PROJECT REPORT: MALAYSIA

AKANKSHA SHARMA
BHARTI MATHANKER
VAISHNAVI SINGH

Environmental Economics | 3rd May, 2024

INTRODUCTION
Sustainable development, an increasingly pertinent concept, refers to the practice of
fulfilling current societal needs without compromising the ability for forthcoming
generations to satisfy their requirements. In light of escalating concerns pertaining to
climatic alterations, environmental degradation, and the diminution of natural resources,
the significance of sustainability has surged considerably. It is imperative for
governments, corporations, and individuals to embrace sustainable methodologies to
alleviate these impediments and secure an improved future for the populace.

Within the Malaysian ambit, sustainability has attained pronounced focus as the nation
contends with a swiftly burgeoning economy, urbanization, and industrialization.
Acknowledging the salience of sustainable practices, Malaysia has executed substantial
measures in formulating policies and initiatives aimed at fostering environmental
preservation, resource efficiency, and social equity.

Adhering to the Sustainable Development Goals promulgated by the United Nations, the
Malaysian government has lucidly delineated its commitment to surmounting
sustainability challenges. This paradigm operates as a conduit through which Malaysia
endeavours to harmonize economic advancement with conservation and societal progress.
Furthermore, the country underscores sustainable agriculture, renewable energy, and the
safeguarding of its copious biodiversity as pivotal components of its strategy.

Moreover, Malaysia is proactively addressing the environmental quandaries that

accompany rapid industrial and urban expansion. Initiatives enhancing waste disposal
practices, curtailing carbon emissions, and preserving natural ecosystems are
quintessential to the nation's sustainability endeavours.

SUSTAINABLE DEVELOPMENT GOALS AND KEY IDEAS OF A SUSTAINABLE

ECONOMY

In 2015, the United Nations General Assembly adopted the 17 Sustainable Development
Goals as a universal call to action aimed at ending poverty, safeguarding the planet, and
ensuring prosperity for all as part of a new sustainable development agenda. Each goal
has specific targets to be achieved over the next 15 years, creating a global framework for
nations to collaboratively address the most pressing global challenges. The SDGs are a
comprehensive blueprint tailored to address the multifaceted dimensions of sustainable
development, synergistically targeting the areas of economic growth, social inclusion,
and environmental protection.
In the wake of these SDG’s, several key ideas of a sustainable economy were
pronounced:

 Resource Efficiency: Echoing the ideals of SDG 12, resource efficiency stands as
a vital tenet of sustainable growth. The adoption of a circular economy, where
resources are maximized and waste is minimized, is fundamental to responsible
consumption and production.
 Renewable Energy: In alignment with SDG 7, the shift towards renewable
energy sources is central to reducing reliance on fossil fuels and curbing carbon
emissions. This transition is core to achieving affordable and clean energy for all.
 Environmental Stewardship: Reflecting SDG 15's vision, environmental
preservation is crucial for economic and ecological stability. The commitment to
safeguarding biodiversity and ecosystems ensures the longevity of our planet's
resources which, in turn, supports sustainable development.
 Inclusive, Sustainable Infrastructure Development: As put forth by SDG 9, the
development of sustainable infrastructures such as transport, irrigation, and green
spaces facilitates innovation, bolsters economic growth, and enhances societal
well-being.
 Economic Diversification: In the spirit of SDG 8, diversification of economies
aids in fostering sustained, inclusive, and sustainable economic progress. It allows
for the cultivation of resilience against economic shocks and stresses the
importance of sustainable practices across various industries.
 Social Inclusivity and Equity: Upholding the ambition of SDG 10, fostering a
socially inclusive environment is imperative. A sustainable economy must create
policies that promote equity, provide equal opportunities, and reduce inequalities
within and among countries

The interconnectedness and mutual reinforcement of these important ideas with the
Sustainable Development Goals paves the way for economies around the world to seek
economically viable, socially responsible, and environmentally sound development. This
collaboration will move nations towards a more resilient and sustainable future.

