central government action on bank rates, credit facilities and taxation effectively controls the level of demand for the industry's services. The industry is, therefore, intrinsically very susceptible to government policy. What is more, it is used by governments as a regulator for promoting or suppressing economic growth.

The activities of the industry have long been seen by central governments as a convenient short-term means of dealing with unemployment. However, in the developing nations where high unemployment is an established and continuing fact of life, there is now a growing appreciation of the potential role of the industry in helping to alleviate the structural aspects of the problem, rather than as a short-term panacea.

The industry also has significance in the economic balance of trade....

Details zur Ausgabe

• Verlag: Practical Action Publishing
• Erscheinungsdatum: 1984
• Sprache: Englisch
• ISBN 10: 0946688001
• ISBN 13: 9780946688005
• Einband: Gebundene Ausgabe
• Anzahl der Seiten: 152
• Kontakt zum Hersteller: Nicht verfügbar
• Verantwortliche Person: preigu; mail@preigu.de; ; Lengericher Landstr. 19; Osnabrück; 49078; Deutschland