National Council of Bhutan

REPORT ON THE REVIEW OF NATIONAL EMPLOYMENT POLICY, PROGRAM AND STRATEGIES

Social and Cultural Affairs Committee

03-Dec-15

Committee Members

Hon. Nima (Chairman)Hon. Dhan Bdr. Monger (Dy. Chairman)Hon. Tashi Dorji (Member)Hon. Jigme Wangchuk (Member)Hon. Tashi Phuntsho (Member)Ms. Dechen (Committee Secretary)Ms. Changa Lhamo (Research Officer)

Table of ContentBackground....................................................................................................................................................4

1. COMMITTEE’S GENERAL OBSERVATION ON EMPLOYMENT CREATION.....................................................61.1 Agriculture...............................................................................................................................................81.2 Tourism....................................................................................................................................................91.3 Construction.............................................................................................................................................91.4 Hydropower...........................................................................................................................................101.5 Civil Service & Elected Posts.................................................................................................................111.6 Teaching Professionals & Overseas Employment..................................................................................111.7 Corporations..........................................................................................................................................121.8 Cottage and Small Industries.................................................................................................................121.9 Information Technology.........................................................................................................................131.10 Manufacturing Industries.....................................................................................................................131.11 Foreign Direct Investments..................................................................................................................13

2. OBSERVATIONS AND FINDINGS ON EMPLOYMENT PROMOTIONS.............................................................142.1 Programmes...........................................................................................................................................152.1.1 Benefits of the YEPP...........................................................................................................................152.1.2 Overall Quality of the YEPP...............................................................................................................162.2 Systems...................................................................................................................................................162.2.1 Government Intervention and Monitoring...........................................................................................162.2.2 Implementation Policies......................................................................................................................162.2.3 Career Counseling..............................................................................................................................172.2.4 Job-Skill Mismatch..............................................................................................................................172.2.5 Source of Job Information...................................................................................................................182.3 Internal Service Conditions....................................................................................................................182.3.1 Work Conditions and Expectations.....................................................................................................182.3.2 Job Satisfaction...................................................................................................................................182.3.3 Job Security.........................................................................................................................................192.3.4 Salary..................................................................................................................................................192.4 Personal Attributes................................................................................................................................192.4.1 Employment Preference......................................................................................................................192.4.2 Work Skill and Attitude.......................................................................................................................19

3. RECOMMENDATIONS ON EMPLOYMENT CREATION...........................................................................................204.RECOMMENDATIONS ON EMPLOYMENT PROMOTIONS.......................................................................................21REFERENCES.....................................................................................................................................................22

ABBREVIATION

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ATP Apprenticeship Training Programme

BCCI Bhutan Chamber of Commerce and Industry

BICTTA Bhutan ICT and Training Association

CCs Community Centers

CDCL Construction Development Corporation Limited

CSI Cottage and Small Industries

DES Direct Employment Scheme

DGPC Druk Green Power Corporation

FDI Foreign Direct Investment

FYP Five Year Plan

GDP Gross Domestic Product

GEP Guaranteed Employment Programme

GRF Government Reserve Forest

GSP Graduate Skills Programme

eGIF e-Government Interoperability Framework

iGNHaS Institute for GNH Studies

ICTs Information and Communication Technologies

LFS Labor Force Survey

MICE Meetings, Incentives, Conventions and Exhibition events

MoAF Ministry of Agriculture and Forests

MoE Ministry of Education

MoEA Ministry of Economic Affairs

MoLHR Ministry of Labour and Human Resources

MHPA Mangdechu Hydroelectric Project Authority

NTTA National Technical Training Authority

PHPA Punatsangchu Hydroelectric Project Authority

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RCSC Royal Civil Service Commission

RUB Royal University of Bhutan

SCAC Socail and Cultural Affairs Committee

SEED Skills for Employment and Entrepreneur Development

TTI Technical Training Institute

VET Vocational Education and Training

YEPP Youth Employment Promotion Programmes

YES Youth Employment Skills

Background

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The gravity of unemployment and its consequences can be understood through His Majesty the King’s command during the 106th National Day in 2013. His Majesty commanded that “Unemployment is a growing concern for everybody. Parents wish to see their children educated and then gainfully employed. Youth aspire to complete their education and find jobs, to have the satisfaction of finding a source of livelihood. Expectations and hopes of our youth should be fulfilled by creating meaningful jobs.”

Our country has witnessed unprecedented socio-economic development mainly due to the visionary leadership of Their Majesties and as a result of the introduction of Five Year Plans (FYP) in 1961. Inevitably, the growth in the economy brought about a great deal of development in education, health and various other sectors. This led to a rapid development and shift from primary to secondary and gradually to tertiary sectors. It has also encouraged many parents to send their children to schools and therefore, the number of enrollment in schools has kept on increasing. Thus there was initially not much problem of providing jobs; rather it was a problem of choice.

Generally unemployment is a global phenomenon. Youth unemployment in any country is an indication of far more complex problems. In Bhutan, the unemployment situation emerged for the first time in the late 1990s with the official unemployment rate recorded at 1.4 percent. Since then, it continued to follow an upward trend with the highest rate recorded at four percent in 2009. Post 2009, there has been a fluctuating trend with a sharp drop to 2.1 percent in 2012, which again rose to 2.9 percent in 2013. One phenomenal feature of the unemployment statistics recorded so far has been the unemployment among youths constituting the major proportion of the total unemployment.

