By Amanda Yeo

Representing the majority of semi-skilled and low-skilled jobs, youth unemployment has been a prominent problem among the Malaysian youths, particularly severe in Sabah, which is known as the poorest Malaysian state – 19.5% poverty rate in 2019 – and also having the highest unemployment rate in the country – 5.8% in 2019.

Even before the emergence of the COVID-19 pandemic, Sabah recorded 14% youth unemployment rate in 2019. The daily three-digit COVID-19 infections and tightening of movement restrictions in Sabah would lead to more than 284,000 Sabahan youths to be unemployed, according to the Department of Statistics Malaysia (DOSM).

With the second wave of job retrenchment and shutdown 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 & quarrying sector. The closure of international borders and inter-state travel ban had resulted in a drastic drop in international and domestic tourists in Sabah.

Many shopping centers and F&B outlets are relatively empty as only take away and grocery service are allowed during this 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 put Sabahan youths into a bleak future.

Instead of purely relying on the service sector (46.1% of Sabah's GDP in 2019) and mining & quarrying sector (26.4% of Sabah's GDP in 2019), the state government should re-align their focus by developing the agriculture and manufacturing sectors. As of 2019, the contribution of the agriculture sector is 16.1% of the state's GDP, and 7.6% for the manufacturing sector.

To diversify the 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 the renewable sectors.

In addition, the Sabah state government could increase crop diversification and produce high quality agricultural product. Such effort could develop Sabah as an Asian food hub to fulfill huge demands from the major markets such as China, Singapore and Brunei.

To ensure sufficient timber supply, the Sabah state government could also increase the planting of suitable tree species on a large scale by extending Budget 2021's allocation of RM500m for the Forest Development Loan (PPLH) program for the timber industry. With increasing demand for the agricultural and wood-based products, job opportunities among Sabahan youths would be created.

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.

While generating higher value-added downstream processing activities in the state, Sabahan youths also be employed in these mega infrastructure projects in Sabah.

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

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

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

2. Increase youth involvement in high impact economic sectors such as agricultural, digital and cultural sector;

3. Organizing program 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 Youth Entrepreneurship Aspiration Program (YEAP) to enable young people to start their business with low start-up capital.

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

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

1. Ministry of Youth and Sports Sabah could modify the National Apprenticeship Scheme (SPN) that was launched by the federal government on July 22 by partnering with the private sector in Sabah where its youths would have the opportunity to reskill, upskill and cross-skill besides securing a job after completion of the apprenticeship;

2. Similarly, Ministry of Youth and Sports Sabah could also modify the MyBelia System launched by the federal government that could indicate job opportunities, skills training, funds and facilities provided by the state government, with the Sabah Youth Council leading this initiative by mobilizing local youth organizations 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. Ministry of Rural Development Sabah shall continue implementing 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; and

5. The ministries of industrial development, rural development, tourism, culture and environment, and agriculture and fisheries could organize a joint meeting and utilize natural resources 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 the current industry needs.

When the state government is attentive to long-standing youth unemployment issue, more job opportunities could be created, thereby empowering more than half of the youth population in the state. They would not be marginalized and in turn, generating socioeconomic development for Sabah.

(Amanda Yeo is Research Analyst at EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research.)