Observation (CEACR) - adopted 2005, published 95th ILC session (2006)

Employment Policy Convention, 1964 (No. 122) - Nicaragua (Ratification: 1981)

1. Coordination of employment policy and poverty reduction. The Committee notes the report received in September 2004, which contains information on the Enhanced Economic Growth and Poverty Reduction Strategy and the proposed National Development Plan. The National Development Plan indicates that the overall unemployment rate did not change significantly between 1998 and 2001 (it was 11.6 per cent in 2002 and 10.2 per cent in 2003). The unemployment rate is higher among poor households (25.6 per cent). Some 46 out of every 100 employed persons at the national level are in the informal economy, with most of them (28 out of every 100) in own-account activities with very low productivity and income levels. Furthermore, 18 out of every 1,000 employed persons are in the traditional small-scale rural and indigenous production sector. Open underemployment (defined as jobs with fewer than 40 hours a week) accounts for one-third of total employment. The regions with the highest rates of open underemployment are the Pacific and the Atlantic. In order to halve extreme poverty by 2015, it will be necessary to achieve average annual GDP growth rates of 5 per cent (GDP growth was 4 per cent in 2004). The Committee notes with interest that the proposed National Development Plan indicates that "the employment generation policy, understood both from the viewpoint of demand (productive investment) and supply (investment in human capital), is the principal objective of both economic and social policy. Economic growth produced by a conducive macroeconomic environment and social investment has to be articulated so that economic growth objectives benefit the majority of the population, thereby improving the productivity and utility of both large enterprises and small and medium-sized enterprises. In this manner, basic wage income will be increased through the integration of the unemployed and the underemployed (informal sector) into the formal labour market, thereby serving a triple objective: (i) economic reactivation; (ii) the provision of more and better social services; and (iii) the growth of fiscal income, which will in turn reinforce public investment as an instrument of economic reactivation and social development, thereby creating a positive multiplier effect". The Committee notes with interest the information on the process of consultation and participation for the preparation of the National Development Plan, and the assistance received from the ILO for the formulation of the National Employment Policy.

2. As it did in its previous observations, the Committee hopes that the Government will continue its efforts to ensure that the creation of productive employment is central to macroeconomic and social policies when preparing and implementing the national poverty reduction strategy. Indeed, the Committee considers it essential from the outset for employment objectives to be included "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 (paragraph 490 of the General Survey of 2004 on promoting employment). The Committee hopes that the Government’s next report will contain information enabling it to assess the measures adopted for the implementation of the National Development Plan which contribute to achieving the objectives of the Convention (Articles 1 and 2 of the Convention).

3. In this respect, the Committee welcomes the reports prepared by the Office in the framework of the assistance provided to the Government for the formulation of the National Employment Policy, and it trusts that the next report will contain information on the measures adopted as a result of the assistance received from the ILO (Part V of the report form).

4. The Committee asks the Government to provide information in its report on the manner in which lasting employment has been created for the vulnerable groups defined in the National Development Plan. As on previous occasions, the Committee would be grateful to be provided with information on the situation, level and trends of employment, unemployment and underemployment, with an indication of the extent to which they affect the most vulnerable categories (women, young persons, older workers, workers with disabilities, rural workers and the informal economy). In particular, the Committee requests the Government to provide information on the contribution of export processing zones to the creation of high-quality lasting employment.

5. Other matters relating to migrant workers and the functioning of employment services are addressed in comments on the Social Policy (Basic Aims and Standards) Convention, 1962 (No. 117), and the Employment Service Convention, 1948 (No. 88).