Several concerns were also raised in the erstwhile National Assembly and in the current Parliament. During the 78th session of the National Assembly, the National Employment Board was established to provide advice on job opportunities, coordinate and facilitate employment and recruitment, undertake employment research, regulate policies related to employment conditions, and make policy recommendations to generate employment for the rapidly growing labor force. The issues were also deliberated in the 79th, 83rd, and 84th sessions of the National Assembly, which eventually led to the enactment of the Labour and Employment Act 2007 during the 86 th session of the National Assembly. Similarly, the National Council in its 2nd session deliberated on the issues related to unemployment followed by asking several questions to the Royal Government both in oral and written forms.

Although Bhutan’s unemployment rate is within the internationally accepted rate of five percent, it is the desire of the Royal Government to ensure that every Bhutanese citizen is gainfully employed and able to lead a dignified life. A person without gainful employment will not only be deprived of a dignified living but will also be incapacitated from achieving his/her full and innate potential as a human being. Besides, considering Bhutan’s demographic and economic sizes, it is all the more strategic to ensure that the limited resources that we have are utilized most optimally. While unemployment problem has high potency for disrupting peace and harmony in the society, the higher risk of our youths staying out of active labor force for a longer period of time may breed a pool of unproductive citizens. Such a situation will be detrimental to the developmental progress of the country.

The National Council has identified unemployment as one of the key national issues, which needs to be addressed. Article 11.2 of the Constitution stipulates that “The National Council shall act as the

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House of review on matters affecting the security and sovereignty of the country and the interests of the nation and people that need to be brought to the notice of the Druk Gyalpo, the Prime Minister and the National Assembly”. Furthermore, Section 7 of the National Council Act of Bhutan states, “The National Council shall ensure that the Government safeguards the interests of the nation and fulfills the aspiration of the people through public review of policies and issues, Bills and other legislation, and security of State functions”. Recognizing the ill effects of the unemployment problem, the House expressed the need to review the employment policy, programmes and strategies. Subsequently, the Social and Cultural Affairs Committee was assigned the responsibility of conducting a comprehensive review.

The Social and Cultural Affairs Committee took the task on board since its 12 th committee meeting held on 23rd January 2015. Given the subject’s vast scope of research, large number of stakeholders to be consulted and time constraint, the Committee could submit only an interim report for deliberation during the 15th Session of National Council. After the 15th session, the Committee, with several directives from the House, decided to continue the study from two perspectives namely “Employment Creation” and “Employment Promotion”. It was also evident that the Committee would not be in a position to complete the task on time and produce a quality report if it was to carry out the study on both the perspectives. Hence, the Committee outsourced Employment Promotion part to iGNHaS under the Royal University of Bhutan.

1. Committee’s General Observation on Employment Creation

The National Employment policy was approved 2013. It is articulated comprehensively through five dimensions namely, employment creation, employability of labour force, aligning employment market, working conditions and equal employment opportunities. The Committee tried to study various aspects of these dimensions by taking into consideration some of the strategic and practical issues.

While the Committee attempted to look at the employment issues at large, the focus has been on employment creation opportunities. Hence, the Committee explored possible employment opportunities that could be created in various sectors. For this purpose, the Committee conducted several consultations with relevant stakeholders besides visiting some of the institutions, conducting video conference with experts, and attending seminars and workshops as given in the table below:

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Sl. No Date Meeting Remarks

1 23/01/2015 12th SCAC meeting Compilation of necessary documents for the review report

2 16/02/2015 13th SCAC meeting Tentative planning to seek presentation from various stakeholders

3 27/02/2015 14th SCAC meeting Study on current status of unemployment

4 19/03/2015 15th SCAC meeting Developing of concept paper

5 27/03/2015 Presentation by MoLHR

Presentation on the current employment situation, programmes implemented to accelerate employment growth, plans and challenges vis-à-vis the employment policy

6 01/04/2015 Presentation at Gedu Attended presentation on unemployment challenges organized by RIGSS

7 06/04/2015 16th SCAC meeting Work progress to report to the Plenary

8 14/04/2015 Presentation by MoEA Gather information on the creation of employment opportunities in line with the economic development policy. Implementation of various programs to develop cottage and small and medium scale businesses.

9 16/04/2015 Presentation by MoE Information focusing on teacher Human Resource Policy, teacher recruitment and deployment, current situation of the teachers on contract and community based teachers and teacher distribution across various levels of schools and subject-wise requirement projections

10 22/04/2015 Presentation by MoAF Mandates, objectives and employment scenarios under various sectors and also the roles that MoAF undertakes in generating employment

11 23/04/2015 17th SCAC meeting Draft report to submit to the Plenary

12 04/05/2015 Field visit Bajo HSS and Khuruthang TTI

13 05/05/2015 Field visit PCE, Paro

14 16/07/2015 World Bank Expertise Video Conference

15 27/07/2015 With MoLHR NC Conference Hall

16 03/08/2015 RUB Research team NC Conference Hall

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17 02/09/2015 RCSC Presentation NC Conference Hall

18 02/09/2015 RUB Presentation (OVC)

NC Conference Hall

19 02/09/2015 BCCI NC Conference Hall

20 21/10/2015 Attended HELVETAS Seminar

Tarayana Conference Hall

21 23/10/2015 Thimphu TechPark, Babesa

Tech Park Conference Hall

22 02/11/2015 CDCL NC Conference Hall

23 16/11/2015 RUB Research team NC conference Hall

Though the Committee’s submission on sector specific issues may look like EDP (Economic Development Policy), it was done in order to underline the potential of employment creation in each sector. However the Committee’s recommendations go beyond being sector specific. It submits to the House the following observations and possible recommendations for deliberations and considerations.

1.1 AgricultureAccording to the Labour Force Survey 2014, 56% of the total population depends on agriculture for their livelihood. It contributes approximately 14% to the overall GDP. However, a mere 4.3% of the agricultural products are exported. Although agriculture is considered a rural phenomenon, it is seen as a potential employment generating sector. The scope of scaling up farming for commercial purposes is highly advocated in the light of promoting food security and self sufficiency.

