More

    Bhutan’s Hydropower-led Growth Model Not Labour-intensive: World Bank

    CountriesBhutanBhutan's Hydropower-led Growth Model Not Labour-intensive: World Bank
    - Advertisment -

    Bhutan’s Hydropower-led Growth Model Not Labour-intensive: World Bank

    The authors of the report say that over 40 per cent of workers in Bhutan remain engaged in low-productivity agricultural employment. This finding is reflected in the low-skill nature of the labour market, where 37 per cent of employed workers have no formal schooling.

    Bhutan’s pressing structural challenges related to a lack of economic diversification away from the hydropower-led growth model, vulnerabilities to shocks, and weak productivity gains could complicate the government’s efforts to create more jobs, says a recently released World Bank assessment report on the country’s labour market.

    The World Bank’s ‘Bhutan Labour Market Assessment Report’ says the country’s human capital remains low.

    “A child in Bhutan will be only 48 percent as productive in adulthood as he or she could have been with a complete education and better health care.” The record number of Bhutanese migrating abroad with the reopening of the country’s borders in mid-2022 is fuelling further concerns by policy makers about the country’s development prospects, the report says, adding that “Workers in Bhutan face many challenges, including limited inclusion of women in meaningful employment and persistence of low-productivity agricultural employment.”

    It says that “Employment quality outside of the public sector remains weak, leading to public sector queuing, rising unemployment among urban workers, and a record number of Bhutanese migrating abroad.”

    - Advertisement -

    The authors of the report say that over 40 per cent of workers in Bhutan remain engaged in low-productivity agricultural employment. This finding is reflected in the low-skill nature of the labour market, where 37 per cent of employed workers have no formal schooling.

    “This outcome is a consequence of the hydropower-led growth model, which is not labour-intensive. It thus does not tempt workers to leave agriculture, nor does it directly affect agricultural productivity.”

    Diplomatic, yet scathing

    The report is scathing on the government’s employment generation efforts and says that the private sector that could be a big employer has not been promoted owing to the government’s policies. The underdeveloped private sector is dominated by low-productivity microenterprises — one of the main reasons for the high unemployment rate among skilled professionals.

    “The private sector in Bhutan faces the twin challenges of accelerating job creation in productive sectors that can absorb the increasingly educated workforce, while also improving the allocation of labour to fill existing vacancies in low and semi-skilled positions.”

    It also contributes to the low quality of employment outside the public sector and may explain in part the speed and scale of outmigration in recent months. “Over 95 per cent of registered firms in the private sector have five employees or fewer, and they do not grow over time. Close to 75 per cent of firms with fewer than five employees have been operating for one to nine years,” the report says.

    Sans it diplomatic speak, the World Bank’s report released last week is not charitable to the government policies on employment programmes. It says that although Bhutan has improved its employment programmes and policies over the last few years, significant gaps remain.

    “Bhutan’s employment support programs and delivery systems face gaps in addressing some of the challenges related to the activation of women, limited job-relevant skills, and the difficulties firms face in accessing trained labour.”

    “Most active labour market programmes remain small and do not specifically focus on the activation of women by alleviating some of the childcare or mobility constraints they face,” it says.

    Although the technical and vocational education and training (TVET) system is relatively well established, it remains too small to meet the existing labour demand. “For example, there were only 401 TVET graduates in 2022. Tracer surveys reveal that over 45 percent of graduates remain unemployed one year after completing training and that employers have no links to most TVET institutes.”

    Addressing Bhutan’s labour market challenges requires pursuing vertical growth policies that are sector-specific to support private sector development and job creation, it says. “In parallel, horizontal reforms that improve the business environment, strengthen human capital accumulation, and increase the effectiveness of employment support programs are needed.”

    - Advertisement -

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here

    Latest news

    UN Agencies Sound Alarm as Record-Breaking El Niño Threatens Global Humanitarian Crisis

    The UN appeal comes at a moment when humanitarian funding is already stretched by multiple crises. While CERF has provided rapid support, broader donor commitments remain insufficient relative to the scale of projected need.

    Sri Lanka Lays Foundation for Critical Groundwater Hub in Jaffna to Combat Salinity Crisis

    A Rs 189 million facility aims to monitor and protect the fragile aquifers that sustain nearly 600,000 people on...

    Silent Epidemic: Lead Exposure Steals Futures Across South Asia

    South Asia’s lead crisis is not inevitable. Experience elsewhere demonstrates that decisive regulation, industrial formalisation and community-level interventions can sharply reduce exposure.

    UN Report Warns World on Track for 2.8°C Warming This Century as 1.5°C Limit Slips Beyond Reach

    Experts at UNEP say that the Emissions Gap Report 2026 does not abandon the 1.5°C goal. Instead it reframes the challenge: minimise the height and length of the overshoot and chart a credible return path.
    - Advertisement -

    Pakistan and Maldives Sign 20 MoUs, Target $200 Million Trade in Landmark Visit

    The visit underscores enduring people-to-people and institutional bonds while setting measurable economic targets.

    India: Coal Controller Wins SKOCH Gold for Digital Tool Transforming Closed Mines into Sustainable Assets

    As India targets scientific closure of around 147 mines in the near term while maintaining energy security, tools such as SUVIKALP will determine whether mined-out landscapes become liabilities or assets.

    Must read

    UN Agencies Sound Alarm as Record-Breaking El Niño Threatens Global Humanitarian Crisis

    The UN appeal comes at a moment when humanitarian funding is already stretched by multiple crises. While CERF has provided rapid support, broader donor commitments remain insufficient relative to the scale of projected need.
    - Advertisement -

    More from the sectionRELATED
    Recommended to you