Malaysia is a high-middle-income country with a rapidly growing population. From 1960 to 2021, the national population has increased from 8.2 million to 33.57 million, an increase of 311.6% in 61 years, nearly twice the global growth rate over the same period. The population has long been concentrated on the west coast of the Malay Peninsula. The capital Kuala Lumpur and Penang are located in the central and northern parts of the west coast respectively, and are the economic, cultural and political centers of Malaysia.
The national population is mainly divided into three categories: Malays, Chinese and Indians. The Malays are the most numerous and politically influential group. The Chinese population accounts for about one-fifth of the Malaysian population, and most of them come from southeastern China, such as Guangdong, Guangxi, southern Fujian, northern Fujian and other regions, so the languages are quite diverse.
With Malaysia’s gradual industrialization and continuous increase in income, Malaysia’s population growth rate has also gradually slowed down. Growth in 2021 is the slowest in 61 years at 1.1%, down from 2.5% in 2000. Compared with other Southeast Asian economies, such as Thailand (0.2%), Indonesia (0.7%), and Vietnam (0.8%), the growth rate is still relatively high, but there is still the problem of population slowdown.
The root cause of the slowdown in Malaysia’s population growth is the decline in fertility. Although the reduction in fertility rate is a global trend, it is the case in countries such as the United Kingdom, the United States, Japan, Indonesia and Singapore. According to World Bank statistics, Malaysia’s fertility rate (TFR) has dropped from 6.7 births per woman in 1957 to a 40-year low of 1.7 births, which is lower than the world average of 2.3 . One reason for this is the increase in female education and labor force participation. In addition, factors such as increasing age at first marriage, urbanization, changes in lifestyle, economic status and use of family planning methods also contribute to the decline in fertility.
Another factor affecting population growth is that the number of international immigrants has declined in recent years, but immigration will still be an important support for Malaysia’s population growth. According to official estimates, between 2018 and 2020, Malaysia has accepted about 1.4 million to 2 million documented immigrants, making Malaysia one of the most immigrant-receiving countries in Southeast Asia. Citizens make up 92.6 percent of the population, while non-citizens make up 7.4 percent, according to official figures.
Malaysia’s annual population growth rate is expected to slow to 0.2% in 2022 due to a reduction in the number of non-citizens entering the country during the pandemic. According to a report by the National Bureau of Statistics, the number of foreigners accounting for 7.4% of the total population is estimated to drop from 2.6 million in 2021 to 2.4 million in 2022, which is the main reason for the decline in population growth.
Due to slowing population growth and rising proportion of elderly population, Malaysia will face the trend of rapid aging. In 2020, the proportion of Malaysia’s population over the age of 65 will reach 7%, which is in line with the definition of an aging society in the world. However, the employment rate for those aged 55 to 64 is only 45.2%, which is low in a higher-income economy. In particular, women aged 55 to 64 have lower employment rates. To combat the effects of aging, the government is encouraging more people to enter the labor force, especially Muslim women, and has proposed raising the retirement age from 60 to 65 or higher.
Despite the challenges posed by an aging population, Malaysia’s labor force participation rate is growing steadily, from 60% in 2010 to 65% in 2021 . According to the official statistics department, in the second quarter of 2022, Malaysia’s labor market is positively rising. As the impact of the epidemic is alleviated, economic activities are gradually normalizing and borders are reopening, the number of employed people continues to rise, reaching the highest ever figure of 1,570 million people.
The Chinese, who originally immigrated from southeastern China, have a more diverse language than the Malays, including several different Chinese languages: Hokkien, Hainanese (Hokkien), Cantonese, and Hakka are the most prominent. Since these languages are not mutually intelligible, it is common for two Chinese to communicate in common languages such as Chinese, English or Malay.
Between 2011 and 2021, the total fertility rate of all major ethnic groups in Malaysia will show a downward trend. Except for the Malays, the TFR was below the replacement rate for all ethnic groups. Malays had the highest TFR with 2.2 babies. Meanwhile, Chinese had the lowest TFR at 0.8 births per woman aged 15-49.
In terms of religion, Islam is the official religion in Malaysia, and about three-fifths of the population believes in Islam. Islam is one of the important factors that distinguish Malays from non-Malays, and by law all Malays are Muslims.
The Chinese do not have a mainstream religion. Many follow Confucian moral precepts and follow Buddhism or Taoism, and a few believe in different Christian sects. Most Indians and Sri Lankans are Hindu, while Pakistanis are mostly Muslim. A small number of Indians are Christians, while Sikhs originated in the Indian state of Punjab and mainly believe in their own religion, Sikhism.
Malaysia’s labor market has improved in recent years. According to the World Bank, Malaysia’s employment rate reached 68.4% in 2020, compared with 66% in 2013. Meanwhile, Malaysia’s unemployment rate has also been falling, from 3.5% in 2013 to 3.1% in 2018. The labor market is positively rising. As the impact of the epidemic eases, economic activities are gradually normalizing and borders are reopening, employment continues to rise, reaching an all-time high of 15.7 million in 2022.
Even though population growth is slowing down, Malaysia’s population growth is still high compared to other countries. Rapid economic expansion, accelerated urbanization, rising educational attainment and low female labor force participation (59 percent) also continue to create a high demand for immigrant workers in low-wage jobs. Migrant workers are vital to Malaysia’s labor market, especially in sectors such as construction, plantation, manufacturing and domestic services. As of June 2022, the Statistics Department has recorded 2.1 million foreigners working in various industries in Malaysia.
Migrant workers are ubiquitous in the labor market, yet their role in filling low-wage, manual labor demands is not universally accepted. Over the years, the government has set goals to control the number of immigrant workers and introduced related policies in order to reduce the reliance on migrant workers, such as in the ” Eleventh Malaysian Plan ” (The Eleventh Malaysian Plan) in 2016 , has proposed limiting the number of immigrant workers to 15% of the workforce.
However, changing the composition of the workforce has not been easy, with some employers complaining of labor shortages in certain industries as a result of stricter policies. Minister in the Prime Minister’s Department Mustapa Mohamed said that the country still needs about 15% of migrant workers, and the current number of migrant workers is close to this number.
Yet political and public opinion still routinely paint migrant workers as a potential threat to national security, detrimental to the country’s long-term social and economic development. For example, a large number of foreign workers may prevent companies from adopting automation and mechanization to move up the value chain; in addition, low-skilled foreign workers may also lead to an increase in illegal immigration due to the lack of effective enforcement and management mechanisms.
Malaysia is a federation of 13 states and three municipalities. There are many differences between different regions of the country. Kuala Lumpur, for example, is the largest city in Malaysia and the center of wealth and economic activity. In contrast, economic development in many other regions has been relatively slow.
Malaysia’s population is mainly concentrated on the west coast, which includes the states of Kuala Lumpur, Selangor and Johor. These areas are home to many large cities such as Kuala Lumpur, Johor Bahru and Tanjung City in Johor, and Kerama City in Selangor. These areas have a relatively high population density and are also the main commercial, financial and industrial centers of Malaysia. In contrast, the east coast of Malaysia is relatively less populated, including the states of Sabah and Sarawak. The economies of these regions are largely dependent on agriculture and fishing.
In addition, Malaysia’s geographical location will also affect the economic development of different regions. For example, areas close to Southeast Asia, such as Sabah and Sarawak, are more prominent in the development of agriculture and fisheries. On the other hand, the central regions of Malaysia, such as Johor and Selangor, are known for the development of manufacturing and oil processing industries.