Currently, there are 259 farmers group and 39 cooperatives which are formally registered with the Department of Agriculture Marketing and Cooperatives. However, due to lack of adequate support in monitoring and marketing from the concerned agency, it has been observed that most of the registered cooperatives are failing in achieving their target especially at production and marketing. Consequently, the youths are not encouraged to take up agriculture as means for their employment.

While the Committee observed that farming cooperatives have immense potential to create employment opportunities, the efficiency and sustainability of such groups depend on factors such as providing financial incentives and tax holidays for purchase of agricultural plants, equipment, machineries and tax exemptions on export of products.

Similarly, it has been found that establishing such cooperatives would require a considerable size of landholding. Other than leasing state lands, people do not own such sizeable land. However, the stringent and lengthy procedure for leasing GRF land has restricted cooperatives and individuals from taking up large scale commercial agricultural farming.

Further, access to credit facilities has complex procedures with negligible amount projected for agriculture loans. According to the annual report of the Royal Monetary Authority Report 2014, only

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2% of commercial banks’ loan portfolio was projected for agriculture. In a similar manner, the Bhutan Development Bank Limited loans for agriculture constitutes only 16% of the total loan portfolio out of which 85% are less than Nu. 100,000. The total budget outlay for agriculture is also seen decreasing with only 6.4% in the 11th Five Year Plan.

Making the situation worse is the rural land mortgage system. In order to avail loan from a financial institution, a rural individual has to have his/her land mortgaged. However, the value of the rural land is so low that the credit obtained by mortgaging is not worth applying for. Such hindrances have also discouraged people from forming agriculture groups and taking farming for better livelihood. However, agriculture sector has a high potential of creating employment opportunities if all those drawbacks are monitored and better programmes put in place.

1.2 Tourism Tourism sector is another potential employment generating sector as can be seen through the records of the number of employees serving in various areas such as guides, hotels, travel agencies and transportation. As the number of tourists visiting the country in on the rise, there is a strong possibility of creating more employment opportunities.

For instance, in 2014 alone a record of 133,480 tourists both from the region and international visited the country. The number of regional tourists grew by 3.11% from the previous year, growing from 63,426 in 2013 to 65,399. The gross earnings from the international tourism increased to USD$73.2 million (around Nu. 4.392 billion) from USD$63.49 million in 2013, an increase of 15.3%.

A total of 22,424 people were employed in the tourism sector predominantly in hotels (3151), guiding (2117), tour operations (3319) and handicrafts. While the sector has huge scope of expansion, there are certain areas which require attention of the concerned agencies.

For example, for such an important sector, it is unimaginable to not have a prudent tourism policy that provides clear guidance and direction towards development of the sector. Inconsistency in the domestic flights has also affected regional distribution of tourists thus resulting in minimal employment opportunities in those regions. Meetings, Incentives, Conventions and Exhibition (MICE) events are not initiated on a consistent basis, which eventually affects the hospitality businesses and employment opportunities. The Government has also not initiated a structured program to facilitate youths take up advanced language courses both within and outside the country.

1.3 Construction According to the 11th Five Year Plan document, currently there are about 3,892 registered contractors, of which 120 are large (above Nu. 15 million), 380 medium (Nu. 4-15 million) and 3,392 small (under Nu. 4 million). Around 127 Bhutanese contractors, in various categories are engaged in the construction of three ongoing hydropower projects.

The construction sector has generated 1.4% employment and, as of today, there are 7611 employees in private construction sector out of which 472 are non-Bhutanese (452 professionals and 20 non-professionals). With the total budget outlay of Nu.105 billion in 11th FYP for the construction sector, there is potential for the local contractors to boost their businesses, thereby generating employment.

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The Committee, however, observed that there are certain conditions that impede job seekers to consider working in the construction sector. It was reported that low level of mechanization and manual nature of work, lack of social safety nets and improper working conditions discourage job seekers to join the sector. Besides having to work manually under tough conditions, their remunerations are not based on the nature of the jobs.

Construction Development Corporation Limited (CDCL) has been involved in major construction tasks such as bridges and roads of high standards. It is also important to note here that the labor force involved in such projects comprises of only Bhutanese. Apart from construction of roads and bridges, CDCL plans to create different pool of human resources specialized in various sectors like plumbing, masonry, carpentry, etc. It was also pointed that CDCL has invested reasonably for purchase of machineries which can be hired out. CDCL also has been spearheading the promotion of safe working conditions, better remunerations and other necessary facilities for all employees including those involved in blue collar jobs.

Given their experience in construction sector, CDCL is already in the process of signing a MoU with a foreign construction company to work in the hydro power construction sector. A few challenges currently faced in the construction sector by private construction companies can be mitigated through mutually agreed collaboration between the two parties (CDCL and private companies). For instance, private sectors can hire machineries from CDCL and reduce the capital expenditure as most of the machineries remain underutilized once a project is over. This way overspending on the import of the machineries can be avoided.

1.4 Hydropower Hydropower sector is being identified as one of the main driving force of our country’s economy. It generates 27% of revenue to our economy with harness capacity of 1488.16 MW thus far. Besides its contribution in economy, hydro power sector also has significant employment opportunities for Bhutanese youth, both during and after the construction.

Currently over 10,987 Bhutanese employees are employed in the three ongoing hydropower projects of MHPA, PHPA I and PHPA II from a total of 51,665 employees. With more hydropower projects anticipated, we can see greater employment opportunities for Bhutanese youth both for skilled and non-skilled employees.

However, the Committee realized that Sustainable Hydro Power Policy (2008) empowers Ministry of Labor and Human Resources to initiate active role when it comes to recruitment, endorsement and skills development of various employees engaged in Hydropower sectors both during and after the construction phase of the project.

