Supporting Youth-led Entrepreneurship in Rural Bhutan

“Coming from a family of ten, I had to give up my education due to financial constraints at home. I am now a simple housewife with five children. And my husband is the only source of income,” says a 27-year-old Ugyen Tshomo, resident of Bjagchhog gewog, a small village in the south-west of Bhutan. “Never in my wildest dreams, could I have imagined that I would be blessed with an opportunity to become an entrepreneur and to be financially independent, especially at this age,” she added.

A new project aims to generate productive employment for the poor and vulnerable youth in Bhutan. Photo credit: Sonam Wangmo

Ugyen is part of a cohort of 500 youth currently participating in  a capacity building program under the Youth Employment and Rural Entrepreneurship (YERE) project administered by the World Bank ands implemented by the Ministry of Agriculture and Forests (MOAF), with financial support from the Japan Social Development Fund (JSDF). The project aims to generate new and more productive employment for the poor and vulnerable youth in Bhutan. Considering the country’s cultural traditions and current state of development exacerbated by the Covid-19 Pandemic, youth, especially in rural areas, need support in accessing income-generating opportunities that do not require capital investment and professional education.

Bhutan has made significant progress in poverty reduction and economic growth in the past decade. Poverty has fallen from 36 percent to 12 percent and real GDP has grown at an average annual rate of 7.5 percent since the 1980s. This has largely been driven by rapid development of rural infrastructure, and recent hydropower projects. Despite this growth, the unemployment rate is at a historically high level of 5%, up from 2.7% in 2019. This is mainly driven by overseas returnees and local employees who were laid off due to the economic downturn resulting from the Covid-19 pandemic. The overall youth unemployment rate also increased to 22.6 percent—of which women accounted for more than half of this figure (11.9 percent) in 2019 which is also the highest on available data to date.

Promoting Job creation for young people and investing  in human capital has always been a top priority for the Royal Government of Bhutan (RGOB) and has become even more critical since the Covid-19 pandemic started. In July 2020, close to 30,000 Bhutanese were seeking jobs[2], including more than 13,000 who lost jobs domestically, and over 3,000 Bhutanese returnees who lost their jobs abroad. The Government of Bhutan reiterated its focus on generating employment for young people and its need to boost domestic exports for a fast and robust economic recovery.

The project aims to help Bhutan respond to the impacts of COVID-19 on the job market, particularly by addressing youth unemployment  through  export promotion. 

The project will provide rural youth with access to finance, as well as business, technical and life skills training. The topics covered under the training are Change Management, Business Spotting, Business Plan Development, Communication Skills, Personal Branding, Digital Marketing, Conflict Management, Negotiation, Self-Leadership, Financial Plan and Business proposal design and implementation. Further, building on participants background, basic computer training was also provided to help bridge the digital divide.

“This program is a huge blessing particularly for those of us residing in the villages and being left behind,” says 32-year-old Sonam Tobgay who now intends to open a homestay eco-tourism program. “I always related agriculture activity to farming and producing  vegetables. This program has helped me understand that I can do more beyond these.” He proudly shares his model of his dream homestay project which he plans to cater to domestic local tourists for now, and to international guests once tourism reopens  in the country again.

A total of 500 out of school youth will be trained on the basics of entrepreneurship, how to start and operate a business enterprise. Young men and women from this cohort who are from selected project areas--including Haa, Chukha, Trongsa, Wangduephodrang, Dagana and Samtse-- and interested in developing their own small-scale enterprise will be eligible for further training and a matching grant to start  their business. 

“Soon, I will be a boss too!” exclaimed 33-year-old Kinga Wangmo who is currently working as a salesgirl for a small grocery shop in her locality. At present, young people in these remote districts have very little incentive to engage in their local community which is why a lot of rural youth have migrated to urban areas within and outside the country in search of employment opportunities. The exodus of these youth leads to a scarcity of labor in agriculture, a weakening of the traditional social fabric in rural areas, and the erosion of cultural and traditional values among the unemployed youth wandering around urban centers. The project will therefore, contribute to the overall national goal of enhancing economic opportunities for unemployed youth, alleviating rural poverty and rural-urban migration, and reducing the vulnerability of local populations in the remote areas of the country – which are also the most vulnerable to climate variability.

The project builds on past and ongoing World Bank projects that support the agriculture sector and rural development in Bhutan. It represents an opportunity to reduce pockets of extreme poverty in Bhutan and build the capacity of Youth-led Entrepreneurship in Rural Bhutan to move from subsistence farming to commercial market-driven agriculture.