LIMA, Peru (Reuters) -- The jobless rate in Latin American and the
                  Caribbean will likely end 1999 at its highest level in a decade, with 18 million
                  people unemployed despite years of free market reforms, a United Nations
                  agency said Wednesday.

                  But things should improve next year as better-managed economies, with
                  inflation largely under control, recover from the global financial turmoil that
                  has shaken the region, the International Labor Organization (ILO) said.

                  The region's average unemployment rate is estimated at 8.8 percent in 1999,
                  up from 8.2 percent last year and the highest level since 1983 when the
                  region was engulfed in a foreign debt crisis, according to the ILO report
                  published in Lima.

                  In the 1990s, many governments pushed free market policies, opening the
                  economy to foreign investors while trimming back inflation. The reforms
                  were seen as an antidote to the 1980s "lost decade," when nations struggled
                  under heavy state management and crushing foreign debt.

                  The reforms, though, have failed to help millions in some of the region's
                  poorest sectors, the ILO said.

                  "(Free market) reforms hit the weakest side -- employment," Victor
                  Tokmam, ILO's regional head, told Reuters, adding that jobless rates were
                  double in the most destitute sectors of the region.

                  At the bottom of the list are Colombia, stuck in its worst recession this
                  century and facing record joblessness, and Venezuela, where its oil-based
                  economy is in its deepest recession in over a decade.

                  Argentina, where a decade of Peronist rule under former President Carlos
                  Menem failed to reduce unemployment, the jobless rate this year is among
                  the highest in the region, the ILO reported.

                  Despite recession in many countries, the number of those employed actually
                  rose as people found work in the informal sector. Millions in Latin America
                  scrape together a living doing anything from street hawking to driving a taxi.

                  Six of every 10 jobs created in 1999 were in the informal sector, the report
                  said. In the formal industrial sector, real salaries are estimated to fall 1.2
                  percent this year.

                  ECONOMIES SHOW RECOVERY SIGNS

                  Mexico, where the export-driven economy is growing faster than expected,
                  was one of the few countries to buck the regional trend as unemployment
                  fell.

                  Brazil's jobless rate will rise only slightly by 0.1 percentage point, to 7.7
                  percent of the formal labor force, with signs of economic recovery in the
                  regional powerhouse, the report said.

                  Economic growth in the region will contract by 0.6 percent this year after
                  growth of 2.3 percent in 1998, the report added.

                  But the region's economies will largely recover next year, with output
                  expanding by 3.7 percent and unemployment falling to an average 8.3
                  percent as free market reforms mean countries are better able to rebound
                  quickly from international turmoil.

                  "The balance is less negative than first forecast. Economies found themselves
                  healthier and in better conditions to absorb (regional financial turmoil)," the
                  report said.

                     Copyright 1999 Reuters.