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1. The Committee notes the Government’s report received in August 2006 and the observations made by the Inter-Union Assembly of Workers – National Convention of Workers (PIT–CNT), which were received in October 2006.

2. Articles 1 and 2 of the Convention. Application of employment policy in the framework of a coordinated social and economic policy. According to the data provided by the Government, the recovery of the Uruguayan economy made it possible to return, at the end of 2005, to the level of production that existed prior to the economic recession at the end of 1998. According to the information published by the Economic Commission for Latin America (ECLAC) in the Preliminary overview of the economies of Latin America and the Caribbean 2006, with GDP growth of 7.3 per cent in 2006, the country continued its growth path as a result of the increases in both exports and internal demand, a stable fiscal situation, a moderate external deficit and inflation of around 6 per cent. As a result of the increase in employment and real wages in 2005, urban poverty decreased by almost 1 per cent in very poor households, and 3 per cent in poor households. The labour market showed signs of recovery: job supply rose by 1.6 per cent, with a fall in the unemployment rate to 12.2 per cent. The Committee notes the policies implemented by the Government with a view to increasing the level of employment directly and promoting employment through macroeconomic stability and the encouragement of investment. The Government has also endeavoured to extend and diversify markets for exports with a view to promoting job creation. The National Employment Promotion Strategy is designed to increase employment levels, provide mediation between supply and demand, prevent unemployment and provide appropriate protection in the event of unemployment. The Committee requests the Government to provide specific information in its next report on the results achieved through the measures adopted for the creation of productive employment and the reduction of unemployment and underemployment. It also requests information on the results of the measures adopted by the National Directorate of Employment (DINAE) for the progressive integration of the informal economy into the formal labour market. The Committee recalls its interest in being provided with information on the manner in which the objectives of full employment are taken into account when formulating national economic policy and on the difficulties encountered in reducing poverty levels.

3. The Government indicates that Commission 2 of MERCOSUR Labour Subgroup 10 has addressed subjects related to employment, vocational training, labour migration and the Labour Market Observatory. It also supported a high-level group for employment. The PIT–CNT observes that the approach to labour matters adopted over the past four years has been characterized by inertia and has not been productive. The Committee once again expresses interest in being provided with information on the measures that have been adopted in the context of MERCOSUR to promote active policies for full employment and the progress achieved in adapting labour market measures to changes in international trade.

4. Education policies and the supply of vocational training. The Committee notes with interest the increase in the budget allocated for public expenditure on education. It recalls the importance of education and training policies as an integral part of economic strategies and for the promotion of employment opportunities in a context of a global economy that is in constant transformation. The Committee requests the Government to continue providing information on the measures that are being adopted by the Government to improve the employability of the labour force through training measures.

5. Article 3. Participation of the social partners in employment policies. The PNT–CNT has transmitted a proposal for the establishment of a national employment institute to coordinate the various state bodies related to employment and vocational training. According to the PIT–CNT, there is a dispersion between the bodies responsible for unemployment insurance, vocational training, employment programmes, placement and skills certification. The PIT–CNT further indicates that the local employment committees lack support and are not taken into account in the National Employment Promotion Strategy. The PIT–CNT adds that the convening of Wage Boards has not been put to good use in terms of employment and vocational training policies. The Committee would like to examine in the next report the manner in which the opinions expressed by the social partners in relation to the application of the Convention have been taken fully into account. In particular, the Committee requests the Government to ensure that the information contained in its next report covers the action taken in relation to the proposals made by the PIT–CNT to overcome the weaknesses that have to be resolved with a view to achieving, with the participation of the social partners, the objectives of full and productive employment set out in the Convention.