Ensuring growth to ensure sustainability

 (First published in the Penang Monthly’s March 2013 issue)

Photograph: My Train Pix / Flickr

While Singapore’s government tries to convince its citizens of the wisdom of its population plans, Malaysia suffers instead from the lack of a long-term and comprehensive vision that is supported by concrete measures to ensure sustainable growth.

By Tricia Yeoh

The Singapore government recently faced public outcry following the release of a white paper on its country’s projected population growth rate. The paper forecasts a population size of 6.9 million people by 2030, which has alarmed local Singaporeans; foreign migrants currently already account for almost 1.5 million out of the 5.3 million residents, who take up jobs previously occupied by locals. (The latter is an arguable point though.)

Among the major concerns expressed online is that there are insufficient resources and infrastructure to cater to this rapid growth – already there are complaints of overcrowded public transport systems and hospitals. Although their government responded by saying it is merely a guide, this episode is certainly what other rapidly developing cities should take note of.

Drawing from our neighbour down south, the question for both Selangor and Penang (being two of the most industrial and commercial states in Malaysia) is: how should thriving, cosmopolitan cities and states plan for future population growth? One lesson to be learned from the Singapore example is that governments must engage in forward planning and targeted communication with their residents. This is to ensure sustainability of resources over a long-term period and to make sure the people are aware that such efforts are being made after serious consideration.

While it is important for hospitals, schools and public transportation systems to expand according to the needs of a growing populace, these are areas that unfortunately do not fall under the purview of state governments – and are therefore left to the federal ministries to plan, hopefully with input from and collaboration with their state counterparts.

Interestingly, contrary to popular belief, population growth rates in both Penang and Selangor have actually fallen in the last few years. In Penang, the average annual population growth rate has fallen from 1.6% in 2008 to 1.5% in 2009, 1.3% in 2010 and 1.1% in 2011. Similarly so for Selangor, the growth rate fell from 2.6% in 2008 to 2.5% in 2009, 2.2% in 2010 and 1.4% in 20111.

Be that as it may, the population size is growing. In the decade of 1991-2000, Selangor’s population increased by 75% from 2.4 million to 4.2 million. Between 2008 and 2011, the population increased from 1.5 million to 1.6 million in Penang, and from 5.2 million to 5.6 million in Selangor. It is also important to explore immigration into the states to understand the population makeup further.

Figure 1: Net migration by states, 2006-2009.
Source: Department of Statistics Malaysia.

In the period between 1995 and 2000, Selangor received a total of 371,000 net migrants, of whom 14% were foreigners. That state continued to receive the highest percentage of immigration from 2003 to 2007, mainly from the states of Kedah, Perak, KL and Kelantan. From 2008 to 2009, however, Penang was the main destination of migrants, which Figure 1 shows. The highest concentration of foreign migrants into Peninsular Malaysia was, however, in Selangor (15.7%), the highest percentages coming from Indonesia, India/ Pakistan/Bangladesh and the Philippines, with the majority working in the manufacturing and construction industries.

The labour force has also increased from 688,000 to 781,000 in Penang and from 2.2 million to 2.7 million in Selangor over the same four-year period, due to increasing labour force participation rates in both states. Added to this is the rising GDP growth rate in both states, going from 5.8% to 10% in Penang, and from 8.4% to 10.8% in Selangor between the years 2008 and 2010. Clearly resources, social amenities and infrastructures will need to match the increase in population size and the increasing industrialisation.

Sustainable water resources 
Singapore has done well in assuring its citizens of a self-sustaining water supply. Although this is a politically sore point in Malaysia (there is much history involved in the water and price negotiations, which this article will not explore), Singapore targets to eventually wean itself off Johor’s water supply by 2061, the year in which the final water agreement between the two countries expires.

This brings us to the primary issue at hand, namely ensuring sufficient water supplies for both Penang and Selangor respectively. In my previous column on the subject, I stated that the water industries of both states differ significantly. In short, Selangor’s water industry is fragmented into four separate private water concession companies (three in charge of water treatment and one for water distribution), whereas Penang’s is managed by a state corporatised body, the Perbadanan Bekalan Air Pulau Pinang, or PBAPP. While Penang has successfully negotiated its water restructuring deal with the federal government’s Perbadanan Aset Air Berhad, or PAAB, Selangor continues to struggle to achieve this.

Early last month, Penang’s Chief Minister called on PAAB to speed up the Perak-Penang water transfer project in order to provide for future water demands, as 80% of Penang’s water source is derived solely from the state’s Sungai Muda, which will meet water demand only up to 2020. This is a responsible statement, seeing as Penang itself has limited water resources, an issue exacerbated by the reported logging activities within Kedah water catchment areas which are likely to reduce these resources even further.

Readers may be quick to point out that Selangor on the other hand is reacting in an entirely opposite manner: namely through its inability to agree with PAAB on a final restructuring deal, and also refusing to approve the Langat 2 water treatment plant as part of the Pahang-Selangor water transfer project.

While it is necessary to cater to an increasing population growth in the future, the issue is not as simple as it seems in Selangor. Because of the fragmented nature of the water industry, the two main companies, Syabas (water distributor) and treatment company Puncak Niaga (which is the majority shareholder of Syabas), have refused to accept the buy-back offers of the Selangor government, causing a stalemate. Ideally, as part of the Water Services Industry Act 2006, this should have been resolved by now, by consolidating all companies into one, owned by the state government.

The federal government has not cooperated in the matter either, by recently providing yet another RM120mil in what seems like bailout funds to Syabas. This is on top of the RM320mil 20-year back-loaded, unsecured and interest-free loan to Syabas in 2009. One must recall that Syabas is a private entity, having signed a concession agreement to undertake its services and responsibilities, which it failed to do in a recent breakdown in the Wangsa Maju pump station, which resulted in water shortages affecting more than 27,000 households in the Klang Valley.

It is more urgent than ever that both governments work together to solve the water problem, on the principle that water companies such as Syabas should be dealt with strictly. Water regulator National Water Services Commission (Span) is the most well-suited to handle the matter. Of course it seems highly unlikely any chastisement will take place before the 13th general election that is soon to come – all parties are waiting to see how the power structures remain or change before major policy decisions are made.

Finally, while Penang requires water resources to be channelled from Perak owing to its limited resources, Selangor has not fully exhausted its existing water resources – its lakes and rivers and heavy rainfall exist in abundance. The mega-project to transfer water from Pahang to Selangor will cost in total some RM9bil (consisting of the dam, tunnel and treatment plant), compared to the Perak-Penang project of RM2bil. I have stated in other articles that this massive project should be reconsidered in preference to other solutions like upgrading existing plants, rainwater harvesting, water recycling and treatment of Selangor’s raw water resources. These would also ensure sufficient water for future generations in the Klang Valley.

Economic growth and development puts pressure on governments to manage the resulting consequences. As Singapore grapples with its exponential population growth, so too must the dynamic states of Selangor and Penang, by carefully studying similar projections over the mid to long-term future, given high immigration rates.

We must not reach a stage where residents feel the strain on infrastructure, amenities and resources. To that end, it is hoped that the Pakatan-led states maintain their governments in the upcoming state elections, and that government bodies like Pemandu, the Economic Planning Unit and Department of Statistics will work closely with the states.