A major new item broke recently with little public comment: the population of a couple of key Malaysian cities is declining while the national population is plateauing. This trend will have a profound impact on development planning.
The Department of Statistics tells us that the total population of Malaysia in 2022 inched up to 32.7 million from 32.6 million in 2021, for an annual population growth of only 0.2%. It pins the blame for the decline in population growth rate on the “the lower number of non-citizens from 2.6 million (2021) to 2.4 million (2022)”.
That masks the key factor behind this falling growth rate: the total fertility rate in Malaysia has plunged from 6.7 births per woman in her lifetime in 1957 to just 1.7 in 2021 – below the population replacement rate of 2.1.
Penang’s population actually slid from 1.7404 million in 2020 to 1.74 million in 2021 and was expected to shrink by 0.1% to 1.7386 million in 2022. That is not surprising given that the fertility rate for the state has been falling over the years to now only 1.3 – a drop that is even more pronounced than the national rates.
This means it is unlikely that the Penang population will soar to meet an earlier inflated population estimate of 2.45 million by 2030, including 300,000 expected to settle on three artificial islands off southern Penang Island.
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In 2017 reports said the population forecast for the three islands was 367,000. (This was calculated by estimating that 111,327 houses would be built on the three islands, and the average household size in each house would be 3.3 by 2030.) And then in 2019, apparently in item no 6 of an 18-point “advice”, the projected population for the three islands was said to be 446,300.
The greatest shrinkage (-0.5%) in Penang last year was in the northeast district of Penang Island – which has the highest housing prices in the state – while the highest population growth (+1.4%) region was in the southern district of mainland Penang, where housing prices are much lower.
In fact, more people live on mainland Penang, which has 947,400 people, than on Penang Island, which has 791,200 people, down from 794,313 in 2020. This 791,200 is well short of the draft Penang Island local plan’s projection of 1.033 million by 2030.
This means the draft local plan is assuming a 31% jump in population over the next eight years – despite the low fertility rate. How realistic is this?
So where are these additional people coming from? Are developers hoping to lure foreign retirees from China and the West to fill up empty high-end condos? (Two of those three planned artificial islands in southern Penang Island appear to be aimed at the wealthy.)
Why is the state planning for thousands of acres of additional land reclamation in its draft Penang Island local plan and for the rezoning of the Penang Turf Club land for high-density ‘mixed development’? Is this really a local plan or a developers’ plan for wealthy foreign property buyers?
If it is the latter, be up front and say so. That would assume the state can find enough foreign retirees to meet the more stringent MM2H eligibility criteria, such as having an offshore income of at least RM40,000 per month, a fixed deposit of RM1m, and liquid assets worth at least RM1.5m.
Remember, even from the 1990s, covering the economic boom period of the mid-1990s, Penang only experienced an average net migration inflow of below 10,000 persons per year – so we should not expect inward migration to have a major impact on the future population size.
Profound implications
The declining fertility rates and almost stagnant population have profound implications for housing, education, healthcare, mobility planning and elderly care as the population ages at both the national and state levels. The old economic growth paradigm of unlimited growth is no longer suitable. We now have to consider our level of carbon emissions in view of climate change and the limits to economic growth, especially the finite supply of resources.
A stagnant or barely rising urban population would mean we are unlikely to need even more mega-highways and expensive condominiums in urban centres. Far better to improve bus transport and encourage more people to switch from cars to buses. A commendable start is the new cross-channel bus service from Bukit Mertajam on mainland Penang to Komtar on the island.
At present, even existing high-end tower blocks in several developed states are not fully occupied. Johor, Penang and Selangor each has a glut (overhang) of about 5,000 to 6,000 homes.
Why is there such a glut? One of the main issues raised by many in the last general election was the lack of affordable and accessible housing. So if there is an overhang, it simply means developers are building homes that are too expensive or in unsuitable locations for most people. Even if the population is not rising by much, many still need genuinely affordable homes. So why should local governments plan for more expensive housing?
