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1. The Committee notes the Government’s detailed report for the period ending in May 2004, which contains useful information relating both to the measures adopted and the 2003 observation.

2. Application of employment policy within the framework of a coordinated economic and social policy. The report indicates that it had been impossible to prevent the poverty level from rising to affect 20.5 per cent of households. Almost one-third of the population lives below the poverty line. Unemployment affects all groups of workers. The Government summarized the compensatory policy instruments that form a large part of the activities of the National Directorate of Employment (Vocational Training Programme, Productive Investment Programme and Productive Training Programme, as well as other specific programmes aimed at young people, women and rural workers). The report also mentions welfare measures (such as food-related welfare programmes and unemployment benefit). According to more recent information, in the last quarter of 2004, the unemployment rate stood at 12.1 per cent of the economically active population. In comparison to the unemployment rate registered in the same three months of 2003, a downward trend in the rate of unemployment was maintained. Furthermore, the trend in the rate of employment remained positive and employment increased by 1.5 percentage points (in terms of the Uruguayan urban total, just over 50 of every 100 people of 14 years of age or over were employed by the end of 2004).

3. The Committee asks the Government, in its next report, to indicate the impact of the programmes adopted, particularly using funds from the Occupational Retraining Fund, to incorporate unemployed persons into the labour market. In general, the Committee would like some information that would enable it to assess the way in which the promotion of employment is a central objective of all available macroeconomic policy mechanisms, especially of monetary, financial, budgetary, trade and development policies. The Committee reminds the Government that it is important from the outset to consider employment objectives "as a major goal" in the formulation of economic and social policy if these objectives are truly to be an integral part of the policies that are adopted (see paragraphs 487 and 490 of the General Survey of 2004 on promoting employment). The Committee requests that the Government, in its next report, include information on the way in which due account has been taken of the objectives of full employment when formulating new approaches to economic and social policy.

4. In reference to the 2003 observation, the Government indicates that it has made the defence of dignified and decent work, as advocated by the ILO, one of its main arguments for the reduction of the agricultural subsidies that the main developed countries pay its producers and that it is in favour of fair and balanced globalization. Please continue to include information on the measures taken within the MERCOSUR framework to promote active policies for full employment and on the progress made in adapting labour market measures to changes in international trade.

5. ILO technical assistance. The Committee notes with interest that, in November 2002, views were exchanged with specialists from the ILO subregional office in order to prepare the Direct Employment Programme and the Micro and Small Undertakings Programme. The Government also mentions ILO studies that have been used by the research division of the National Directorate of Employment (DINAE). Furthermore, a technical audit report on the beneficiaries of the Community Activities Programme (December 2003, prepared by an ILO consultant) is attached to the report. The Committee would be grateful if the Government, in its next report, could continue to provide information on the activities undertaken, as a result of ILO assistance, to improve the coordination of and strengthen the programmes aimed at creating productive employment in accordance with the Convention.