Links to Biodiversity
Threats to Biological Diversity


ECONOMIC TRENDS Habitat loss or conversion and economic exploitation of natural resources have been the primary cause of biological diversity loss in Malaysia to date. However, ongoing structural changes in the Malaysian economy present an alternative scenario to biological diversity loss. The bigger threats to biological diversity are now more likely to be industrial pollution rather than habitat loss.

The three major areas of Malaysia, Peninsular Malaysia, Sabah and Sarawak are all at different stages along the transition from a commodity-based to an industry-based economy, as are the various states within Peninsular Malaysia. In the states of Sabah and Sarawak, conversion of additional large areas of forest to agriculture can be expected.

The most prominent structural change in Malaysia's economy, as discussed in previous chapters, has been the shift from a dependence on agricultural and other commodities to a growing reliance on manufacturing. The manufacturing sector overtook agriculture in terms of GDP share for the first time in 1987, signalling the explosion in economic growth that was to follow. Increased economic opportunities in the manufacturing sector are demonstrated in a trend of declining employment in the agricultural sector and significant rural to urban migration, particularly among the younger population, as most of the manufacturing industries are located in the more urbanised areas. Increased importance and priority placed by government policies (i.e. the New Economic Policy 1970 and the Second Malaysia Plan 1971-76 onwards) on manufacturing have indirectly reduced the pressure for large-scale conversion of forested land for agricultural land use as was apparent in the 1960s and 1970s.

In addition, recent government policies (such as the New Agricultural Policy) advocate a moratorium on opening new forest lands for land development schemes in Peninsular Malaysia and to concentrate instead on in situ development. The agriculture sector is undergoing an intensive re-engineering process to achieve higher levels of efficiency through intensive commercial-scale agricultural practices. The NAP emphasises increasing land productivity through the modernisation and commercialisation of the sector, among the smallholders. The agriculture-related R&D institutions focus on improving crop productivity with proper management and use of fertilisers, pesticides and improved genetic strains.

Thus, it is predicted that loss of habitat to agricultural practices will be minimal in the future as Peninsular Malaysia pursues its vision of becoming an industrialised nation by the year 2020. The current high growth rates in the manufacturing sector have been accompanied by a steady decline in the growth of the agricultural sector. A recent study supports the theory that biological diversity loss, or change, in Malaysia is dependent upon the nation's economic structure by demonstrating that a 1% per capita change in agriculture production effects a 11.3 % increase in the demand for agricultural land use per capita. Conversely, a 1% per capital change in manufacturing production results in a 0.41% decrease in the demand for agriculture.

Inevitably, the industrial sector is rapidly emerging as the major threat to biological diversity in the country. Industrial wastes that are incorrectly or indiscriminately disposed of will alter the abiotic condition of the ecosystem and subsequently alter species composition in the area. The early industrialisation phase of developing the resource-based industries in the 1970s, primarily palm oil and rubber processing, resulted in the discharge of large amounts of organic effluents into the water systems in Malaysia. As industrialisation progressed and diversified, so too did the major sources of industrial water pollution. The Department of Environment identified the chemical, food and beverage, textile, metal finishing, animal husbandry, and the rubber and palm oil processing industries as the biggest water polluters in 1995.

Of the 119 rivers monitored for Water Quality Index (WQI), based on the five parameters of biochemical oxygen demand (BOD), chemical oxygen demand (COD), ammoniacal nitrogen, suspended solids and hydrogen levels, in 1995, 14 rivers were categorised as highly polluted and 53 as slightly polluted. A large percentage of the highly polluted rivers are located in highly urbanised or industrialised regions on the west coast of Peninsular Malaysia. The deterioration of water quality adversely affects the survival rates of aquatic biological diversity and the dependent food chains.

Industrial growth has also exacerbated air pollution, a typical urban-industrial problem in Malaysia. The Klang Valley routinely experiences a haze during the annual dry seasons, which is attributed to industrial air pollution, vehicular fumes, emissions from power stations, boilers, incinerators, and open burning activities.

Perhaps the most detrimental industrial threat is the increase of toxic and hazardous wastes generated in the country. Until recently, there was no established infrastructure for the safe treatment and disposal of toxic and hazardous wastes in Malaysia. Approximately 380,000 cubic metres of industrial waste are generated annually in Peninsular Malaysia alone. While environmentally-responsible industries store their waste in drums on site, for many years it has been common practice for small to medium industries to dispose of waste into surface drains or unsecured sites. The neglect of environmental concerns by certain industries was dramatically brought to public attention in 1995 when a chemical company disposed of 41 drums of cyanide waste in an unsecured landfill on Pulau Pangkor, causing extensive damage to the surrounding fisheries industry, and potentially serious damage to the environment and human health.

Industrial pollution alters the ecosystem's chemical balance, the biological diversity and its capacity to support biological forms. If pollution continues unabated within an ecosystem, it will eventually render itself unsuitable to all living forms. An example is the Klang River. Once flourishing with a myriad of fish and bird species, the river is now almost completely devoid of life-forms despite million-ringgit efforts to clean the river.

With the expected increase in pressure on biological diversity from the industrial sector, there should be an accompanying increase in the use of market-based instruments for environmental management. In addition to the polluter-pays principle currently in place with enforcement of the Environmental Quality Act by the Department of Environment , some additional forms of economic incentives could be introduced.

Tax relief or exemptions for industries that implement pollution prevention measures and technologies, favourable loans for environmental projects such as waste disposal or recycling plants, conversion of loans to grants in return for environmental commitments and protection of critical areas; and financial incentives for siting industries to minimise impact on the environment are some measures that could be implemented. As the ASSESSMENT has attempted to demonstrate throughout, economic analysis is also a valuable ally for conservation interests as it emphasises conservation as an integral part of economic development. Economic instruments should be used to integrate development and environment at the state level so that conservation and development are mutually supportive.

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