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Malaysia: Facing the Challenges of Sustainable Development

October 7, 2015

By Amanda Yeoh

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.

A hazy Kuala Lumpur

A hazy Kuala Lumpur. In 2013, the Air Pollutant Index (API) in several Malaysian states reached hazardous levels due to airborne haze. Photo/Flickr user ThisParticularGreg

With the arrival of the Sustainable Development Goals (SDGs), comprising 17 environmental, economic, and social objectives, Malaysia has made several official commitments to sustainable development. It has pledged a 40 percent reduction in carbon emissions per unit of gross domestic product by 2020, while reiterating its commitment at the Rio Summit in 1992 to keep at least 50 percent of the nation’s landmass under forest cover. Building on its reputation as an exporter of solar products, Malaysia also aspires to become the hub of green technology in Southeast Asia. It is leading the manufacturing and marketing of electric vehicles in the region. In May, the Kedah-based company, Amber Dual Sdn. Bhd, formed a joint venture with the Beijing Auto International Corporation to begin production of electric vehicles in July 2016.

These official commitments are steps in the right direction, but they gloss over two contentious issues, palm oil production and illegal logging, where Malaysia has drawn heavy criticism for poor development planning, weak environmental regulation, and human rights violations. In striving to achieve the SDGs, Malaysia will need to factor these issues into its strategy.

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.

Amanda Yeoh just completed an internship with The Asia Foundation’s Asian Approaches to Development Cooperation program in Malaysia. She is currently studying at Wesleyan and can be reached at [email protected]. The views and opinions expressed here are those of the author, not those of The Asia Foundation.


  1. Basically, the Malaysian government only counts land that has “complete canopy removal” as being deforested. To add to this already generous classification, many of their reports also include palm oil as canopy cover. The idea that 50% of their land has remained untouched is laughable. Using satellite images, it has been documented that at least 90% of Sarawak (Malaysia’s largest state) has been partially or fully deforested. The Sarawak government only reports about 30% deforestation because of their lenient definitions. This is not promising for the actually conditions of Malaysia.

    The problem is that outside researches and NGOs must get government permits to conduct their own assessments. If these groups report findings the government and timber barons don’t like, they will have permits revoked and can be kicked from the country. There is a massive understatement from Malaysia’s government on the extent of environmental losses. Unfortunately they keep tight control on the measurement standards and reporting.

    For background information: I worked for 2 years as an environmental consultant in Malaysia. I have first hand experience seeing funged numbers reported and being asked to change reports to make them sound better.

    • Hi David,

      Really appreciate your personal perspective. Would you mind sharing more? I’m doing a research about sustainability in Malaysia.
      My email is [email protected]. Hope to be able to be in touch with you.

  2. Hi,
    Do you have any update on the status or achievement of their commitment to SDGs?

    Although officials have commitments to sustainable development. The health, safety and human rights remain an outstanding issue to date.

    We’re aware that sustainable development is very complex and multi-domain issue. Malaysian government should make lots of efforts to improve and overcome the issue. Nonetheless, they keys to tackle the issue are good governance and proper education to people as early as their childhood age.

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