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1. The Committee took note of the Government's report for the period ending June 1996, which contains information in reply to its previous observation and transmits comments made by the Turkish Confederation of Employers' Associations (TISK) and the Confederation of Turkish Trade Unions (TURK-IS). The Committee notes that after a period of sharp recession in 1994, in 1995 and 1996 the economy has had an annual growth rate of around 7 per cent. OECD data show that the volume of total employment increased by 2.5 per cent in 1995 and 3.1 per cent in 1996, while the active population increased by 1.8 and 2 per cent in the same years. According to the October 1996 Labour Force Survey, the rate of unemployment stood at 5.8 per cent of the labour force and that of underemployment at 6.2 per cent. Although these figures show a significant improvement in the employment situation as compared with the previous period, the TISK emphasizes the importance of the structural component of unemployment as well as the particular impact of long-term unemployment and unemployment among young people. The Confederation also draws attention to the serious problem of underemployment, especially in the form of poorly productive and low-paid employment in the informal sector.

2. The Government indicates that implementation of the April 1994 stabilization programme has restored confidence in business activity and brought about an environment more conducive to employment creation, which remains a priority. The customs union with the European Community, which has been in effect since January 1996, should cause recession in employment in the sectors which are not competitive and have been protected in the past, but should improve export and employment prospects in other sectors. In general, the customs union should boost competitiveness in the economy even though it does not lead to an increase in employment in the very short-term. The Government emphasizes that its policy in regard to employment and combatting unemployment relies on a coordinated set of economic and social measures which, in the framework of the Seventh Five-Year Development Plan (1996-2000), highlight human resources development and structural reforms. The TISK, for its part, considers that macroeconomic stability, through the control of deficits, tax and social security reforms, and privatization, is essential to encourage investment and employment. The Confederation stresses that real wage increases should be linked to the growth rate of each sector, that minimum wages should be differentiated by age in order to improve employment prospects for young people and, more generally, that flexibility should be introduced into the labour law. The Committee requests the Government to supply in its next report more detailed information on the measures taken or contemplated within the framework of the Seventh Five-Year Development Plan, particularly in regard to monetary and budgetary policies, investment policy, trade policy, prices, incomes and wages policies. It also requests the Government to describe the objectives of its employment policy in regard to the informal sector, the growth of which, according to the TISK, should be slowed down in order to promote employment opportunities in the modern sector. In this respect, the Government may find it useful to refer to the relevant provisions of Part V of the Employment Policy (Supplementary Provisions) Recommendation, 1984 (No. 169).

3. The TURK-IS considers that the policies implemented by successive governments are contrary to the objectives of the Convention and have resulted in massive redundancies in the public and private sectors alike. The Committee notes that the Government states that it has been implementing a labour force adjustment project since 1994, with financial support from the World Bank, along with funds resulting from privatization. With reference to its previous comments, the Committee requests the Government to continue to supply detailed information on measures encouraging employment in the private sector of workers affected by privatization. The Committee also notes that the Government mentions active labour market policy measures designed to improve the skills of the labour force, provide training for the unemployed, and technical and financial support for small and medium-sized enterprises, as well as special employment projects for regions suffering high unemployment levels. The Committee hopes to find in the Government's next report detailed information on the nature and scope of these measures, as well as results obtained. It also requests the Government to indicate whether assistance is planned for young people who seem to have particular difficulty in finding employment.

4. Article 3 of the Convention. The Government states that the TURK-IS and the TISK participated actively in formulating the employment policies for the Seventh Five-Year Development Plan. It refers, furthermore, to the institution by a Decree of 6 May 1996 of a new Economic and Social Council with considerably more representation of various workers' and employers' organizations as well as other organizations concerned. The TISK, however, considers it of vital importance to give legal status to the Council to ensure its adequate operation. The Committee wishes to recall that the consultations required by this Article of the Convention should relate not only to the formulation of employment policies but also to their implementation, and that they should include, in addition to employers' and workers' representatives, representatives of other sectors concerned by the measures to be taken, such as the representatives of persons engaged in the rural and informal sectors. The Committee requests the Government to supply in its next report information on the consultations actually held on the subject of formulation and application of the employment policy, specifying the opinions received and how they were taken into account. In addition, referring to its 1996 observation on the application of the Employment Service Convention, 1948 (No. 88), it hopes that the Government will soon be in a position to indicate that the advisory committees provided for by the Act of 1946 on the Employment Service are fully operational.