Since the 1980s, the economy of Bhutan has grown steadily at more than 5% per annum, which has created jobs. Policy makers kept the high growth rate going by admitting expatriate labor from neighboring countries. At appraisal, it was estimated that 50,000 expatriate workers were employed in Bhutan. Meanwhile, new Bhutanese entrants to the labor market were unable to take advantage of this employment growth, as they did not possess the skills in demanded, causing high unemployment among youths in Bhutan. The inability to meet domestic demand for labor with Bhutanese possessing appropriate skills was identified as a binding constraint on growth. The Government of Bhutan consequently wanted to restrict the inflow of expatriate workers and channel young Bhutanese into private sector employment. The Basic Skills Development Project (BSDP) addressed some of these issues with technical and vocational education and training (TVET).
The BSDP was to provide improved and relevant training in employable skills to new graduates, the unemployed, youths, women, and people living in rural areas; it was expected to reduce urban unemployment of people in the 15–24 age group to the average national unemployment rate plus 2%. However, the report and recommendation of the President (RRP) did not mention a benchmark unemployment rate.
The BSDP was expected to (i) strengthen institutional capacity to ensure the delivery of basic skills training relevant to market needs and commensurate with the capacity of beneficiaries, (ii) increase access to basic skills training by expanding TVET and rehabilitating and establishing facilities, (iii) improve the quality of basic skills training by strengthening links with the private sector, and (iv) promote the use of basic skills by developing employment guidance and job placement services.
Asian Development Bank.Reference Number: PCV: BHU 2011-45.Project Number: 31317.Loan Number: 1830-BHU(SF).November 2011.
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