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1. The Committee notes the information contained in the Government's reports for the periods ending May 1996 and May 1998. The Government indicates that the total potential workforce is growing in Hungary, yet there has been a decrease in labour supply in response to a decrease in labour demand. The decrease in demand is due to massive reductions in agriculture and industry. The decrease in supply is due mainly to increases in early retirement and the rate of post-secondary education. The shrinking of the employed population stopped at the end of 1996, but the overall level remains very low. The number of economically inactive persons has been consistently growing, as the employed labour force decreased from 50 per cent in 1990 to only 36 per cent in 1996. Furthermore, the duration of unemployment has increased to an average of 19 months in 1998. The long-term unemployed as a percentage of total unemployment reached 54.4 per cent in 1996, but dropped slightly to 49.8 per cent in 1998. However, youth unemployment has decreased, the result of a targeted active labour market policy.

2. The Government explains that it has moved from a crisis-oriented management strategy to a growth-promoting strategy. Its objectives include increasing the number of workplaces, promoting structural adaptation of the workforce, assisting in the prevention of unemployment, and reintegrating the unemployed and inactive populations. The Committee notes the programmes adopted to this end, including: training of various targeted groups, increasing the availability of training, providing financial assistance to employers with liquidity problems to avoid closures, assistance to unemployed persons wanting to set up their own business, support to organizations providing public benefit employment, and funding for travel costs for long-term unemployed accepting work involving a substantial commute. The Government has also changed the condition for receipt of unemployment benefit, to encourage the unemployed to accept jobs without risking loss of benefit in case the job does not last.

3. The Committee notes that the labour market participation rate is higher for men than for women. According to the Government's report, this is in part because of social attitudes. The Committee recalls that under Article 1(2)(c) of the Convention ratifying States undertake to provide the fullest possible opportunity for each worker to qualify for, and to use his skills and endowments in, a job for which he is well suited, irrespective of, inter alia, sex. The Committee would appreciate receiving further information on what measures the Government has taken to achieve this important objective of the Convention, and statistical information on their impact on promoting employment amongst women, as requested in the report form under Article 1 of the Convention.

4. The Committee also notes that the Government has dissolved the Labour Ministry, and has parcelled out its previous functions to various separate ministries, such as the Ministry of Economy and the Ministry of Education. The Committee asks the Government to supply detailed information on the procedures adopted to ensure that the effects on employment of measures taken to promote economic development or other social objectives receive due consideration, at both the planning and the implementation stages. Please also explain how the principal measures of employment policy are decided on and kept under periodical review within the framework of a coordinated economic and social policy, as requested in the report form under Article 2. It would also appreciate further information on how the dissolution has affected consultation with workers' and employers' representatives as well as with representatives of other sectors of the economically active population, and what measures have been taken both to ensure that the views of these groups are taken into account in formulating economic and social policies and to enlist their support for such policies, as requested in the report form under Article 3.

5. Lastly, the Committee notes the conclusions, approved by the ILO Governing Body, of the committee set up to examine the representation alleging non-observance of the Convention made under article 24 of the ILO Constitution by the National Federation of Workers' Councils (NFWC). In its conclusions, the Committee considered that there was not sufficient information to make a determination regarding the effect of the Supplementary Budget Act of 1995, requiring a reduction in personnel expenses in the institutions of higher education, on the Government's declaration and pursuance of an employment policy in accordance with the Convention. The Committee asks that such information be included in the next report.