Labour Market Reforms Under Tight Budget Constraints

Abstract

The medium-term economic development policy framework presented in parliament in November 2015 envisaged generating one million jobs and improving living standards of workers. The stated goal of employment creation was to be met by encouraging investments in high employment intensity sectors on the demand side, and by improving skills on the supply side. The policy framework gives special attention to create a sophisticated and modern knowledge based economy which is able to compete effectively in the global market. One main challenge faced by the government in achieving the above mentioned labour market objectives are limited public finances. At present the government is attempting to consolidate finances by gradually reducing both the budget deficit and the debt burden. In this backdrop the room for significantly increasing government expenditure is limited.