Unfortunately, various reports indicate absence of skills transfer and development in the hydropower sectors. This has been mainly caused by ineffective recruitment and deployment of various Bhutanese professionals at the decision-making level and in critical areas of Hydropower construction. This reflects ineffectiveness of concerned government agencies, which is indicated through the presence of huge non-Bhutanese workforce in the hydro power sector especially during construction phase.

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The Committee reaffirmed that due to lack of constant monitoring and engagement by concerned agencies at the project construction sites, there has been various reports of non employment of Bhutanese due to poor working environment and safety measure at the project construction sites.

The Committee notes with appreciation the achievement of DGPC to employ almost 100% Bhutanese at the Operation and Maintenance (O&M) in most of the hydropower projects that have been completed. However, there is greater role for DGPC when it comes to skills development for Bhutanese youth to enable them to engage from the pre-construction phase of hydropower projects.

1.5 Civil Service & Elected PostsAs of today, the number of civil servants stands at 26,669 which include both regular and non-regular (contract) employees. According to the Royal Civil Service Commission, it is reported that civil service could no longer be seen as potential employment generating sector. This is asserted through the principle of having a ‘small, compact and efficient civil service. Besides, the current scenario shows that about 73% our civil service comprises of employees within the age range of early twenties to late thirties. In addition, the number of civil servants superannuating is highly disproportionate to the recruitment projection, which indicates that the civil service has virtually reached the saturation point.

While it is not appropriate to deem elected posts as employment creating sector, there are possibilities arising from the need to adequately staff these offices through direct recruitment or civil service examinations. The Local Government Act (Amendment) 2014, the National Council (Amendment) Act 2014 and the National Assembly (Amendment) Act 2014 mandate that adequate support staff be recruited and deployed. However, since the Organization Development Exercise is ongoing, the implementation of such provisions is in abeyance for now. There is an opportunity of creating employment albeit in small numbers if due process of laws is followed.

1.6 Teaching Professionals & Overseas EmploymentIn 2015, the graduates of the two Colleges of Education faced the challenge of remaining unemployed. Out of the total number of 417 graduates, only 182 of them were recruited. However, 200 of them were later recruited on contract basis. One of the main issues of concern is the mismatch between teacher recruitment projection of the Ministry of Education (MoE) and Royal Civil Service Commission with that of the teacher output projection of the Royal University of Bhutan.

According to MoE’s teacher recruitment plan a total of 1,673 regular teachers and 436 teachers on contract basis are projected to be required between 2016 and 2020, whereas the Royal University of Bhutan would be producing graduates far beyond the absorption capacity of the education Ministry and the job market.

Therefore, it is evident from MoE’s report that the recruitment projection is on the decline while the enrolment into the two Colleges of Education is on the rise. The Royal University of Bhutan however, reported that it is beyond the control to consider downsizing the teacher outputs until 2018 since they are already enrolled.

With the increased establishment of private schools and colleges in the country, there is greater opportunity for all the private schools to recruit and deploy trained teachers as required by the MoE, Guideline on Establishment of Private Schools (2012). Currently the Annual Education Statistics 2014

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revealed that there are 32 private schools in the country with 983 teachers. But there is lack of information on number of trained teachers employed by all private schools in the country.

However, the Ministry’s guidelines on establishment of private schools seem very stringent with huge requirement of land to meet the minimum prerequisite of educational facilities. Hence, the requirement procedure is not conducive and encouraging for the private individuals to propose for establishment of such schools in future, which may restrict opportunity for trained teachers to be deployed in private schools.

The current scenario on the establishment of private schools in country indicates that most schools do not fulfill even the minimum requirement of the recreational facilities and staffing pattern with the required qualification as stipulated in the guidelines. Therefore, if such trend continues there is a serious challenge against the quality of education in private schools.

The Committee also feels that MoE needs to assess teacher deployment model as there seems to be some serious flaws in the model practiced between rural and urban schools across the country. Similarly, with the introduction of central schools across the country, there is a fear and concern that number of teachers to be recruited would be reduced in the coming years.

Overseas deployment of general graduates as teachers especially in Thailand is gaining a momentum with increase in demand annually. The Committee applauds the initiative of Ministry of Labour and Human Resources (MoLHR) in exploring overseas opportunities for our graduates especially the trained teachers to seek gainful employment in other countries.

1.7 CorporationsIt has been learnt from some of the employees that the corporate sectors face challenges of nepotism, favoritism, and corruption. Some of the corporations do not have proper check and balance system when it comes to Human Resource Management. Transparency in the system of recruiting officers on contract and renewing the contract are felt to be questionable. For instance, contract renewal is not often based on performances. There is no proper guideline in recruiting expatriate workers and about the remunerations paid.

1.8 Cottage and Small IndustriesCottage and Small Industries (CSI) is usually one of the main sectors to create major source of employment outside the agriculture sector. As per the CSI Report 2014, currently there are 15,193 cottage and small industries that are operational, which provides around 41,700 jobs. During the 11th plan, it is targeted to increase operational CSIs to 19,918 and to generate an additional employment of nearly 18,000.

 Based on the current situation, the Committee observed that there are some stringent rules in place to start up cottage and small industries. It has been noted that access to information, approval of clearances, permits, licenses and other documents needs to be routed through different agencies.

To start up CSIs, usually appropriate land is required but with the lack of earmarked land and cumbersome procedures involved in acquiring land lease; setting up businesses is a big challenge. Even with less access to credit from the financial institutions without having the need for collaterals, youths are discouraged to start up businesses.

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 Furthermore, locally produced products can hardly compete in the local market let alone in regional or international markets. With cheaper cost of production and cheaper raw materials in neighboring countries, it becomes very difficult for CSIs to compete with them.

