How Budget 2021 could help jobless youth in Sabah

Representing the majority of semi-skilled and low-skilled jobs, youth unemployment has been a prominent problem especially in Sabah, known as the poorest state in Malaysia with a poverty rate of 19.5% and the country’s highest unemployment rate of 5.8% in 2019.

Even before the Covid-19 pandemic, Sabah had recorded a youth unemployment rate of 14% in 2019. The daily three-digit Covid-19 infections and tightening of movement restrictions across the state will lead to more than 284,000 Sabahan youths becoming unemployed, according to the statistic department.

With the second wave of job retrenchments and closures of local businesses, the estimated youth unemployment rate in Sabah could rise to at least 20%.

The Covid-19 pandemic also reveals the vulnerability of the service sector as well as the mining and quarrying sector. The closure of international borders and interstate travel ban has resulted in a drastic drop in international and domestic tourists in Sabah.

Many shopping centres and F&B outlets are relatively empty as only takeaway and grocery services are allowed during the conditional movement control order (CMCO).

A sharp fall in the global oil price also negatively affected the economic performance of the mining and quarrying sector. The negative effects that resulted from all these have painted a bleak future for the youth of Sabah.

Instead of purely relying on the service sector (46.1% of Sabah’s GDP in 2019) and the mining and quarrying sector (26.4% of Sabah’s GDP in 2019), the state government should realign its focus by developing the agriculture and manufacturing sectors. As of 2019, the contribution of the agriculture sector was 16.1% of the state’s GDP, and 7.6% for the manufacturing sector.

To diversify its revenue stream, Sabah could reduce its dependence on palm oil by focusing on the development of large-scale agricultural activities. With the help of green and modern agricultural technology, it would enhance the value of production while providing opportunities for Sabahan youths to work in renewable sectors.

In addition, the Sabah government could increase crop diversification and produce high quality agricultural products. Such efforts could develop Sabah as an Asian food hub to fulfil the huge demand of major markets such as China, Singapore and Brunei.

To ensure sufficient timber supply, the Sabah government could also increase the planting of suitable tree species on a large scale by extending Budget 2021’s allocation of RM500 million for the Forest Development Loan (PPLH) programme for the timber industry. With increasing demand for agricultural and wood-based products would come job opportunities for Sabahan youths.

As the industrial sector becomes a catalyst in generating more employment opportunities for the people, especially during the implementation of the 12th Malaysia Plan (2021-2025), Sabah could increase investment in Palm Oil Industrial Cluster (POIC) in Sandakan and Lahad Datu, Kota Kinabalu Industrial Park (KKIP) and Sabah Development Corridor.

This would generate higher value-added downstream processing activities in the state and see Sabahan youths employed in such mega infrastructure projects.

The exploration of the downstream industry based on biomass resources from oil palm waste and forestry could be another potential source of income to help Sabah become an agriculturally-based industrial state by 2030, on top of creating new job opportunities for Sabahan youths.

Aside from the federal government’s Penjana and Prihatin stimulus packages, the Sabah government should continue the initiatives from the previous Warisan administration by:

1. Emphasising and prioritising youth development in line with the Sabah Youth Development Strategic Plan, 2016-2030;

2. Increasing youth involvement in high-impact economic sectors such as the agricultural, digital and cultural sectors;

3. Organising programmes on agricultural entrepreneurship development through the establishment of farming entrepreneurs, recognition of outstanding agriculture entrepreneurs throughout Sabah and implementation of Integrated Agricultural Skills Courses for youth; and

4. Continuing the Youth Entrepreneurship Aspiration Programme (YEAP) to enable young people to start business with a low start-up capital.

Although Budget 2021 revealed that Skim Jaminan Penjanaan Pekerjaan (JanaKerja), MySTEP (Short-term Employment Programme) and the apprenticeship programme would provide opportunities for thousands of Malaysian youths to be hired or upgraded with relevant skillsets, it is still unclear how many Sabahan youths will benefit from the federal schemes.

Therefore, EMIR Research has several policy suggestions for the Sabah government to consider:

1. The Sabah youth and sports ministry could modify the National Apprenticeship Scheme (SPN) launched by the federal government on July 22 by partnering with the private sector in Sabah, giving its youths the opportunity to reskill, upskill and cross-skill besides securing a job after completion of the apprenticeship.

2. The ministry could also modify the MyBelia System launched by the federal government which could indicate job opportunities, skills training, funds and facilities provided by the state government, with the Sabah Youth Council leading the initiative by mobilising local youth organisations to inform Sabahan youths.

3. The same ministry in Sabah could also provide vehicles for unemployed Sabahan youths to venture into mobile truck business, thereby sustaining their livelihood and boosting youth entrepreneurship in Sabah.

4. The Sabah rural development ministry could continue implementing the Mesej (Mini Estet Sejahtera) Project, creating more sustainable agricultural development projects such as one kampung, one industry to generate income among Sabahan youths based in rural areas.

5. The ministries of industrial development, rural development, tourism, culture and environment, and agriculture and fisheries could organise a joint meeting and utilise natural resources to the advantage of the state to create more green jobs for the benefits of its youths. These ministries also could collaborate with industry players so that the skillsets among Sabahan youths would match current industry needs.

If the state government is attentive to the long-standing issue of youth unemployment, more job opportunities could be created thereby empowering more than half of the youth population in the state. They would not be marginalised but would in turn generate socio-economic development for Sabah.

Amanda Yeo is a research analyst at independent think tank EMIR Research.

The views expressed in this article are those of the author(s) and do not necessarily reflect the position of MalaysiaNow.