Bhutan's Job Creation Plan

How do you go about persuading young people to take up jobs in the private sector when they all aspire to civil service positions? And how do you go about raising skill levels to fill private sector jobs?

This is the not uncommon dilemma the government of Bhutan has been struggling with for the past few years. Young people want only civil service jobs because of the better working conditions, higher starting salaries and perceived prestige of working in the civil service. Yet the civil service has been increasingly unable to absorb all of those who want a job.

Employers, for their part, prefer to hire foreign workers with more relevant skills. The number of unemployed youth in the cities was getting to the point where Bhutan's most important policy objective of Gross National Happiness was being endangered.

In cooperation with the Asian Development Bank, the government resolved to act, adopting the Labor and Employment Act of Bhutan in January of last year.

The new law is all about correcting the mismatch between employers and job seekers and creating incentives for young Bhutanese to acquire technical skills and join the private sector.

It introduces many of the provisions of the core labor standards previously absent from Bhutanese law, such as prohibition on discrimination and the worst forms of child labor. More relevant to most workers, it establishes a minimum wage, a national occupational health and safety policy and freedom of association.

These constitute an enormous improvement for workers. The government was also mindful of the fact that when your population is growing fast, it is important to adopt policies that encourage job creation. Indeed, research shows that rigid labor laws hit young people and women the hardest by stifling employment growth while protecting mainly the 'insiders', i.e. those - disproportionately men - who already have jobs.

While admittedly starting from a low base, Bhutan succeeded in introducing substantially greater worker protections along with incentives for job creation. This is surely the only way in which Gross National Happiness can be maintained on a steadily upward trend for the long term.