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1. The Committee notes the Government's report for the period July 1992 to July 1995, which was received in September 1995. The Government provides a detailed report on the situation as regards employment, underemployment and unemployment in Montevideo and other urban areas, where the unemployment rate appears to have remained relatively stable (around 10 per cent, according to the data available for 1994-95). Precarious employment is reported to be over 15 per cent, while 20 per cent of active workers are engaged in micro-enterprises. The report also indicates that the rate of inflation in Uruguay is the highest of MERCOSUR (and the second highest on the American continent, with an annual rate of 44 per cent in 1994, which was lower than the 1992 rate of 59 per cent). Since March 1995, a new Government has been examining a significant reform of the State, which will also cover the reform of the social security system. The Government also states that an about turn is being made with respect to the previous administration, and that it has explicitly resolved to promote the development of the manufacturing industry for exports through the use of measures to improve its competitiveness and compensate for the negative impact of an outdated exchange policy over recent years. Among the incentives planned to improve the competitiveness of industry, it refers to a reduction in social security contributions, the reimbursement of indirect taxation for exports and a reduction in the financial costs of exports. The Committee notes the above and requests the Government to include information in its next report on the extent to which the employment objectives that have been set are achieved through the adoption of measures in fields such as fiscal and monetary policy, trade policy and investment policy. The Committee recalls that in its previous comments it referred to Part IX of the Employment Policy (Supplementary Provisions) Recommendation, 1985 (No. 169), to draw the Government's attention to the need for an equitable distribution of the social costs and benefits of structural adjustment. In this respect, it would be particularly valuable if the Government would supplement the information provided in the report with indications of the procedures adopted to guarantee that account is taken of their impact on employment when macroeconomic policies, such as those referred to by the Government, are formulated and applied.

2. The Committee notes with interest that Act No. 16320, dated 10 November 1992, established a National Directorate of Employment in the Ministry of Labour and Social Security, with explicit responsibility for formulating the national employment policy, proposing and implementing programmes of occupational and professional guidance, developing programmes of technical guidance and assistance for workers who wish to become small entrepreneurs, etc. A National Employment Board that is of tripartite composition will have the function of advising the National Directorate of Employment, designing retraining programmes for the workforce and administering the Occupational Retraining Fund. This Fund will support activities such as the provision of courses for the vocational retraining of workers and the provision of a one-off benefit to workers who follow retraining courses. With reference to its previous comments, the Committee appreciates the information in the Government's report that progress is being made with regard to consultations, which mainly focus on wages. The Committee welcomes this progress in the application of Article 3 of the Convention, which requires the consultation of the representatives of the persons affected by the employment policy measures to be taken with a view to promoting the objectives of full, productive and freely chosen employment. It would be particularly relevant, in a labour market such as the one described in the Government's report, for the consultations required by the Convention also to be held with representatives of workers in the informal sector and the rural sector, with a view to their eventual participation in the formal consultation machinery described in the report. The Committee would be grateful if the Government would provide information on the measures taken and the results achieved in the field of employment as a result of the action carried out by the National Directorate and Board of Employment, as well as by the Occupational Retraining Fund.

3. The Committee also notes with interest the numerous references made to the technical cooperation received by the Government from the ILO in the field of employment. In this respect, reference should be made to the priorities identified by the National Director of Employment to the multidisciplinary advisory team in the field of employment. The assistance of the ILO will be sought in the fields of occupational guidance for women, advice on the formulation of employment policies for extremely poor categories of the population, the implementation of strategies relating to employment in the informal sector, the formulation of strategies concerning migration for employment in the context of regional integration, and the establishment of technical expertise for the formulation and implementation of employment policies. Since these are aspects covered directly by the Convention, the Committee hopes that the assistance and advisory services required will be provided as soon as possible with a view to further promoting the application of its provisions. In this respect, the Committee requests the Government to describe fully in its next report the action undertaken, with an indication of any factors which may have prevented or delayed the action planned in the field of employment policy in cooperation with the ILO (part V of the report form).

4. The Committee also notes the assistance received by the Government from other bodies, such as CINTERFOR-ILO, for the training of persons receiving unemployment benefit; the Inter-American Development Bank, through a programme to reinforce social policy; and the German technical cooperation agency (GTZ) for the introduction of the dual training system. The Committee trusts that in these activities account is also taken of the instruments most directly related with Convention No. 122, such as the Human Resources Development Convention (No. 142) and Recommendation (No. 150), 1975, and the Employment Promotion and Protection against Unemployment Convention (No. 168) and Recommendation (No. 176), 1988. The Government may consider it useful to refer to the above instruments when including information in its next report on the results of the measures taken to coordinate its unemployment insurance scheme with its employment policy, as well as with regard to the close relationship existing between vocational guidance and training and the employment policy measures adopted.