KUALA LUMPUR, July 30 — In 2022, Malaysia crossed the ageing threshold with 7.2 per cent of its population aged 65 and above, and this figure is projected to nearly double to 15 per cent by 2040.

At the same time, Malaysia faces climate volatility, with extreme heatwaves in April raising temperatures to between 35 and 40 degrees Celsius, and frequent storms causing significant flooding.

Losses incurred from flooding and extreme heat have reached billions of ringgit.

Today, the United Nations Development Programmes (UNDP) in collaboration with the Malaysian Industry-Government Group of High Technology (MIGHT), released its “foresight” report of its joint-study into how the two phenomena intersect and its impact on Malaysians.

Below, Malay Mail explains the report and why it matters:

How is climate change and ageing linked?

UNDP and MIGHT analysts said ageing will have obvious social and economic consequences.

Socially, the number of dependent people for every economically active Malaysian has risen to 1.6, which leads to a shrinking workforce, including in critical sectors like health and education.

Because of that, there is a rising need for a developed care economy, which the report noted is still far below what is inadequate in Malaysia.

As Putrajaya is forced to come to terms with its ageing population, social welfare and healthcare spending will increase and this could put pressure on the government’s coffers.

There is concern that this constraint could reduce not only Malaysia’s global competitiveness, but also its ability to fund projects that could mitigate or reduce the effects of a worsening climate.

Next, unpredictable weather patterns will disrupt global food system.

Combined with the pressure of modifying supply chains to become more climate-friendly, the rising cost of food will put additional pressure on the government’s spending power, which could have ripple effects on food subsidies and on the pensions and retirement savings of the elderly.

“Climate and demographic change are interrelated, yet these are rarely addressed together,” said Niloy Banerjee, resident representative of UNDP Malaysia.

“As Malaysia prepares to formulate the 13th Malaysian Plan, it’s essential to future-proof our policies and legislation against potential socio-economic challenges... these converging trends will require proactive, risk-informed measures for the long-term planning of the nation.”

What can we do?

The UNDP-MIGHT study said there are eight key areas that could make or break Malaysia’s preparedness to face the fallout from climate change and its ageing population:

How good policymakers address these metrics can determine our preparedness to coexist with a worsening climate and a shrinking labour force, analysts said.

But while the Malaysian government has “demonstrated proactive legislative framework that evolves with the nation’s changing needs”, they stressed there are still “critical gaps” that need to be addressed.

This included the need to beef up social protection, improve salaries and legal empowerment for a predominantly underpaid workforce and more political will to accept Malaysia’s climate and fiscal problems, and take bold steps to rectify them.

What happens if we fail?

The report outlined three possible scenarios — a just, shock or failed transition.

A failed transition: This means policymakers will likely only react with stopgap measures after a crisis arrives.

For this to happen, Malaysia faces a scenario of tough governance challenges, resulting in an inept and dysfunctional system, while lack of coherent leadership and political stability will also impede effective action

A failed transition would result in reactive, inadequate measures, worsening healthcare access, and a growing disparity in pay and healthcare affordability.

The poor will mostly be left out of the healthcare system that will become more exclusively affordable for the rich because government spending is to strained by climate and retirement care funding.

A shock transition: Social safety nets and welfare programmes are prominent but only reactive. Malaysia might grapple with healthcare challenges post-crisis.

It will be resource-constrained and reactive measures will lead to limited healthcare access. Emergency healthcare services are overwhelmed, causing delays and limitations.

These are symptoms that are already showing today. For workers, Malaysia could force mandatory reskilling and upskilling for the ageing workforce, redirecting them to green jobs in renewable energy and eco-friendly sectors.

A just transition: This can only be achieved if Malaysia demonstrates “visionary governance and leadership in climate and demographic action at all levels”, the report said.

As a result, the country will boast a healthcare system accessible to all citizens, and advanced technologies and innovative solutions ensure equal healthcare access.

For workers, this means a more progressive labour market with a focus on green jobs to face climate and demographic changes.

And because of good sustainable-oriented governance, Malaysia could have advanced infrastructure protects against climate-related hazards because sustainable practices and robust policies would have reduced vulnerabilities.

https://www.malaymail.com/news/malaysia/2024/07/30/undp-might-report-how-the-combined-effects-of-climate-change-and-an-ageing-population-will-affect-us/145479