Page 68 - AEI Insights 2019 - Vol. 5, Issue 1

AEI Insights, Vol 5, Issue 1, 2019

lived in urban area and 73.4 percent in the countryside. Until 2015 the living situation has
turned in the opposite when nearly 75 percent of the Malaysians live in cities.

1995 2000 2005 2010 2015
Rural Population in percent of 45.3 38.0 33.4 29.1 25.3
total population
Urban Population in percent of 55.7 62.0 66.6 70.9 74.7
total population

Table 16: Rural and urban population in Malaysia, Source: World Bank Development Indicators
The population growth of Malaysia will produce significant changes in the ethnic composition
of the population in the next 50 years. The percentage of Malaysian Chinese and Malaysian
Indians is predicted to shrink as their birth rates are significantly lower than that of the Malay
Muslims. Their fertility has remained relatively high due to pro-natalist cultural values and to
some extent also the traditional role model of women as housewife and mothers in traditional
Islamic lifestyle. Additionally, the Malaysian government has offered financial incentives for
children of Malay Muslims as part of their Bumiputera policy, which is a kind of affirmative
action program for Malay Muslims.

The relations between the major ethnic groups are a very sensitive issue in Malaysian politics.
Particularly the Chinese community in Malaysia sees the expected demographic changes with
anxiety. The socio-economic and cultural milieu of the Chinese community (generally more
urban, wealthy and educated than other ethnic groups in Malaysia) is responsible for a faster
ageing of this population group than others. It is thus the Malaysian Chinese community that
will most probably “bear the impact of the many problems and issues associated with ageing
ahead of the Malays and Indians” (Chai/ Hamid 2015: 11).

Political and Social Problems of Population Change in Malaysia and Indonesia
Despite their country-specific and historic differences, the similarities between Indonesia and
Malaysia in terms of political demography are remarkable. Both countries witnessed an
extremely high population growth between the 1970s until around 1990. At least since then
both countries have enjoyed a relatively favourable demographic environment characterised by
a very high working age population, which was growing at a higher rate than the overall
population. Particularly Malaysia, but also Indonesia to a lesser extent, has been very
successful in translating this demographic window of opportunity into a sustained economic
growth path, poverty reduction and achievement in non-income dimensions (Nori 2017).

However, Malaysia and Indonesia are both now coming slowly at the end of their demographic
window of opportunity. After 2050, both countries are predicted to become “aged nations”,
which is defined when the post-working population (65 years and older) constitutes 14 percent
or more of the total population. Compared to other countries worldwide, the transformation
from a very young to an ageing society within a few generations is very fast.
The key drivers of Malaysia’s and Indonesia’s ageing population relate to longer life
expectancies and declining fertility rates. What were the reasons for this? Malaysia and
Indonesia have sustained a long period of consistent economic growth starting from the 1970s
which has led to improved living conditions, advances in medical science and contributed
positively to healthcare system. Meanwhile, new social norms relating to more Malaysian and
Indonesia women pursuing their education and career aspirations led to later marriage and less

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