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Wednesday, July 21, 1999 Published at 06:52 GMT 07:52 UK

Business: The Economy

Japan to create 720,000 jobs

Japan's job centres are straining to cope with the crush of job seekers

The Japanese parliament has passed a 542.9 billion yen ($4.5bn) budget package to fight unemployment. The government hopes that the cash will create about 720,000 jobs.

The country's rate of unemployment currently stood at 4.6% in May, after peaking at a historic high of 4.8% a month earlier.

Most industrialised countries would be happy with that jobless rate, but in a country where companies used to promise their workers life-time employment, being out of work is a hardly bearable prospect for many.

Jobs - until March 2000?

The extra budget will pump money into emergency employment schemes, such as providing financial incentives to companies and non-profit organisations that hire displaced workers.

Central and local governments will be asked to hire about 300,000 more workers on a temporary basis.

Another large chunk of the money will help regional governments deal with costs related to the aging of society.

Continuing Japan's tradition to promote growth industries, some of the money will susidise the creation of new businesses in promising sectors like telecommunications.

Japanese politicians, though, are worried that the jobs package, and similar economic booster programmes, may not be enough to lead the country of of its longest post-war recession.

Many of the public spending programmes will run out during the first three months of 2000. If the economy has not recovered by then, the current signs of recovery could quickly evaporate.

The Ministry of Finance said it would not have to issue extra bonds to finance the programme, which therefore will not add to Japan's already hefty public sector debt.

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