Observation (CEACR) - adopted 1994, published 81st ILC session (1994)

Employment Policy Convention, 1964 (No. 122) - Costa Rica (Ratification: 1966)

1. The Committee notes the Government's brief report which merely provides statistics for 1987 to 1991 and a document on recent economic developments and prospects for 1993, produced by the Central Bank of Costa Rica.

2. According to the above document, there was significant growth in the Costa Rican economy in 1992. The Central Bank indicates that, as a result of a more dynamic economy, there was considerable growth in employment with prospects for reconciling growth objectives with equity and counteracting the effects of the reduction in the number of public sector jobs as part of the efforts to reduce state control. In 1992, there was further progress in the opening of the economy through the modernization of the currency exchange regime and acceleration of the process of lowering customs tariffs. These measures were reflected in a drop in import prices, with the beneficial result of lower inflation and a higher level of economic activity. The programme proposed for 1993 by the Central Bank was designed first and foremost to achieve a GDP increase of 4 per cent in real terms, reduce inflation and increase net currency reserves. These objectives were to be attained by reducing the total public sector deficit to 1 per cent, at most, of GDP, a prudent wages policy, restrictions on loans and the maintenance of a fixed exchange rate regime for the market. Structural measures aimed at a further reduction in import tariffs, substantial liberalization of price controls and public sector reform.

3. With regard to the growth in employment referred to by the Central Bank, the Committee is bound to note that according to the statistical data of the Ministry of Labour, between 1990 and 1991 the general level of employment stagnated and even dropped slightly (by approximately 1 per cent, whereas women's employment grew by some 3 per cent), and that the unemployment rate rose from 4.6 to 5.5 per cent of the active population over the same period (with a noticeably greater increase for women), which represents an increase of almost 20 per cent in the number of unemployed.

4. The Committee is only able to note from the report the monetary and budgetary policy measures taken or envisaged. It recalls, however, that in the comments it has been making for several years, it has already requested information on measures to declare and pursue a policy to promote full, productive and freely chosen employment, as required by Article 1 of the Convention, aiming, in particular, to offset both restrictive macroeconomic policies and the reduction of the public sector. So that it may examine in detail the way in which effect is given to the provisions of the Convention, the Committee is bound once again to urge the Government to provide in its detailed report for the period ending June 1994 all the information required by the report form aprproved by the Governing Body. The Government is therefore asked to describe its main policies to attain the objectives of the Convention, and the methods used to ensure that account is taken of the effects on employment of the stabilization and structural adjustment programmes, and that the main employment policy measures are determined and regularly reviewed within the framework of a coordinated economic and social policy (Article 2).

5. The Committee notes that the Government's report makes no mention of any consultations with the representatives of persons affected by the measures to be taken, and particularly with the representatives of employers' and workers' organizations in accordance with Article 3 of the Convention. In this connection, it would be grateful if the Government would indicate whether consultations were held with the social partners on issues linked to employment policy in the context of the August 1991 meeting of the Central Labour Council. Please indicate also whether consultations have been held or are planned with representatives of the other sectors of the active population in the rural and informal sectors.

6. The Committee notes that the report of the 1992 ILO interdepartmental mission, Stabilization, structural adjustment and social policies in Costa Rica: The role of compensatory programmes, which was sent to the Government in June 1993, contains comments on the special employment programmes carried out with the technical cooperation of PREALC. It asks the Government to provide information, as required in Part V of the report form, on action taken as a result of technical cooperation, and on any factors which may have prevented or delayed such action recommended with a view to promoting an employment policy as laid down in the Convention.