UNSUSTAINABLE PRACTICES IN MALAYSIA

Malaysia is classified as a middle-income country. In recent years, Malaysia has been
transformed from an agro-based economy to a manufacturing economy. Malaysia is the
fastest growing economies amongst ASEAN countries. This rapid growth rate is
attributed mainly in the ability to exploit the very environmental resource base available
for the country. The early European Colonialists who came over to Malaysia driven to
vigorously exploit the country rich environmental resource base and the exploitation
trend continues after the country independence till today.

Government programs to develop and promote investment in the key sectors of

agriculture, manufacturing, and services will need to be dealt with in a holistic manner.
Environmental resources exploitation are important generators of economic growth but
since the colonial periods environmental resources exploitation also have led to a
steady increase in environmental degradation. Environmental degradation issues are
becoming more intense and frequent in the last half decade or so not only in Malaysia
but for the Southeast Asia Region as a whole. Environmental degradation would impact
on the country societal wellbeing and quality of life. The last half decade also witnesses
the emerging importance of trans boundary issues which further impact the well-
being and quality of life in Malaysia. Consequently, given the major issues/challenges
that the world faces today it directly and indirectly associates the sustainable
development in Malaysia.

Malaysia’s wealth of natural resources has been indispensable to its economic growth,
but this growth has come at significant human and environmental cost. Although the
Southeast Asian nation met all eight of the UN’s Millennium Development Goals
(MDGs) before the 2015 deadline, Prime Minister Najib Razak has admitted that the
MDGs “fell short” of achieving truly sustainable development.

The increasing population in developing countries, particularly urban areas, has led to a
rise in solid waste generation, making it a significant challenge for developing countries
like Malaysia. The Malaysian government has successfully managed household solid
waste, with Kuala Lumpur producing 3,500 tons of domestic and industrial waste daily,
with 50% being organic waste. The global waste generation rate is expected to increase
by 6% annually, reaching 518 million tons in 2008 and 585 million tons in 2010.
Malaysia faces challenges such as weak enforcement, lack of technology, ineffective
policies, and inadequate monitoring and implementation.
Malaysia, with a total area of 329,750 km2, has a population of 25.5 million, with a per
capital GDP of $14,400. The urban population generates more organic waste than the
rural population, with the urban population comprising over 65% of the total population.
Municipal solid waste generation in Malaysia has increased by over 91% over the past
decade, largely due to rapid urban development, increased per-capita income, rural-urban
migration, and consumption patterns. Organic waste, which comprises over 40% of the
total waste stream, is dominated by this issue. The Malaysian Food Regulations Act
(1985) introduced hygienic packaging materials, leading to an increase in organic waste.
In 2007, organic waste contributed approximately 46%, followed by paper waste (14%)
and plastic-based waste (15%).

PALM OIL PRODUCTION

Forest clearance for palm oil production has been an important engine of Malaysia’s
economic growth. According to The Wall Street Journal, Malaysia exports around $12
billion of palm oil per year, 40 percent of the world’s supply. But the palm oil industry is
notorious for dangerous conditions and abusive labor practices that exploit a largely
migrant workforce. (Felda, a semi-government agency that oversees Malaysia’s oil
production, estimates that foreigners make up 85 percent of the workforce in this sector.)
Migrant palm oil workers told the Wall Street Journal that they were paid less than
minimum wage of RM 900 ($240) per month, that their paychecks were subject to
arbitrary deductions by their employers, or that they were not paid at all. Many are
exposed to toxic herbicides and perform physically dangerous jobs with no safety
equipment. Reforming the palm oil industry to comply with human rights standards is a
challenge Malaysia will need to meet to achieve the SDGs.
Palm oil production has had another environmental cost: haze. In 2013, the Air Pollutant
Index (API) in several Malaysian states reached hazardous levels due to airborne haze.
API readings in the state of Johor reached 746, among the worst in Malaysia’s history.
Any API reading above 301 is considered hazardous. Other states such as Penang, Perak,
and Malacca also saw readings spike. The haze, which was caused by harmful slash and
burn land clearance, was initially attributed to Indonesia, but Malaysian companies are
also complicit. Roughly 25 percent of the palm oil companies that clear land in
Indonesia are Malaysian. Malaysia’s extensive investment in Indonesia stems from
a 1997 investment treaty, in which Indonesia allocated 1.5 million hectares of land for
palm oil development.

