"The economy of Bhutan is characterized by the predominance of people engaged in self-employment," reported the government's Planning Commission in 1989, "particularly those working their own land." Statistics available for the mid-1980s revealed that 87 percent of the working-age population was involved in agricultural work, another 3.4 percent in government services, 0.9 percent in business, 2 percent in "other" occupations, and 6.5 percent--mostly teenagers and young adults--that had no stated occupation. In the late 1980s, there was a serious shortage of indigenous nonagricultural labor and, in the government's view, an overabundance of foreign laborers. To carry out the construction of roads, hydropower plants, and other infrastructure development so important to modernization, the government, however, has had to depend upon foreign laborers. Low wages for laborers, ties to agricultural work, and a dispersed population led to the influx of migrant labor, estimated to have reached 100,000 Nepalese laborers from India in 1988.
Foreign laborers in Bhutan increased during the 1980s, compelling the government to identify and expel the growing number of those without work permits. In a government crackdown starting in 1986, some 1,000 illegal foreigners were expelled. Most were Nepalese; Bangladeshis and Indians made up the balance. By 1988 the crackdown had reduced the number of foreign workers and provided opportunities for some 4,000 unemployed Bhutanese to join the work force.
Trade union activity was not legalized until 1991. There was no collective bargaining, and labor-related issues were nil in a society in which less than 1 percent of the population was involved in industrial work. Bhutan was not a member of the International Labour Organisation.
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