Analysts: Industrial investments, women-friendly policies can address unemployment issue in Sabah

KOTA KINABALU, Sept 4 — Sabah's record of having the highest number of unemployed in the country has come as no surprise as the state continues to struggle to find a base economy to move the state’s almost 170,000 jobless force, analysts said.

Universiti Teknologi Mara senior lecturer and political economist associate professor Dr Firdausi Suffian said that it is a perennial issue that has plagued the state for at least two decades.

"We have always had a high unemployment rate. It was around 5.5 per cent pre-pandemic, which statistically speaking, is not good. In economic terms, around 3 per cent of frictional unemployment is fine.

"But we were at 9.1 per cent during the pandemic, later dropping to 8.1 per cent, so 7.7 per cent actually shows some progression.

Human Resources Minister V Sivakumar recently reported that Sabah again topped the list of unemployment with 169,800 jobless people or 29 per cent of the national rate.

The unemployment rate currently stands at 7.7 per cent, more than double the national unemployment rate of 3.5 per cent.

According to the analysts who spoke to Malay Mail, the reasons for the high unemployment in the state remain largely the same over the years.

They said there a lack of supply for the type of jobs in demand, the entry-level and low salaries are not attractive to many, labour policies do not favour the employees, poor infrastructure leading to poor working environments are among the reasons.

Firdausi pointed out a glaring lack of development in the industrial sector, saying that in the past two decades, there has been no major expansion of this sector which can provide a baseline for jobs for the masses.

"We have seen development in the agricultural sector, and that is focused on palm oil. So we are doing considerably well there. Others where we are thriving are the services sector - tourism, logistics, accommodation, oil and gas — we do well here, too.

"But the industrial sector is not expanding so much, and we still need this to cater for the masses of the available workforce,” said Firdausi.

Universiti Malaysia Sabah economist James Alin said that Sabah lacked the investments that can tackle the problem of job supply, especially when it comes to tertiary-educated graduates.

"We definitely haven’t done enough to open more sectors and job availability. There is the vision, the Kota Kinabalu Industrial Park for instance, it's supposed to drive this sector, but they have not made that much of an impact.

"Compare it to Johor’s Iskandar area for instance, where thousands of workers commute and are bused to work daily. That is real job creation, and what is supposed to happen. We do not have that,” he said.

He said that Sarawak, who also has a spread out but smaller population of 2.7 million (compared to Sabah’s 3.5 million), has done better than Sabah in this aspect. Sarawak also has about 3.5 per cent jobless rate.

"Sarawak’s GDP (gross domestic product) is RM120 billion, compared to us at RM80 billion. This is not right, and the government should explain this,” he said.

Using the GDP per capita income, he estimated that the state has potentially lost out on RM12 billion from its unused workforce.

"There are just not enough jobs for the demand, and the type of jobs that are needed. It is odd that the GDP growth over the years does not correspond with the job market. There is economic growth but not enough job creation.

"They must somehow attract new business and investments that come with new jobs for the locals. Many of the big investors don’t employ locals, or only want low skilled labour,” said Alin.

Alin and Firdausi said that while the government’s priority ought to be job creation, the manufacturing and factory industry alone will not be enough to cater for the job market.

It must also consider mid to high range jobs like engineering and marketing that can uplift the population and employ fresh graduates.

One way to do this is in the downstreaming industry which can provide a wide variety of opportunities that upstreaming and resource extraction cannot.

"We are an oil producing state, but for some reason, we don’t have a petrochemical industry. Other regions have successfully enticed investors in this sector but we are losing out,” said Alin.

"Downstream activities is a value added industry, which requires skilled and semi-skilled workers, So this suits another level of workers. Factories alone won’t work because young graduates are over qualified and won’t settle for that,” said Firdausi, adding that the current labour matching policies do not work with the market.

"The bigger economy to look at is the industrial sector, which is crucial to drive the economy, due to the export and value adding, but the semi skilled and skilled job scope is where the salary is higher and it can also expand our trading and trade volume,” he said.

Make the workforce more women friendly

Another aspect to look at is the portion of women who are part of the unemployed, which Firdausi said numbers at about one third to half of the total, but also about the national average.

Anthropologist and University Malaya senior lecturer Vilashini Somiah said about half of the women population in Sabah are unemployed, partly because the workforce is not always friendly to women, and in particular those in rural areas who do not have as many options.

She said that while women in the conventional workforce was more common than before, the reality is far more complex as women take on more roles as the household’s main caregiver and provider.

Post pandemic or after having children, many may choose not to enter back into the workforce, instead opting to go into the gig economy or self-business. But the benefits of empowering women financially has shown to be beneficial for the economy.

She said that some women may want more work-life balance and they start doing odd jobs or using their skills to leverage into a part time business like sewing, baking, or sales. Others may not get to that level as they lose confidence and feel left out of the job economy.

"But what is clear is that more needs to be done to empower them in the workforce, especially those in rural areas who did not get the same access to education and exposure - that is why there are so few involved in the STEM industries,” she said.

While she acknowledged that there was space in mega economies like the development and industrial sectors for women, she said this may not be the answer for the long term.

"Women do have space in those big economies - canteen operators, sales, waitressing, cleaners, but it's perhaps not the answer. To see economic empowerment, this is not the long term solution. It doesn’t solve socio economic issues.

"To do that, financial literacy needs to be taught. Employers need to invest in human resources and people need to be taught how to recognise opportunities. But to do this, the attitude towards women and marginalised communities must be more inclusive.

"Pull resources for more training and introduce new skills. Offer upskilling and reskilling courses. Basically, more ‘teach people how to fish’ and find new fishing tactics,” she said.