Thimphu, Sep 14 (Agency) Bhutan needs to diversify its economy beyond hydropower, implement agricultural and financial sector reforms for long-term growth and job creation for youth., according to a new report of the World Bank. Adama Coulibaly, the World Bank’s Resident Representative for Bhutan, emphasised the importance of economic diversification in enhancing Bhutan’s resilience, job creation, and growth sustainability, Bhutan’s national newspaper Kuensel reported on Friday. “By fostering a business-enabling environment and promoting a programme that provides excellent training on targeted technical and professional skills to the youth of the country can attract foreign direct investments and accelerate job creation in key sectors that can support the country’s growth ambitions,” Kuensel quoted Adama Coulibaly. He added that Bhutan can leverage its natural capital and international recognition as the first carbon negative country in the world to boost green, resilient, and inclusive growth.
The World Bank report christened ‘Bhutan Country Economic Memorandum’ states that despite Bhutan making significant strides in reducing poverty and advancing human development, structural transformation has been slow and job opportunities have been limited, especially for the educated and the youth. According to the report, the country enjoyed high real GDP growth, averaging 7 percent from 2001 to 2019, largely driven by the hydropower sector. In 2021, hydropower contributed more than a third of goods exports and domestic revenues, or 16 percent of GDP. In recent years, Bhutan’s GDP per capita increased at a high of 6.3 percent annually and gross national happiness index per capita reached USD 3,040, close to the World Bank’s upper-middle-income threshold. However, the Bhutanese economy faced difficulties because of the Covid-19 pandemic and other global challenges. The unemployment rate increased from an average of 2.8 percent between 2015 and 2019 to 5.9 percent in 2022, with urban and educated youth being disproportionately affected, the report said. The World Bank report identifies several obstacles to economic growth, including a small private sector, low productivity in microenterprises, and inefficiencies in the labour market. “A diversification of the renewable energy mix with investments in solar, wind, and geothermal could increase Bhutan’s clean energy generation capacity with positive impacts on its green growth strategy,” the report added.