THIMPHU, BHUTAN, November 16, 2016 –Addressing labor market challenges and unlocking private sector growth need to go hand in hand in the years ahead, according to a new report jointly issued by the Ministry of Labour and Human Resources, of the Royal Government of Bhutan (RGOB) and the World Bank released today.
The report Bhutan’s Labor Market: Towards Gainful and Quality Employment for All provides robust evidence to inform the RGOB’s policy making regarding critical labor market challenges, their underlying causes, and highlights policy options for resolving them.
“Bhutan’s private sector already faces difficulties in being competitive. In the coming years, these difficulties might become even more severe, if labor market challenges are not managed and addressed consciously,” said Yoichiro Ishihara, World Bank Resident Representative in Bhutan.
Challenges to the existing labor market, that may be less known include declining rates of labor force participation, pockets of unemployment, underemployment and high informality.
The key difficulties for ensuring gainful and quality employment for all, highlighted by the report, are a preference for public sector jobs, particularly by people more highly educated. The private sector has not been as attractive as the public sector as employers and with growth also inhibited by insufficient technical, computer and soft skills in employees as well as an imbalance of social protection program support between the public, private nonfarm, and private agricultural sectors.
“Taken holistically, the report’s recommendations identify a way for Bhutan to take a development path that redefines the balance between the public and private sectors by establishing a smart partnership between the two,” said Jasmine Rajbhandary, World Bank Senior Social Protection Specialist and one of the lead authors of the report.
The key recommendations are to take a balanced development path which combines a rethink the role of the public and the private sectors; streamlining labor policies and their implementation, incorporating a more comprehensive social protection system and fostering broad-based private sector development and productivity.
“As a Ministry mandated to address the challenges of unemployment in Bhutan, I am confident that this report will influence the policy direction of the Royal Government of Bhutan, including the 12th five year plan, and expect it will also encourage development partners and the private sector to think along new lines, said Secretary of Labour and Human Resources, Dasho Sonam Wangchuk.