1.9 Information TechnologyThe Government has recognized the potential of Information and Communication Technologies (ICTs) as an enabling tool for our development and put in place various plans and policies.  Some examples are: e-Government Master plan 2014, Bhutan Telecommunications and Broadband Policy 2014, Bhutan ICT Roadmap 2015, e-Government Interoperability Framework (eGIF) 2013, 11th Plan Documents, the e-Government Governance Framework and the draft ICT Industry Development Plan 2016 – 2020 (iDzodrak). 

In infrastructure, the Government has set up the nationwide optical fiber network that connects all the 20 dzongkhags and 205 gewogs in the country which has also helped the service providers in taking their mobile telephony services to every corner of the country. To provide platform for rural communities to access online public services, the government has prioritized establishment of Community Centers (CCs) in all 205 gewogs. In-order to make ICT related services reachable by the people in every nook and corner of the country, the Government had initiated a project called Chiphen Rigpel with the financial aid from India which is scheduled to be over by end of December 2015. 

Information Technology is seen as the most potential job generating sector in most of the countries like India, Philippines, Bangladesh, etc. And to replicate this positive impact in Bhutanese context, where IT is at a grassroots level, due note must be taken of the fact that the Telecom and Internet Service Providers (four in all now) employ about 1050 people, the companies at the IT Park employ about 600 people, and the 74 member companies of Bhutan ICT and Training Association (BICTTA) employ about 800 people.

1.10 Manufacturing IndustriesIt was observed that out of 2,823 production and manufacturing licenses issued by Ministry of Economic Affairs (MoEA) 912 were found non-operational. Some 156 lincenses are operational out of 208 large and medium enterprises and 1,755 licenses from other categories were operational. This information indicates that despite people’s effort to establish businesses and be self-employed, there are hindrances such as domestic products not being able to compete with the imported goods in terms of prices. The Committee also felt that most of the raw minerals and agro harvests are being exported rather than being sold as finished products

1.11 Foreign Direct InvestmentsThe Foreign Direct Investment (FDI) Companies do play a vital role in the country’s economic development. Through the information that the Committee acquired, it can be deduced that FDI companies employ quite a significant number of Bhutanese employees. For instance, currently Mountain Hazelnut Venture Private Limited employs 667 Bhutanese and only eight non-Bhutanese, Amankora employs 368 Bhutanese and 8 non-Bhutanese, Le Meridian employs 110 Bhutanese and 13 non-Bhutanese and even in IT Park, the FDI Company known as Scan Café employs the highest number of Bhutanese.

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2. Observations and Findings on Employment Promotions

The Committee would like to acknowledge that the Royal Government made interventions from early on considering the growing concerns on unemployment such as in 1999 when the National Technical Training Authority (NTTA) was established to streamline all vocational education and training (VET) system in the country. In 2003, MoLHR was formed in order to address issues related to unemployment. Right at the start of the MoLHR as a new ministry, the programmes implemented by its various departments were strategically designed to counter the following causes of unemployment:

Mismatch of expectation: job seekers showing preference for jobs in the government sector and white collar jobs.

Mismatch of skills: job opportunities in the market being more in technical trades whereas the job seekers mostly have general education background.

Slow growth of job opportunities.

In order to uplift the image of blue-collar jobs and to professionalize a skilled workforce, the vocational qualifications framework was developed following which a comprehensive assessment and certification system was introduced. Numerous interventions were made by MoLHR to enhance the quality of VET programmes and simultaneously increase their access. For instance, the VET Policy (2006) and guidelines for Competency Based Training was introduced and regulations and monitoring system is in the process of being developed, however policies lack legal basis for enforcement.

The private and corporate sectors were also supported with human resource capacity development programmes to help enhance their capacity to create more jobs. In addition, through the enactment of the Labour and Employment Act 2007, efforts have been made to improve working conditions in the private sector.

Even today promoting youth employment is a development priority for the Government with a commitment to lower the youth unemployment rate to 2.5 percent by the end of 11 th Five Year Plan (MoLHR, 2013). As a result, MoLHR has placed paramount importance in ‘skilling youth for work and life’ in the 11th FYP and implemented numerous short term skill training programmes such as Youth Employment Skills (YES), Graduate Skills Programme (GSP), Skills for Employment and Entrepreneur Development (SEED), Apprenticeship Training Programme (ATP), Direct Employment Scheme (DES) and on-the-job training (MoLHR, 2014a & 2014b).

Literature review indicates that such skill training programmes are the most popular intervention for the youth (World Bank, 2007). As a result, the present Government has injected a total budget of 550m under the Economic Stimulus Plan to support the youth employment promotion programmes (YEPPs). (MoLHR, Mid Term Review Report, 2015).

Despite numerous interventions being made over the last 15 years, a mismatch of expectations of the job seekers and a mismatch of skills in the labor market continue to be the dominant factors affecting the unemployment situation in the country. Two National Human Resource Development Advisory reports of 2014 and 2015 have consecutively highlighted that the job seekers’ preference for government jobs over that of the private sector, and desk jobs over non-desk jobs is the main cause of youth unemployment. The labor market continues to face the paradoxical situation, in that, while on one hand there are more than 9916 people unemployed Bhutanese people (LFS, 2013), there are about 40,000 foreign workers in the country.

While MoLHR has been implementing the youth skills development programmes as planned in its 11 th

FYP document, no study has been carried out to ascertain the impact of the programmes. Therefore,

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the Social and Cultural Affairs Committee (SCAC) of the National Council decided to review the efficacy of the programmes implemented by MoLHR. As mentioned earlier, due to time constraint and limited human resource, the Committee had to outsource the task to Royal University of Bhutan. Subsequently the study was carried out with the following aims:

1. examine the nature of the youth employment promotion programmes (antecedents);2. ascertain the implementation process of the programmes, including cross-sectional

coordination between the programmes (transactions);3. determine the attitude and perceptions of the programme beneficiaries (outcomes); and4. Evaluate the overall impact of the programmes on skills development and employment

among the youth (outcomes).