ILLEGAL LOGGING
Malaysia has also come under scrutiny for its handling of illegal logging, both
domestically and abroad. While logging is a huge source of revenue for the country, the
network of illegal logging firms is large and complex, and major enforcement efforts are
required to tackle it.
There has been some effort to curb illegal logging, mainly in Sarawak, one of the states
richest in natural resources. Recently, Sarawak Chief Minister Tan Sri Adenan Satem
launched a campaign called “Ops Gergaji” to crack down on illegal logging, raising
fines to RM 1 million. But because legal logging is highly profitable, it is also highly
susceptible to corrupt activities. Ostensibly legal logging has been dogged by corruption
and lack of transparency in the granting of logging concessions and the enforcement of
regulations. According to Transparency International Malaysia, Malaysia loses RM 800
to 900 million in timber every year to illegal logging and corruption. To curb these
losses, the Malaysian Anti-Corruption Commission has frozen the accounts of 400
companies suspected of illegal logging, bribery, and tax evasion.
Malaysia’s wealth of natural resources has been essential to its economic growth; it
cannot allow that growth to become a curse. Malaysia has been slow to develop proposals
to combat forest clearance haze, and it has been called slow to address illegal logging.
The health, safety, and human rights of migrant workers in the palm oil industry remain a
problem. The central challenge for Malaysia as it faces the SDG era will be to find a path
to growth that does not sacrifice the health and welfare of individuals and the
environment.
The reliance on fossil fuels for energy and transportation has contributed to Malaysia's
carbon footprint. The nation ranks 30th in the world in terms of carbon emission levels,
illustrating its historical contribution to greenhouse gas emissions.

ENERGY SUBSIDIES
Malaysia has historically provided significant subsidies for fossil fuel consumption,
which have had both positive and negative impacts on the economy and the environment.
While these subsidies have supported economic growth and made energy more affordable
for citizens, they have also discouraged investment in renewable energy sources and
perpetuated the unsustainable consumption of non-renewable energy.
According to the International Energy Agency (IEA), in 2011, Malaysia had the third-
highest fossil fuel subsidies per capita among 12 economies in the Asia-Pacific Economic
Cooperation (APEC) forum. These subsidies have amounted to substantial costs, with
PETRONAS alone paying over MYR160 billion (US$51 billion) since 1997 to subsidize
the power sector in Malaysia, including privately owned power producers, and various
sectors like commercial, residential, and transport. In 2012, the cost to subsidize gas
alone was estimated to be MYR28 billion (US$8.9 billion)

The subsidies for fossil fuels have created distortions in the energy market, making non-
renewable energy sources artificially cheap compared to renewable alternatives. This has
hindered the development and competitiveness of renewable energy technologies in
Malaysia. Additionally, by increasing the demand for fossil fuels, these subsidies have
perpetuated the unsustainable consumption of non-renewable energy resources,
contributing to environmental degradation and climate change.

In conclusion, Malaysia's economic growth has been significant, but it has come at a cost
to the environment and society. From the exploitation of natural resources to the reliance
on fossil fuels and issues like illegal logging and labor exploitation in industries such as
palm oil production, unsustainable practices have posed significant challenges.
Addressing these issues is imperative for Malaysia to ensure a more sustainable and
equitable future for its citizens and the environment.