To create employment for youth and to promote broader economic diversification in the country, the finance minister and the World Bank signed an agreement to finance Youth Employment and Rural Entrepreneurship project in Thimphu yesterday.

The three-year project worth USD 1.25 million is financed by Japan Social Development Fund through the World Bank and will be implemented by the agriculture ministry.

The project is aimed to bring innovation in youth employment approaches and support country’s socioeconomic development, improve business opportunities for young population and improve livelihood.

Finance minister Namgay Tshering said agriculture sector offered huge potential as a driver for both economic diversity and employment creation.

“These projects are very timely as it would generate youth employment, including enterprises and value chain development and stimulate the young generation to take interest in agriculture sector as a source of self-employment and business opportunities,” he said.

The project is expected to develop 100 enterprises, which would create 400 direct new jobs for out of school and unemployed young people in six dzongkhags in Southern and Western Bhutan according to the World Bank.

While Bhutan has made impressive progress in poverty reduction and economic growth job creation for young people remains a challenge, given the current mismatch between employment opportunities and youth education, skills, and market needs according to the World Bank.

The minister highlighted that the agriculture sector employed 58 percent of the total population and contributed around 16.67 percent to the GDP today.

World Bank’s vice president for the South Asia region, Hartwig Schafer said the project would make significant contribution towards the government’s mission of narrowing the gap.  “It would provide opportunities for unemployed youth in rural and disadvantaged areas to have an alternative to create their own livelihood. I think it is extremely important.”

He said that the project would curb the current trend of youth not being able to find employment in rural areas and control rural-urban migration, common among the youth.

“The project would help them stay in rural areas, create businesses, lead a life of an entrepreneur and provide a livelihood for family and help Bhutan in the overall achievement of creating a society of more equality and development,” he said.

Finance minister and World Bank’s country director for Bangladesh, Bhutan, and Nepal, Oimiao Fan signed the agreement.