Govt to reduce unemployment rate to 6.5 percent in the 12th FYP

The reduction rate is down from the earlier target of 9 percent

Creating productive and gainful employment has been identified as one of the National Key Result Areas (NKRA) out of the 17 NKRAs in the 12th plan.

The key performance indicators under this particular priority are to maintain national unemployment rate below 2.5 percent and reduce youth unemployment rate from 12 percent to 6-6.5 percent. On the same line, MP Rinzin Jamtsho expressed during the ongoing parliament session that it was important for the government to set the minimum target below 2 percent if his proposition to reduce it to 1.5 percent sounds very ambitious.

The MP also suggested that the government, in their objective to reduce the youth unemployment rate from 12 percent to 6-6.5 percent, should be clear and specific to reduce the rate either to 6 percent or 6.5 percent.

“Currently, an important issue is on the high prevalence of unemployment rate in the urban areas than in rural areas where more than 22 in every 100 youth in the urban areas are without a job. Therefore, I think the government should also aim to reduce the number of youth unemployment rate in the urban areas by at least 10 in every 100 youth in the future,” said the MP Rinzin Jamtsho.

The labour force survey found that the unemployed youth are concentrated more in the urban areas with 17 percent and only 8.6 percent residing in rural areas.

The labour minister, Ugyen Dorji responded that the government will aim to maintain the youth unemployment rate at 2.5 percent or below as deemed healthy internationally. “To avoid further confusion, the government will set the target to reduce youth unemployment rate to 6.5 percent explicitly. And on the need to focus more on the youth unemployment in urban areas, I think the government’s aim to reduce the youth unemployment by 6.5 percent will address the issue,” said the labour minister.

Acknowledging the concerns expressed by the MP from Shompangkha, the labour minister said that the government will be focusing on creating conducive employment opportunities in the construction sector which has huge potential to absorb hundreds of youths. “On one hand, the unemployment rate is increasing in the country and on the other hand, the construction and agriculture sector are facing shortage of skilled labour forces. Thus, the ministry plans to make opportunities in such sectors attractive either by improving the incentives or through new policy frameworks aimed at employing more youths.”

The labour minister, in response to the opposition leader’s suggestion to institute a committee that includes members from all the relevant stakeholders to address the issue of youth unemployment in the country said that the concerns of the government and opposition seem to vibrate on the same frequency. “Just as suggested, the government already has plans to institute Employment Responsibility System from Royal Civil Service Commission, corporations, private organizations among others to address the unemployment problem. The ministry is currently exploring ways to make the system more efficient and doable.  With the new system, we plan to collaborate with all the nine sectors that we have identified. The government agencies and sectors will come together and will be the responsible for creating certain number of jobs in each sector.”

During the Friday question hour session in the parliament, labour minister said that more than the hydro projects, youths need to be regarded as the jewel of the nation and that the government will invest in their skills development more than ever before.

“In the 12th plan, it is projected that 82,000 jobseekers will enter the job market, of which 77,000 will be the youths. Thus, through the Employment Responsibility System, the labour ministry projects to create employment opportunities for 67,000 youths in the 12th plan. The government will also continue with the Direct Employment Scheme which has been revised further to improve the scheme better- the scheme is projected to employ 20,000 youths,” clarified the labour minister during the Friday question hour session in the National Assembly.

Lyonpo Ugyen Dorji also added that the government will continue with the Overseas Employment Program. “It is important for the government to equip our youths with necessary education and skills and the government will look into the existing loopholes in the overseas program, rectify and come up with measures to implement the program more successfully.”

The labour minister also added that in the 12th FYP, the labour ministry has decided to allocate 75 percent of the total budget for the ministry for technical and skills development of the youths.

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