Meanwhile, the last census in 2020 revealed that the average size of families in Malaysia has shrunk to 3.8 per household from 4.2 in 2010, even though the number of households rose from 6.4 million to 8.4 million.
This rise in households is probably due to rural-urban migration. Some 75.1% of the people now live in urban areas compared to 70.9% in 2010.
The decline in the average number of people in each household could be due to young adults moving to the cities or abroad, leaving their parents and siblings in smaller households in their hometowns. Why, many houses and apartments across the country are either single-occupancy homes or even vacant, and some schools face declining enrolments that threaten their existence.
Despite the higher number of households in the country, the population of Kuala Lumpur has also shrunk by 1%. Perhaps, like in Penang, people are also finding city housing expensive and are moving to the suburbs?
Why is the population shrinking?
Women, Family and Community Development Ministry secretary general Maziah Che Yusoff said the main factors for the decline in the population were “delayed marriage which causes the reproductive period to be shorter, tendency to have a small family for various reasons such as financial capability and infertility problems due to health reasons”.
But what is squeezing adults’ financial capability and what is causing “infertility problems”?
For the former, most likely, adults are being financially squeezed by higher property prices, higher private vehicle costs, higher food prices and higher costs for quality education and healthcare. And so they put off marriage to later and then decide to have fewer children as they simply cannot cope with the higher cost of living with wages that cannot keep up.
So the government should build more affordable homes, encourage house owners to rent out unoccupied property, improve public transport, raise the standard of public hospitals and national schools, and increase food self-sufficiency so we do not have to rely on more expensive food imports. This way, we could reduce the financial burden on young adults and couples.
As for “infertility problems due to health reasons”, this requires more in-depth research to pinpoint what exactly is causing such problems. Is it due to unhealthy lifestyles – or something else, and if so, what?
Examine economic model
With the country’s population barely rising, the time is ripe to re-examine our economic model, to reduce large inequalities and to make development more sustainable.
Shouldn’t we be promoting sustainable mobility and promoting first and last-mile connectivity rather than building mega-highways in urban areas?
Shouldn’t we be revamping our bus systems to encourage more people to leave their cars at home instead of building expensive elevated light rail train lines?
Should we be carrying out more and more land reclamation for high-end condominiums when existing condos are still empty and when many are unable to afford expensive homes?
Shouldn’t we be focusing on improving existing schools and hospitals, providing elderly care in cities and upgrading healthcare and educational accessibility in rural areas?
Wouldn’t we be better off promoting the rural economy and empowering entrepreneurs in those areas in order to stem rural-urban migration?
Shouldn’t we be raising local food self-sufficiency to strengthen food security instead of rezoning even more agricultural land to “mixed development” (often a euphemism for high-density property development)?
Shouldn’t we focus on creating a circular economy and a more sustainable economic model instead of building more and more infrastructure of the wrong kind, given that our population is only inching up.
Not anti-development
NGOs, activists and critics who question our development model have often been accused of being ‘anti-development’ or of living in the past.
This is not true. What we are criticising is the model of development that pushes for ‘growth’ in areas that actually hurt the people or the community.
We are not against all development. We are against the wrong kind of ‘development’, the wrong kind of infrastructure. The development we seek is genuine human development that is practical, sustainable and benefits everyone – including those in remote areas and in low-income households – while protecting nature.
Private sector investments seek to maximise profit and the return on investment (often without considering the ecological impact). But governments have a responsibility to the ordinary people and should not be driven by profits. All levels of government must focus on the common good: the development model must be inclusive and sustainable. The infrastructure projects chosen must benefit the people and help boost productivity without harming the ecosystem.
Unfortunately, this is something that many in government and in certain groups cannot seem to understand – or choose not to. Sometimes unsustainable mega-projects are selected, driven by crony interests – rather than the people’s real needs.
So, let’s re-evaluate our development model and improve and maximise the use of existing infrastructure. Let’s focus our limited financial and natural resources on infrastructure projects that will truly benefit everyone.
The old days of “build and they will come” are over.
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