SABAH BRACES FOR POTENTIAL BRAIN DRAIN
Construction of Indonesia’s new administrative capital of Nusantara in Kalimantan may lead to workers seeking better opportunities there
SABAH may experience a brain drain, as well as a slowdown in several sectors with the construction of Indonesia’s new administrative capital of Nusantara in Kalimantan this year.
Sabah Universiti Teknologi Mara economist Dr Jain Yassin said the project could benefit Sabah’s economy through cross-border business, particularly in Tawau.
However, Sabah Federal Secretary Datuk Makhzan Mahyuddin said nearly 50 per cent of industries, especially plantations and construction, relied on foreign workers.
Jain said with Indonesia offering better opportunities and higher wages for both foreigners and locals, the state might face a further brain drain.
“The challenges for the Sabah government are to develop practical strategies to retain skilled workers, attract talent, and cultivate a skilled local workforce.
“Another critical consideration is the strain on existing infrastructure in Sabah due to an influx of people or goods between the regions or rapid population growth.
“This can lead to resource scarcity, driving up land and housing prices.”
Despite potential setbacks, Jain said fostering collaboration and partnerships with Kalimantan could create opportunities for mutually beneficial economic development initiatives and talent exchange programmes.
With an expected increase in trade due to improved crossborder connectivity, firms can benefit from economies of scale in transport.
“From a macro perspective, there will likely be growing demand for skilled workers across various sectors.
“This could lead to increased demand for vocational training programmes, technical certificates and higher education degrees from local or international individuals to meet workforce demands.
“I also anticipate significant expansion in the services sector. Demand for services such as hospitality, retail, healthcare, education, and administrative support may develop faster than other sectors.
“The (new capital) could promote economic diversification of Sebatik Island, located at the border, which is currently over-reliant on fisheries.
“Job opportunities may emerge in sectors such as trade, manufacturing, services, and tourism, providing alternative sources of income for local communities.”
However, Jain expressed concern that Sabah still grappled with unresolved basic infrastructure issues affecting its potential to obtain and expand opportunities to attract foreign investment.
“Initiatives to improve infrastructure connectivity and strengthen border and maritime security have been discussed extensively before.
“So, we should accelerate implementation and improvement and avoid politicised interventions that can hinder effective implementation and lead to delays.”