On lack of manpower for Sarawak’s renewable energy corridor

By Medecci Lineil

I would like to refer to several news reports on a severe lack of skilled manpower for Sarawak Corridor of Renewable Energy (Score). A few weeks ago, at an international conference, Chief Minister Tan Sri Adenan Satem said Sarawak needed 29,300 professionals and skilled workers in the field of mechanical engineering in the next five years to fuel the Score.

It is fairly easy to understand government intervention here. The government has resources and Score needs skills. Put the two together and you have a system designed to turn out of so called highly trained and globally competitive workforce.

This is a wonderful intervention by the government. Except, it is erroneous where it ignores the basic facts of the Score establishment and other forms of interventions. Let me explain why such efforts eventually fail.

First, Score is not a free market project. It is an ambitious Sarawak government project with extensive subsidies offered by the Federal Government. With artificial low interest rates and cheap money policy today, spending on renewable energy, highways, Mukah airport, schools, dams and bridges is an indirect way for government to create jobs. Also the political appeal of Score stems from the fact that the jobs created are very noticeable to the average voter and unemployed.

Unfortunately rarely does the public debate focus on how employment in other sectors in the state like palm oil plantation and furniture is affected when the government spending its program.

There is nothing wrong about job creation, it is understandable one. In free market capitalism a job is not an end, it is a mean to wealth creation. Because average voters and Sarawakians in general tend to think of jobs as the ends rather than the means, they are easily fooled into supporting government programs on grounds that jobs will be created, such as Score.

While it is true, in the short run, policies which seek to meet job demands beyond the market scope of buyers and sellers may help the labour market by putting people at work but in the long run, the result of such inflationary policies is to increase the economic problems of Sarawakians that is, high rates of inflation and cost of living.

Second, human capital. It includes things like character, knowledge, skills, creativity, health, imagination, interest and liberty. So investing in capital, in this case skilled worker such as Science and Technology, Engineering Mathematics education, training and development to relieve skilled labour shortages for example, will only divert resources from more important users and defeats its own ends.

It is impossible for government to remedy this situation. Government cannot manufacture an engineer. In my view, students enter science field for a blend of two reasons: love interest of the work, and salaries and job opportunities.

The government may accomplish creating more students of science and skilled workers for Score, who then find that because of the increased supply, the salaries are not only not raised – even lower compared to other fields. The result can only be to drive more and more skilled workers out of the field and to discourage any further students from taking advantage of the subsidised program.

The key here is a free market price system. If there is a shortage, it will be quickly revealed in higher salaries and these salaries will do all that is humanly possible to address the shortage rapidly.

Tulisan ini telah disiarkan di The Malaysian Insider pada 29 April 2014.

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