The Problem of Unemployment
Unemployment is a problem widespread all over the world. It is an unpredictable plight. Trying to gauge the solutions through creating jobs is unfathomable. Many tried but failed.
Unemployment is a problem widespread all over the world. It is an unpredictable plight. Trying to gauge the solutions through creating jobs is unfathomable. Many tried but failed. During President Clinton's tenure, he was applauded for creating countless jobs, but he was viciously criticized when many Americans lost their jobs when the Stock Market collapsed. Thus, unemployment is a problem that can be solved temporarily, but when economy fluctuates, it becomes a colossal predicament.
Similarly, Bhutan is no exception. The government claims that economic growth has increased by 8 % and the unemployment rate has been reduced to 2.1%, beyond its target to reduce the rate to 2.5% by 2013 (State of Nation Report, 2013). The Labor Force Survey Report 2012 shows the total labor force of the country at 336,391. The Labor Ministry reports that 329,487 are employed; it means that only 6,904 people are in the unemployed category and hence the low unemployment rate of 2.1% is calculated.
However, the youth unemployment rate juxtaposes the survey report as it is still soaring at 7.3 %. With rapid increase in number of job seekers every year, a total of around 140,000 jobs will be required in the 11th Five Year Plan and approximately, 21,000 job seekers will enter the labor market on an annual basis. This is mentioned in the Annual report (Fiscal Year 2011-12) of the MoLHR.
According to the Annual report, the projected number of job seekers for 2018 is 27,505, while the number for 2012 is 18,682. Job seeking Students who are Classes X and XII pass outs would add more to the unemployment ratio. The projected number for the above category is 13,083. The number of students studying in Classes X and XII falls around 21,308 in 2012., and 1,969 are the degree holders for 2012, which would escalate to 3,421 in the year 2018.
Tentative Causes
* Cheap Indian Laborers; The Private sector is not able to absorb all the unemployed youth. The costs of Indian laborer are cheaper than Bhutanese laborer. Moreover, Indian laborers are willing to do manual job with low wages, whereas Bhutanese laborers are not specialized in construction related works. Indian laborers dominate Bhutanese labor market, and it inevitably contributes to unemployment.
* A preference for civil service: Attitude of educated youth is also important factor causing unemployment; every year, thousands of university graduates enter job market. Owing to reasons like sustainability, job security, training opportunity etc, young high school, and college graduates prefer civil service than private jobs. However, the goal of our government is to maintain a small and efficient civil service. As a result, there is a less possibility of expansion, and only few hundred are selected for government job. Youth are encouraged to seek employment in private sector and corporate sector while private sector is struggling to expand and develop due to government policies.
* White-collar jobs: Blue-collar jobs reflect a class hierarchy in the view of job seekers and they tend to desire white-collar jobs. Graduates feel that they deserve better opportunities since they acquire some educational qualifications. Because of reluctance to take up manual work has forced the country to seek workers from abroad. This leads to huge remittance of foreign currency and subsequently contributed to economic crisis. The evidences are clear from above mentioned points to say that unemployment in Bhutan is the issue confronting mostly the educated youth.
* Mismatch of skills and jobs: The rising unemployment among the youth is due to the mismatch of skills the job seeker posses and the demand in the job market. Due to development programmes, major demands in job market are that of technical graduates. Hydro-power projects have created ample jobs for engineers and technical related course. However, work experience required hinders fresh graduates to get appropriate jobs. Moreover, general graduates are in the highest category of graduates in the country, and only less proportion of them are recruited in government and private sector. Thus, it further leads to rise in youth unemployment. Despite the fact that unemployment rates are rising, Bhutan still faces a crunch in the skill-based professions such as teachers, engineers, physicians and nurses, etc. While we still lack skilled laborer on one hand, the booming construction industry has given rise to the need of skilled laborer on the other hand. Thus, not only the mismatch of skills existed in labor market but there is also a mismatch between demand and supply in the job market. We have job seekers who are not able to find employment and at the same time, we do have employers who are not able to hire enough skilled and knowledgeable employees.
* Migration: In addition, Youth Unemployment rate is found higher in urban areas as youth are migrating from villages to urban places in search of jobs as they are attracted by urban facilities. As a result, towns like Thimphu and Phuentsholing are flooded with youth. These youth fail to find suitable job and adds to unemployment rate, and at the same time, their villages are left with elderly people, which has led to uneven distribution of labor.
Recommendation
* Provide skill based training: The challenge Bhutan faces today are providing its youth a gainful employment. To solve this problem the government should provide skill based training and orientations to young school dropouts and graduates so that they can gain appropriate skills required for jobs.
* Encourage youth to join blue-collar jobs: Youth are not willing to take up blue collar jobs. With educational qualification they look down on blue-collar jobs. While most of the Bhutanese studying abroad do manual part time jobs, it shows that youth would take blue collar-jobs if provided with better services and better wages. In this case, the government should support private sector with subsidies and tax reduction, so that they can increase growth and hire indigenous laborers with better remuneration.
* Private sector development: Government should support private sector as it is the largest employer in the country. Government should come up with certain economic policies such as minimal restriction on business companies so that it would enhance private sector. Private sector employing Bhutanese laborers should be benefited with tax subsidy, so that they could employ more Bhutanese youth.
* Promote entrepreneurship: To create employment and economic growth, the government should support young entrepreneurs with appropriate training. They should have easy access to credit and licence. Customs tax and sales tax should be relaxed so that that they can grow faster. This would not only add to total economic growth, but also reduce the rate of unemployment.
* Reform academic system: Changing academic system would be difficult, but this would be the only sustainable solution to ever growing unemployment problem. To meet the needs of altering economy, conventional Bhutanese academic system must be reformed. The curriculum should integrate proactive and practically applied lessons, which are responsive and in sync with the growing demand of Bhutanese job market.
* Rural Development: The government should focus more on developing rural places rather than disbursing maximum funds in central. Development should be incorporated with trickledown policies, so that economic growth would benefit the poor community. Rural districts and Gewogs should have better public services like credit, banking, ICT, hospitals, entertainment center etc, so that youth would find jobs there, and stop migrating to towns.
In words of his majesty the fourth king: “The future of a nation lies in the hands of younger generation.” On other hand, Unemployment in Bhutan has crippled our potential youth to stay idle rather than become capstone of development. Therefore, there is a responsive and collective need to address such issues and frame policies to ease such problems.