Why is Penang forecasting a higher population in 2030 than the Statistics Department’s projection?

Ah, population. Much of our development planning for housing and mobility including transport infrastructure hinges on what we expect our future population to be.

If the population forecast is unrealistically higher, then we would be planning and building more homes, highways and transport infrastructure than what we would actually need – which would be a colossal waste of our resources. Think of the property glut and over-the-top spending on transport infrastructure.

Let’s take a look at the population of the state of Penang;

Present population (Department of Statistics): 1.75m (2017)

Department of Statistics forecasts 1.98m (2030 revised) and 2.05m (2035)

BUT:

Survey report, Penang Structure Plan projects 2.53m (2035)
SRS Consortium (for land reclamation and transport infrastructure) projects 2.45m (2030)

Immediately, we can see there is a disparity of about half a million between the Department of Statistics’ figures and those projected by others.

Those higher projections of about 2.5m appear to be based on historical growth rates for the population extrapolated forward, whereas the Department of Statistics projects a much lower figure of around 2.0m.

Which is more accurate?

The Department of Statistics has access to more reliable and up-to-date data on migration, mortality and fertility. It also uses more sophisticated, internationally recognised projection techniques looking into each age group and gender.

Declining fertility

Of interest are the fertility rate and migration.

Let us look at the fertility rate, which is the average number of children each woman can be expected to have. All other things being equal, you would need a fertility rate of 2.1 for the population to replace itself ie for the population to remain stable.

Back in 1995, the total fertility rate in Penang in 1995 was 2.5. No wonder the population was growing steadily back then.

But by 2015, the fertility rate had plunged by 40 per cent to just 1.5. (In Singapore, the total fertility rate is 1.24 and Hong Kong 1.2.) Just look around at your friends and relatives and see how few children they have now compared to the previous generation. (That’s not surprising, given the higher cost of living and higher level of education.) That’s not all. The Department of Statistics projects the fertility rate for Penang to drop even further to just 1.3 in 2040.

So the natural population of Penang is hardly soaring!

Now, let’s look at migrants. How you project the population of Penang depends largely on this.

Bear in mind over the last 20 years (a period which covers times of economic boom as well as lean years), the average net inward migration (those settling in Penang minus those leaving Penang) was about 9,300 per year. Net migration for the period from 2010 to 2015 was even lower than this figure.

So the declining fertility rate and the low net migration into Penang help explain why the Department of Statistics projects only a small growth in the population of Penang from now. In fact, we are an aging population with the percentage of those over 60 rising from 9 per cent in 2017 to 15 per cent in 2030.

Now, why does this matter? If you ask most people, chances are they think that the population of Penang is rapidly expanding. This misconception is reinforced by state and developers’ propaganda that makes us believe that we have no choice but to reclaim more land and increase property density to cope with a surge in population.

But the reality is different: the Penang population is only rising very gradually due to a small net inward migration. After all, how many Malaysians can afford the state’s exorbitant property prices?

Build and ‘they’ will come?

So… if our population is hardly soaring – and instead increasing ever so slightly – do we really need to spend RM46bn on transport infrastructure which includes a six-lane north-south highway hugging Penang Hill and an eight-lane highway along Gurney Drive?

Do we really need to increase the maximum property development density by over four times (from 30 units per acre to 128)? Do we need to get rid of lower-density secondary corridors to raise the density in many places?

Do we really need another 381,000 homes until 2035 (as suggested in the Penang Structure Plan), which would double the number of existing homes of 387,000 (as recorded in the 2010 census) – and worsen the property glut.

Who are we building for? Is Penang adopting a build-and-they-will-come policy? But who are “They”? Wealthy foreigners?

I put across a couple of related questions on two different occasions:

My question during a Penang Transport Council workshop, which I attended as a representative of Aliran, in September 2016:

The three proposed artificial islands in the south of Penang Island are expected to house some 300,000 people. Where are these people coming from?

The answer I got was something along these lines: Well, the population is expected to grow because of economic activity, and these people will need a place to stay.

Then I asked, who are these 300,000 people that are expected to settle on these three islands – when only about 20 per cent of the homes on these three islands are going to be “affordable”? Who are we building for, really?

Are we going to create enclaves for the rich, especially on the second and third islands farther away from the noisy airport and the industrial zone, where there would very likely be fewer “affordable” homes amidst the exclusive condos and houses? (Most of the “affordable” homes will be concentrated in the first island nearest to Bayan Lepas.)

Someone from the planning section conceded that indeed these artificial islands in the south would cater mainly for the rich, especially the second and third islands. We knew that, didn’t we. But to actually hear them admitting it was something else.

Then at the Penang Structure Plan review briefing at Komtar on 8 December 2016, I asked why they were using a population forecast that was much higher than the Department of Statistics’ projection for Penang in 2030.

The answer: It would be better to plan for more people.

“Better” in what way and for whom I am not sure. Wouldn’t a much higher projected population figure lead to the creation of a glut in the property market, more towers and higher density than otherwise necessary?

Is the Penang Structure Plan in reality a developers’ plan that makes uses of the Town and Country Planning Act to justify more property development than necessary, as one observer suggested?

Does the planning department really think its forecast is more accurate than the Department of Statistics? Should they have a debate with the Department of Statistics about whose figure is more accurate?

With a population that is only creeping upwards, it is time to explore alternative, more sustainable development models, including the concept of a steady state economy.

Maybe then we won’t end up with a situation like this, as reported in The Edge – after all the propaganda we had been fed earlier:

The Business Processing Outsourcing Prime (BPO Prime) and Penang International Technology Park (PITP) projects worth a combined RM11.3 billion, which involve the Penang Development Corp (PDC) and Singapore’s Temasek Holdings Private Ltd, have been deferred due to current property market conditions.