Context: In the past decade, Bhutan has made significant progress in poverty reduction and socioeconomic development. Despite this progress, unemployment rates are historically high due to the influx of overseas returnees and local employees being laid off as a result of the economic downturn caused by the COVID-19 pandemic. In 2019, the overall youth unemployment rate increased to the unprecedented level of 22.6 per cent (of which more than half were women). Promoting job creation for young people has become an increasingly important priority for the Royal Government of Bhutan, especially since the pandemic emerged. Thus, as part of a rapid and robust post-pandemic economic recovery plan, the Government is endeavouring to generate employment for young people to help boost domestic exports.
Implementation of programme/ initiative: In 2019, the ‘Youth Employment and Rural Entrepreneurship (YERE)’ project was introduced by the Government of Bhutan’s Ministry of Agriculture and Forests, and the World Bank, with financial support from the Japan Social Development Fund. It is a three-year project, with a total budget of USD 1.25 million. The project aims to promote youth employment in the export industry, reversing COVID-19’s negative impacts, while those aged 18–35 are eligible for participation in project activities. The project provides rural youth with access to financial, business, technical and life-skills training. Computer training is also provided to bridge the digital divide. After the successful completion of the trainings, the top 200 youth enterprise proposals are supported with grants from the project fund of USD 4,600 each, and technical assistance for the establishment of their respective enterprises. In this context, the project is contributing to the national goals of enhancing economic opportunities for unemployed youth, alleviating rural poverty, and reducing the vulnerability of the local population in poor and remote areas of the country.
Main challenges: The current state of development has been exacerbated by the COVID-19 pandemic, meaning that youth without prior capital investment and professional education, especially those in rural areas, are in dire need of support in accessing income-generating opportunities. Furthermore, the slowed commencement of project activities has been compounded by COVID-19-related impositions; travel restrictions, social distancing directives and three nationwide lockdowns have also substantially delayed the implementation of field activities.
Results achieved: Despite postponement of activities, meaningful progress has been made thus far. As of August 2021, some 500 youth have been participating in the capacity-building programme of the project, and receiving training on the basics of entrepreneurship and how to start and operate their own enterprises. In addition, approximately 400 new jobs have been created for out-of-school and unemployed young people in six dzongkhags (districts) in south-western Bhutan. Some participants have reported that such training is rare, and they are hopeful that many youth would be able to benefit from realizing business ambitions. Participants of YERE who have finished their trainings and are interested in setting up their own small businesses are now working to receive further training and the corresponding grants to establish their own flourishing enterprises.
Moving Forward: During its project lifespan (up until December 2022), YERE aims to help at least 1,000 vulnerable young people in rural areas by creating over 200 new enterprises and setting the foundations for more job opportunities. In looking ahead, the project hopes to incentivize young people to be better engaged in the local community and build capacity within youth-led entrepreneurship in rural Bhutan, as part of a process that facilitates the transition from subsistence farming to commercial, market-based farming.
Replicability: YERE is an exemplary model of how innovation in youth employment approaches can offer huge potential as a driver for both economic diversity and employment creation in the agriculture sector. In 2021, this sector employed approximately 58 per cent of the total working-age population and contributed around 16.7 per cent of Bhutan’s Gross Domestic Product. This type of project – with an emphasis on training in skills and capacities that are in demand, and the provision of technical assistance – could be implemented in many other countries of the South and South-West Asian subregion and beyond, contributing to curbing youth unemployment in rural areas, promoting entrepreneurialism and helping provide enhanced livelihoods for the families of vulnerable young people.
Acknowledgement:
This good practice was kindly prepared by Ms. Alysha Brahmantiara Putri.
References:
http://www.moaf.gov.bt/apa/about-yere/
Project Details
Date: October 14, 2021