20000215

Argentina vows to reduce unemployment

BUENOS AIRES: Argentina's new centrist government on Sunday said it would cut unemployment by two percentage points within a year as its efforts to revive the nation's recession-hit economy take hold.

Guillermo Rozenwurcel, Secretary of Small and Medium-Sized Business with the Alliance government, said a law to boost such companies and labour reforms should cut unemployment from its current level of 13.8 percent, or around two million workers.

Just over ten years ago, unemployment was under 9 percent. The cause of job losses have been recurrent financial crises and commodity price shifts that caused two recessions in the last four years in an economy susceptible to external shocks.

Alliance economic reforms are geared to raise business competitiveness and fortify the economy against those shocks.

"Better credit and financing conditions are going to create reactivation in the internal market," Rozenwurcel told local radio. "Commodity prices are improving favourably."

He said a bill to help small businesses, offering $100 million in subsidised loans and a $100 million "seed fund" to start new companies, should enter Congress this week.

The law proposes a 10-15 percent cut in power costs and $100 per month for a year for every new employee hired.

Labour reforms are aimed at cutting costs by allowing wages to be negotiated at company level and not just by sector.

The change would allow companies across the country to negotiate salaries, depending on where jobs are located.

The law seeks to raise the test period on new workers to six months in a move to cut the cost of firing employees. -Reuters