The study specifically focuses on the beneficiaries of three programmes such as Direct Employment Scheme (DES), Guaranteed Employment Programme (GEP) and Apprenticeship Training Programme (ATP). While DES is implemented by the Department of Employment, GEP and ATP are implemented by the Department of Human Resources.While conducting the research on the above three programmes, four major themes such as programmes, systems, internal service conditions, and personal attributes were identified.

2.1 Programmes

2.1.1 Benefits of the YEPPFindings from this study suggest YEPP to be beneficial to both the employers and the employees, especially the DES beneficiaries. It has been found that some employers do not care if the job seekers posses the required skills or not so long as they have a positive attitude towards work. Since the government pays the major chunk of the salary to the DES beneficiaries for a year, employers can train them without much financial implications. Otherwise without such a subsidy from the government, the employer would prefer someone with skills who is ready for the job from the very first day. It is encouraging to note that one of the DES beneficiaries working in a hotel received meritorious promotion within a short period of time.

One significant finding that substantially benefitted some employers was in easing the predicaments caused by immigration procedures in hiring technical employees from outside.

However, it is detrimental to note that the training institutes and the beneficiaries of the YES and GSP were disadvantaged as the employers preferred DES beneficiaries owing to the availability of the salary subsidy. Such a practice has brewed inconsistencies, creating inequality in resource distribution. The two programmes (Skill development programmes and the DES), which were both implemented by MoLHR under the same programme, were competing against each other instead of complementing each other. The cost incurred on training the beneficiaries under the skilling programmes and the cost incurred on subsidy for DES beneficiaries were different. Furthermore, it was quite surprising to note that some of the organizations were not interested in extending the service contract of the DES employees after the end of the contract period, as it would mean additional expenses on the part of the company. The employers rather preferred employees leaving the organization, so that they could fill the Human Resource need by recruiting new employees under the DES scheme. In that way, employers would significantly save the cost of new recruits. It can be speculated that the sustainability of the DES programme is at risk. It is argued that at the end of the 11 th Five Year Plan when the government stops providing subsidy, the DES employees will be unemployed.

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2.1.2 Overall Quality of the YEPPEver since the YEPP was implemented in July 2014, MoLHR has gainfully employed more than 2500 unemployed youths into various private and public sectors. This has been made possible mainly due to the commitment of the current government to address the issue of rising unemployment in the country. In line with this commitment, the current Government has injected Nu. 550 millions to support the YEPP as a part of the Economic Stimulus Plan. Both the employers and the employees perceived that the YEPP has been able to narrow down the unemployment situation only to some extent. This is an indication that the quality of the YEPP needs to be enhanced, especially in terms of the duration of the programme. Furthermore, YEPP beneficiaries with bachelors’ qualification had much lower perception about the overall quality of the programme compared to the other participants (below class 10, class 12 and TTI & Diploma). This is an indication that the programmes for youth with a bachelors’ degree have to be of a higher quality.

A deviation in the programme’s intent was identified in the implementation process. Although the intent was to study the sustainability of the firm before placing the graduates, it was clearly observed that such assessment was not carried out in detail.

2.2 Systems

2.2.1 Government Intervention and MonitoringFindings revealed that the government intervention in terms of putting in place appropriate work conditions and signing contracts was perceived both by the employers and the employees as an advantage to the YEPP. The employers found the government intervention helpful in keeping a watchful and vigilant track on the conduct of the employees. However, most of the employers found the government was either not taking proactive initiatives or being indolent in following up on the employers’ grievances regarding the misconduct of the employees. Such findings are partly attributable to the inefficiency of the dispute settlement body in the MoLHR, amongst other things. This has impacted in the follow up of the employers’ grievances about the employees’ misconduct. It has been reported that an employee, who has signed a contract with MoLHR, do not get the prompt response from MoLHR, they are instead told to forward the case to courts.

The study reveals that there is no effective monitoring system in place. It is likely that the lack of effective monitoring will promote corrupt practices, disengagement of beneficiaries, and unfavorable work conditions for the beneficiaries.

2.2.2 Implementation PoliciesIt was found that the programme policies were framed with the best of intentions; however, there were some conflicting policies. One of the best instances of the conflicting policies was with the implementation of YES and DES programmes. Training institutions were offered to train unemployed youth through the YES programme. After conducting a rapid market appraisal (job market survey) the training institutions provided training to the employees. Contrarily, the government again came up with DES programme, which supported the private firms with partial payment of salary for those recruited through this scheme. Since DES had the advantage of subsidized salary payment by the government the employers preferred DES employees to YES employees. Ultimately, some of the training institutes were unable to place most of the YES trainees despite the need expressed by the employers during the rapid market appraisal.

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The current MoLHR policy of paying subsidized salary to DES employees has disadvantaged the YES employees. Owing to the government subsidy paid to the DES employees who are not trained or skilled, they receive a higher salary compared to the YES employees who are skilled through a training programme sponsored by the MoLHR. Such practices have de-motivated YES employees who have undergone training for three to six months.

Currently he MoLHR also has a policy of training youths in entrepreneurship under the SEED programme. The beneficiaries of the programme are guaranteed collateral free loans if the financial institutions accept their business proposal. Findings showed that even the business graduates who have taken up entrepreneurship as a credited module are also required to undergo basic entrepreneurship programme organized by the MoLHR to avail the loan. Such policy clearly shows a disconnection between the programmes and the stakeholders.

