Brendon Beliku is a corporate immigration and employment compliance professional based in Kota Kinabalu. He writes independently on Sabah’s economic governance, labour policy, regulatory affairs and Momogun empowerment.
KOTA KINABALU: Every conversation about labour in Sabah eventually collapses into the same two sentences.
Too many foreign workers, not enough skilled locals. Reduce dependency. Upskill the workforce.
It is a familiar narrative, and increasingly the wrong conversation for the generation now entering primary and secondary school, those born around 2010 who will enter Sabah’s labour market between approximately 2028 and 2032.
Sabah could reduce foreign labour dependency, produce record TVET numbers and improve employment statistics, yet still prepare a generation for labour market conditions that no longer exist, winning the labour war while quietly losing the relevance war.
*The Numbers Behind the 2010 Workforce*
The scale of this challenge is often understated. Sabah’s population reached approximately 3.76 million in the 2025 mid year estimates, and the state remains Malaysia’s youngest, with a median age of 27.2 years against a national median of 30.3, while 48.5 percent of its population is aged between 0 and 24, the demographic band the Class of 2010 belongs to.
That youth is an economic opportunity, but it also magnifies policy risk. Individuals aged 15 to 24 comprise 58.6 percent of all unemployed persons in Sabah, and youths account for 55.8 percent of total unemployment.
Nationally, youth unemployment stood at 10.1 percent in the third quarter of 2025, and approximately 35.5 percent of employed degree and diploma holders were classified as skill related underemployed.
*Winning Yesterday’s Labour Market*
The government deserves recognition for the progress achieved. TVET participation continues expanding, and foreign labour dependency is being progressively reduced, with the registered foreign workforce declining 13 percent to 2.13 million by October 2025, against national targets of 10 percent by 2030 and 5 percent by 2035.
Success today does not guarantee competitiveness tomorrow. The compliance layer has also tightened. Malaysia introduced a Labour Market Testing framework in 2023, requiring employers to advertise vacancies, now for 14 days, and submit a Hiring Outcome Report to the Social Security Organisation before an Employment Pass application proceeds, a genuine procedural advance that is also, by design, a headcount exercise rather than a measure of skill.
Taken together, unemployment down, TVET enrolment up, foreign dependency federally targeted downward, a pattern emerges, one where more than a third of graduates already work below their qualification level while Sabah’s youth carry a disproportionate share of joblessness.
The metrics that matter to the current governance model are moving in the right direction, which is precisely why they may be the wrong metrics to relax around.
*Relevance Is Becoming the New Competitiveness*
The dependency narrative is not wrong exactly, it is old news dressed as a plan.
Sabah and Sarawak run on their own lower levy schedule, and Sabah’s authority over immigration is a distinct constitutional arrangement under MA63, which grants the state control over the entry and residence of non Sabahans.
That autonomy explains why the federal script does not map cleanly onto Sabah, where industry groups have long lobbied for easier quotas, citing shortages instead of oversupply. It also sits inside a wider regional pattern.
Fragomen’s 2026 Worldwide Immigration Trends Report notes Malaysia among the jurisdictions flagged for intensified immigration audit activity, alongside the United Kingdom and Canada, part of a global Talent Mobility Index that rose from 42 to 44 out of 100 in a single year as minimum salary thresholds tightened in more than 40 countries.
Narrowing those terms is not the same as closing the relevance gap.
The federal government has begun to notice that distinction.
The Ministry of Human Resources has announced a policy, due for formal launch in 2026, requiring companies that hire foreign nationals for full time roles to also hire local students as interns, aimed at making young Malaysians workforce ready, a rare attempt to attach a relevance requirement to a dependency requirement rather than leaving the two apart.
Sabah’s own planning instruments still measure success the way most labour ministries do, headcount trained, certificates issued, unemployment falling a point at a time, which does not capture whether what is being trained for will still exist once this cohort graduates.
*Preparing for the Economy That Does Not Yet Exist*
Should current trends continue, the response cannot simply be more upskilling layered onto existing scaffolding.
It requires portable credentials that move across sectors, labour data that tracks real skill demand rather than annual headcount, and planning for a future where the best trained locals leave for better wages elsewhere while Sabah imports higher skilled expertise to fill the gap.
It also means treating tools like mandatory internship ratios as a starting point for genuine skills transfer, not a compliance box to tick, the same trap labour market testing has not fully escaped elsewhere in the region.
The 2010 cohort is not years away. The oldest are already in secondary school, and today’s planning decisions are the ones they will graduate into.
The risk is not that Sabah fails to reduce foreign labour dependency or bring unemployment down further. It is that the state succeeds, only to discover it optimised for a labour market that had already disappeared.
[Disclaimer]: The views, opinions and analyses expressed in this article are solely those of the author and do not necessarily reflect the views, policies or positions of the Jesselton Times, its editors, management or affiliated entities. This article is published for analytical and public discussion purposes and should not be construed as institutional commentary or endorsement.
