PETALING JAYA: The high unemployment rate in Sabah is partially due to a domino effect from the lack of basic infrastructure like transport networks within the state, says a Sabah employers’ group.
Sabahans comprise 29% of all unemployed Malaysians, and Sabah Employers Association president Yap Cheen Boon said this is a culmination of multiple factors over the years.
Yap told FMT that Sabah has been heavily reliant on sea transport and the lack of well-developed roads or even rail systems within the state had inhibited growth.
“That makes it difficult to produce and ship out (products), while raw materials are costlier to ship in. Therefore, Sabah cannot grow like its peninsula counterparts.
“These issues are typically referred to as infrastructural constraints, which have made us who we are with limited technological advancement. It can only be solved in the medium- to long-term,” he said.
Yap added that it was difficult for firms to rely on domestic consumption to grow as the general population of Sabah were low-income earners.
He said that the lack of purchasing power meant there was less domestic demand to support the growth of local companies, and this was evident with more than half of Sabahan businesses being enterprises that hire five employees or less
“Many operate in either low-value service sectors, or primary agricultural sectors with low technological input. These factors leave employers struggling to hire more workers and pay higher salaries.”
On Monday, human resources minister V Sivakumar said there were 588,000 unemployed Malaysians across the country, with Sabah the highest among all states at about 169,800, or 29% of the total.
Sivakumar said the unemployment rate in Sabah reached 7.7% during the first quarter of 2023.
Yap urged the Sabah government and Putrajaya to take advantage of the state’s strategic location and swiftly develop its infrastructure, especially with Indonesia set to open its new capital, Nusantara, in 2024.
“Sabah should serve as the hub for the movement of goods between China, South Korea, Kalimantan, and the Philippines. But this window is closing fast as Kalimantan is developing (quickly).
“So again, this has now become a government efficiency issue – the road networks and customs, immigration and quarantine (CIQ) complex (at the borders with Kalimantan) are still only plans on paper.”
Meanwhile, the Sabah chapter of the Malaysian Trades Union Congress (MTUC) expressed concern that the high unemployment rate in the state would lead to a brain drain, with better paying opportunities available in the peninsula.
“Should this trend persist, the potential loss of our valuable human capital looms large. Moreover, such a situation could erode our competitiveness at both national and international levels,” Sabah MTUC vice-chairman Margaret Chin said.
Chin welcomed the establishment of the Sabah Labour Advisory Council, especially since most of the Sabah workforce were not unionised and had no one to go to for their work-related issues.
She said the council will be a good stepping stone to getting the ball rolling to solve the needs of the local labour market.