2.2.3 Career CounselingLack of professional career counseling for the youth has consistently emerged as one of the most recurrent challenges for the youth seeking employment. Lack of career counseling also had implication on youths’ level of job satisfaction and job-skill mismatch. The reasons for their dissatisfaction with the work conditions and mismatch between their skill and job can be linked to their lack of awareness on the nature of the job they are applying for, which in turn could be solved by career counseling. Lack of career counseling also led to youth misperceptions and confusion during the course of a job search.

This is an indication that the YEPP beneficiaries have not received adequate support in terms of career counseling. More specifically, more than 38% of the survey respondents agree that they did not receive career counseling from MoLHR.

Career counseling should be most vigorous during employment related workshops and seminars, including job fairs. As a long term measure, MoE and RUB should not only include career counseling in their curriculum reforms but should also have career counseling orientations before the youth graduate out of their institutions.

2.2.4 Job-Skill MismatchThe study found that many unemployed youths have been rightly and meaningfully employed through the YEPP. It is evident from this study that job-skill mismatch still exists in the labor market. The mere fact that thousands of youth attend YEPP indicates that high school as well as university graduates are not ready for work. It is apparent that the current education system in Bhutan is too focused on producing plain graduates who are not ready to take up the blue-collar jobs that are available in the job market.

Furthermore, the current study revealed that there are some cases of mismatch in terms of employment. One of the most consistent agreements made by both the employers and employees was on the issue of employment mismatch. There were instances of IT graduates employed as chefs, and business and finance graduates employed in stores and marketing departments.

Findings from this study suggest that the existence of a mismatch in the labor market at least in terms of YEPP beneficiaries is mainly caused by three interrelated circumstances. First, youth are desperate to get a job. As a result they are in a hurry to get a job anyhow, so they do not care to find out if their skill and knowledge matches with the job. Secondly, the employers do not mind employing graduates with the wrong skill for their job because they need to pay only a lesser chunk of the salary as the government funds the major chunk. It has been also found out that the employers benefit as they can engage their employees in attending to their personal chores and tasks. Thirdly, there is a lack of a

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proper communication channel and orientation, including professional career counseling between the three stakeholders: the government, the prospective employers, and the prospective youth employees on the kind of skills the graduates possess and the employers’ need.

2.2.5 Source of Job InformationIt is been found out that the most popular source of job information used by the beneficiaries were friends, Facebook, and other media. Although there are Help Centres, youths may not be visiting these centres due to a lack of information about the centre or even if the youth are aware of the Help Centres, the location of these Help Centres at the office of MoLHR makes it inconvenient for the youth. The survey found out that only 1 in 20 visited the help centre for job search information while 1 in 2 received information from friends. This clearly shows that the help centre is hardly visited by the youth for job search information.

2.3 Internal Service Conditions

2.3.1 Work Conditions and ExpectationsFindings from this study indicate that the overall work condition of the employees depend on the level of professionalism of the companies/firms. The survey reveals that it is relatively better in well-established companies, while the employees in the local companies/firms work under poor working conditions. Some employers claim to have systematic work conditions, including service manuals while some others do not. According to the employees, the companies and firms do not have written service books and those who have do not implement it earnestly. Employees have to often work overtime without overtime payment, they have to multi-task, attend to personal chores of the employers, and there are no safety measures at the work place.

This is an indication that the employers are not so much concerned about the safety, work hours, leave rules, retirement benefits, promotion system, stress management, and training background of the employees. In the long run, such practices are likely to promote nepotism, unsafe work environments, lack of accountability and transparency, and create a society that would have a negative impact on the national vision of promoting Gross National Happiness. The findings suggest that some of the petty firms are not able to put in place their service manuals due to a lack of capacity, as people who are uneducated own these firms.

2.3.2 Job SatisfactionIn terms of job satisfaction, the study found both the employer and employee participants to be quite satisfied with the YEPP. The reason for their satisfaction, however, differs. For the employees the reason is the double salary package, and for the employers besides enjoying the government subsidy they also get their employees to do the odd jobs of the office, including attending to their personal chores.

However, the overall satisfaction levels of the employees appear not to be very robust. The average score for the two job satisfaction were just above average. This indicates that the employees lack the opportunity to upgrade themselves professionally and academically and that there is not much of care and respect shown to them by their work supervisors. It is apparent from this that if employers want their employees to perform well, they have to provide equal pay for equal work. There has to be promotion systems in place, motivated co-workers, and a caring supervision system.

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2.3.3 Job SecurityThe study found the existence of an apprehension about job security by the employee participants. Job insecurity existed in two forms; job insecurity during the contract period, and the post contract period. There were instances where the YEPP employees were asked to discontinue with their employment contract during the periods of the company’s downturns. Another apprehension pertains to their post-contract period job security. Most of the employee participants, especially employed by small business set-ups, were apprehensive about their job security after the expiration of their contract period.

2.3.4 SalaryThe study found that the participants were quite content with the salary. The employees expressed not only their contentment but also showed gratitude towards the government for giving them an opportunity in making their lives sustainable through the YEP Programmes. However, three issues related to salary emerged from the study. The first issue pertains to the diploma employees regarding their salary package. The diploma employees expressed a need to revise their salary package in comparison to class 10 and 12 pass outs. The second issue pertains to the timely payment of the salary. The study found that most employers did not pay the monthly salaries on time. This impacted the employees in their daily sustenance, including paying their monthly house rents on time. The third issue pertains to overtime payment. The study found that most of the employees work more than the working time set in the contract with MoLHR but none of the employees were paid overtime payment. Some of the employees were aware of the overtime payment policy while others were not aware.

