An astonishing 35 percent of the working-age population—209,299 individuals in substantial terms—are economically inactive in the country, according to the latest Labour Force Survey Quarterly Report. Economic inactivity refers to those who are neither employed nor actively seeking work.

The report reveals that women account for nearly double the number of economically inactive individuals compared to men, with 132,779 women against 76,521 men. Rural areas are disproportionately affected, with a larger economically inactive population. Economic inactivity rates are also higher among the older population.

The question that begs an answer is: why is there such a high rate of economic inactivity among the working-age population in the country?

To a large extent, our cultural and social norms perpetuate economic inactivity. In our close-knit communities, strong family support systems often reduce the urgency to seek employment. Individuals are not under pressure to join the workforce because they can rely on family support; there is always this cushion to fall back on.

That said, we need to deep dive to understand the underlying causes and develop actionable strategies to create jobs and economic opportunities for this critical segment of the population. We have barely a few decades to fully leverage our demographic dividend. According to projections, Bhutan will transition into an ageing society by 2027. This would mean we will have a growing proportion of elderly individuals who will require support.

This shift in our demographic landscape will have multifaceted implications for our gross domestic product, economy, and healthcare system, among others. As the number of older citizens rises, the pressure on the economically active population to provide financial support and services will intensify. This will have far-reaching implications for the country’s economic dynamics.

A large number of our young and productive population have already migrated overseas for work and study. Making matters worse, almost one third of our working-age population is economically inactive. The repercussions of this will be quite significant in the short term as well as in the longer term.

A small workforce invariably leads to slower economic growth, undermining national productivity. The declining labour force participation could threaten the country’s national goals of sustainable development and self-reliance. This will also lead to a shrinking tax base, which will again have a rippling effect on the quality of essential public services. 

A focused priority must be given to those currently inactive. The key question is: how do we bring them into the fold? Our policymakers must prioritise job creation across all sectors, including rural economies. This can be achieved by supporting and incentivising sustainable businesses and start-ups. More economic activity would create more jobs. 

To take full advantage of our demographic dividend before it is too late, we must recalibrate the entire system—by skilling, re-skilling, and upskilling our young population at a scale and pace we have never imagined before.

Our young people must be equipped with the skills needed to thrive in a rapidly changing economy. We will need a robust workforce to take our nation forward.