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1. The Committee takes note of the Government's report. In a previous observation, the Committee requested information on the application of Articles 1, 2 and 3 of the Convention. In particular, it requested information on the extent to which employment objectives included in development plans and programmes were being attained, particularly those in the 1985-89 National Economic and Social Development Plan; the measures adopted to co-ordinate education and vocational training policies with employment prospects and opportunities; statistics on the labour market situation and on the consequences for job creation of measures such as major public works programmes and the main rural and agricultural settlement programmes. It also requested detailed information on the way in which consultation and collaboration is ensured with the representatives of the persons affected by employment policy.

2. In its reply, the Government describes recent trends in the economy, showing that the economic recovery process which began in 1984 continued in 1987 and 1988. GDP rose by 4.3 per cent and 6.2 per cent in 1987 and 1988 respectively. The data on the employment situation for 1986 and 1987 show a drop in the number of unemployed despite the increase in the active population. In its analysis of the external factors obstructing production and employment growth, the report refers in particular to the terms of trade, the increase in interest rates and the foreign debt burden. In this connection, it provides detailed information on the amount, composition and trends of the external debt, whose balance represented 48.3 per cent of GDP in 1987; debt servicing as a proportion of the value of exports is estimated at approximately 70 per cent. The Government warns that if Paraguay has to service its external debt regularly in the years to come, it will undoubtedly be at the cost of reducing its economic growth rate to a minimum. The Government adds that the foregoing shows the need to propose a new policy on regular external debt servicing to the international co-operation organisations and external creditors. According to the Government, a sizeable reduction in external debt servicing will enable the country to return to former levels of economic growth.

3. The Committee takes note of the foregoing information and would be grateful if, in its next report, the Government could also include the information required by the report form for Articles 1 and 2 of the Convention. It would be useful for example if it stated the employment objectives included in development plans and programmes currently being implemented and described the main employment policy measures as well as the procedures adopted to ensure that the effects on employment of measures taken to promote economic development or other economic and social objectives receive due consideration.

4. The Committee notes that consultation and collaboration with employers and workers is ensured by their permanent participation in bodies such as the Council of State, the Social Welfare Institute, the National Service for the Promotion of Vocational Training, the National Workers' Bank, the National Council on Minimum Wages and the Permanent Board of Conciliation and Arbitration. The Committee would be grateful if, in its next report, the Government would include indications on employment policy measures that have been dealt with by the above bodies and on the consultations held with representatives of other sectors of the economically active population, such as workers in the rural and informal sectors. With regard to the purpose of consultations, the Committee recalls that Article 3 of the Convention provides that representatives of the persons affected should be consulted "with a view to taking fully into account their experience and views and securing their full co-operation in formulating and enlisting support for such policies".

5. In a direct request, the Committee asks for information on other questions related to the application of the Convention.