2.4 Personal Attributes

2.4.1 Employment Preference

The study reveals that youth prefer government jobs over private sector jobs. The YEPP beneficiaries measure the advantage of private sector jobs in terms of both personal and professional enhancement. They found the private sector jobs more challenging while the government jobs more secured. This is echoed in the words of a female employee, “I want the challenge of a private sector job and job security of a government job. My three months of IT training at this company is better than three years of undergraduate training at Sherubtse College.” This goes on to show how the success of the YEPP is also dependent on where and how the employees were recruited and placed. When asked about the preferred sector for work, most respondents indicated their preference for government jobs. The figure clearly indicates preference for government jobs followed by corporate jobs. It is also interesting to note that most of the youth are not interested in starting a business or self-employment despite the increasing emphasis on entrepreneurship. The two findings confirm the contention that the youth in Bhutan still prefer white-collar jobs in the government sector. However, it is also encouraging to note that quite a significant number preferred blue-collar jobs.

2.4.2 Work Skill and AttitudeThe findings from this research generally indicated that the work knowledge and skills of the YEPP beneficiaries is poor. However, according to some employers, TVET graduates possessed better awareness of work skills, including safety measures than the other employees. This finding is consistent with experiences of other countries. For instance, in Sweden, VET programmes achieved a higher rate of labor participation with skilled workforce, and in Denmark there is a positive relation between employment growth and VET programmes. It was revealed that those who participated in the training have a high level of soft skills and the productivity was increased at the work place. The current study ascertained that the attitude of the employees depended on three factors: the level of professionalism of the employing company; individual persona of the employees, and the individual

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persona of the managers or employers. The YEPP beneficiaries employed with companies with ethics and ideals of international standards not only exhibited very positive attitude toward work and learning but also took personal initiatives in learning new skills. Both the employers and the employees confirm this. On the contrary, the youth employed with the local, small business set-ups exhibited a mixed attitude towards work and learning. Some youths were found to be very committed to work with positive learning attitude while some others lacked commitment and attitude, which again depended on the persona of their managers and employers.

The lack of work skills in the employees was also confirmed by the survey findings. It is apparent that these employees have neither the required skills nor that the training providers have provided the required work skills. While the cause and effect relationship could not be ascertained, this study found that there was a significant difference between youth employed in the private sector and corporate sector. Furthermore, this study also discovered a significant difference in terms of social skills between respondents with a Bachelors degree and other categories (below class 10, class 12 and TTI & Diploma). Youths belonging to other categories exhibited much higher social skills while compared to the youths with a Bachelors degree. Plausible explanation for such findings could be attributed to the fact that the youths with lower academic qualification view skilling programmes as beneficial to them in terms of acquiring social skills.

3. Recommendations on Employment Creation

The Committee proposes to recommend to the Government to:

3.1 Recognize agriculture sector as one with great potential for generating employment and therefore make necessary investments in order to enhance its contribution to GDP particularly in view of the fact that nearly 60% of the people and poor are engaged in this sector.

3.2 Review and ease GRF land leasing procedures.3.3 Enhance access to credit facilities by increasing agricultural loan portfolio of financial

institutions so that both subsistence farmers and larger businesses such as exporters of apples, oranges and asparagus are targeted and benefited equally.

3.4 Invest and capitalize on the potential of Bhutan as a MICE destination besides cultural and trekking tourism.

3.5 Monitor employment situation in FDIs and Hydro-power constructions in terms of skills and knowledge transfer and replacement of the expat workers by Bhutanese.

3.6 Explore the possibilities of considering Bhutanese construction companies including CDCL in Hydro-power Constructions through Government’s nomination.

3.7 Review the salary structure and wage rates of workforce in relation to nature of the work and the living standard of a place.

3.8 Facilitate establishment of more private colleges so that Bhutanese youth get opportunities to study in the country which will reduce out flow of foreign currencies and also provide job opportunities for trained teachers.

3.9 Explore overseas employment opportunities for our trained teachers jointly by MoLHR, MoE and RUB. Also plug the gap between estimated need for teachers and number of graduates within a given time frame.

3.10 Shift focus towards Information and Technology/ITES industry development having put in place the supporting infrastructure along with the enabling plans and policies.

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4.Recommendations on Employment Promotions

The Committee proposes to recommend the Government to:

4.1 Establish a coordination mechanism to ensure that every sector and agency prioritize employment promotion and generation in order to overcome the current perception of it being the sole responsibility of MoLHR.

4.2 Do a need assessment of having a TVET Act and accordingly propose for enactment.4.3 Consider re-aligning some programmes, especially the YES and DES programmes in terms of

their intent and objective. The DES and the YES can be merged as one programme since the target beneficiaries are the same.

4.4 Put in place effective monitoring and evaluation system because the Government is spending a huge amount of money.

4.5 Separate promotion and regulation of YEPP so that it is not conflicting. 4.6 Create more awareness on the use of job portal system as many job seekers are still not aware

of it and also provide clarity and efficient online feedback system. 4.7 Re-activate in-house dispute settlement body (Tribunal system) to proactively settle

grievances between the employees and the employers. 4.8 Revitalize the existing career counseling services by establishing an effective career

counseling system at two levels: short term measures, and long-term measures.4.9 Place Job Help Centers in convenient locations that can be easily accessible to the youth and

cater services such as career counseling, workshops on providing job search information, education-to-work transition seminars and also provide work place orientation programmes for youth who are employed.

4.10 Conduct enhanced orientation programmes for both the employees and the employers.4.11 Institutionalize the service manual system of the employing organizations and must

produce while employing the YEPP beneficiaries.4.12 Design a comprehensive youth employment policy that includes programmes aimed at

promoting attitude change among young people.

5. Further, the Committee proposes to recommend to the RCSC to: Ensure adequate staffing of parliament and LGs based on provisions of NC, NA and

LG Acts.

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