Climate and demographic foresight report launched, ahead of 13th Malaysia Plan formulation

Respondents call for government to take a leading role in enabling a ‘just transition’, highlighting importance of policy and regulation, alongside capacity building and business incentives

July 30, 2024

a group of people standing in front of a sign

Kuala Lumpur, 30 July 2024: The United Nations Development Programme (UNDP) and Malaysian Industry-Government Group for High Technology (MIGHT) today launched the jointly developed foresight report, “Transitioning Futures, Anticipating Change: Socio-economic Futures of Malaysia’s Climate and Demographic Transition”.

a group of people posing for the camera — From left to right: Mustapa Mohamed (Tok Pa), Manon Bernier, Niloy Banerjee and Rushdi Abdul Rahim showing the foresight report.

UNDP Malaysia

The foresight report highlights the intersection between two megatrends — climate change and Malaysia’s changing demographic — and maps out the future implications of these shifts on socioeconomic areas: firstly, the nation’s economic structures, labour market, and fiscal space; and secondly, the well-being of the elderly and their families.

As an ageing nation, the segment of population aged 65 years old and above is projected to double by 2040. Slower population growth and the shrinking relative size of the working-age population is concurrently expected to account for a third of the decline in headline GDP growth by 2050.

At the same time, the country faces climate challenges. Erratic rainfall patterns continue to impact Malaysia’s agriculture and water supply, while rising sea levels threaten Malaysia’s 4,675km coastline with coastal erosion, flood and saltwater intrusion. Due to global warming and the vulnerability of unhealthy and ageing workers, labour productivity in Malaysia could fall by 25% by 2045.

These shifts are expected to impact demands on families, social protection, and government and private sector services. Both climate and demographic changes will place fiscal pressures on government and households, forcing difficult prioritisation choices.

“Climate change and demographic change are interrelated, yet these are rarely addressed together. As Malaysia prepares to formulate the 13th Malaysian Plan, it is essential to future-proof our policies and legislations against potential socio-economic challenges. Hence, this foresight report is a timely evaluation of our governance and institutional readiness, as these converging trends will require proactive, risk- informed measures for the long-term planning of the nation,” said Niloy Banerjee, Resident Representative of UNDP Malaysia, Singapore, and Brunei Darussalam.

a group of people looking at a screen — Niloy Banerjee (left) giving an opening remark; Wan Nurul Hanani (top right) giving a brief presentation of the report, the official launch of the report (bottom right).

UNDP Malaysia

“This collaborative effort between MIGHT and UNDP Malaysia has heralded a report on a more adaptive and prepared nation. It serves as a platform for ongoing exploration, engagement, and action to shape a better future where Malaysia can thrive in the face of evolving challenges. We call upon all stakeholders to heed this report’s findings, engage in constructive dialogues, and take tangible steps towards a more resilient Malaysia,” said Rushdi Abdul Rahim, President and Chief Executive Officer of MIGHT.

Based on the assessment of 49 legislative acts and 61 national policies covering 486 strategies, the foresight report revealed that Malaysia has demonstrated a proactive legislative framework that evolves with the nation’s changing needs. However, there are critical gaps that need to be addressed, such as the development of climate resilient infrastructures and sustainable long-term care models.

a group of people that are talking to each other — Dr. Alizan moderating a panel session with Dr. Hezri Adnan (left), Lee Hwok-Aun and Raudhah Nazran (top right) and Tan Sri Zakri Abdul Hamid (bottom right).

UNDP Malaysia

The research further reveals that integrated policies and cross-sectoral efforts are required to withstand future socio-economic implications, such as ensuring competitive salaries and wages, and providing robust support for retirement schemes. Overall, the report identified three future scenarios emerging from the confluence of climate and demographic shifts, and six future implications.

The launch serves as the commencing point of the national engagement on the foresight report, with the aim of supporting stronger public-private collaboration to understand, anticipate and respond to the future. By exploring the confluence of trends from the perspectives of livelihood and liveability, the foresight report aims to enable proactive solutions to meet future healthcare demands, disaster reduction and recovery, and other effects of climate and demographic shifts.