Malaysia is generally considered a safe country when it comes to natural disasters. The country’s geographical location is just off the Pacific Ring of Fire where seismic activities are rampant saving it from major earthquakes and volcanic eruptions. Tropical cyclones are also a rare sight, but flash floods, landslides and severe haze are an annual occurrence.
How Much Do Natural Disasters Costs The Nation?
In 2018, Emergency Events Database (EM-DAT) highlighted that over 20 years (1998 – 2018), we experienced 51 natural disasters[1,2]. The sustained damage was RM8 billion in that period[1,2].
Let’s breakdown financial costs from natural disasters in Malaysia:
- 1993: The landslides at Highland Towers not only robbed the lives of 48 people, but the incurred damage amounted to RM184 million.
- 2004: Damages from the unprecedented tsunami triggered by an earthquake in Aceh, Sumatra that hit several states in Malaysia (Perlis, Kedah, Penang) added up to RM15 million
- 2007: Floods that hit five states nationwide including Sabah and Sarawak resulted in RM2.5 billion in damage.
- 2014: Spells of hot and dry weather swept over Malaysia causing droughts and it affected 7% (2 out of 30 million) of the population. The inflation rate in that year increased due to food and water shortages affecting the agriculture sector. Further, water rationing affected Selangor and Negeri Sembilan[2,6].
- 2015: The earthquake that sent tremors to districts in Sabah resulted in RM100 million damage costs.
Natural disasters frequency and intensity would only increase as world leaders continue to find solutions to mitigate climate change. Plus, the cost accumulated from natural disaster damages would only rise due to the inflation rate and unstable economy, owing to the ongoing pandemic.
Flooding In 2014 vs 2021: Damages And Aid
In 2014, when the worst monsoon season in three decades hit East Coast states in Malaysia (i.e. Kelantan, Terengganu and Pahang), the post-flood rebuilding raked up an expense of more than RM2 billion. The most affected areas were in the agriculture sector – mainly in palm oil output. The government allocated RM58 million (USD$ 14 million) to aid the flood victims.
Fast forward to 2021, in mid-December, seven states in Malaysia were affected by flash flooding. In the worst-case scenario, the industrial hubs in Malaysia, Shah Alam and Klang were swept by the floodwater after relentless torrential rain.
A rough estimate suggests that RM1 billion is required for each state with industrialised areas to recover from the fallback. The government’s current aid consists of RM1,000 per household, RM1,000 vouchers to assist with car repairs and RM500 vouchers to purchase home appliances. Thus far, the Malaysian Family Flood Aid allocation is RM1.4 billion.
Getting Households Together Again
As floodwater receded, muddy floors and broken furniture were left behind. Families with NGOs and volunteers work together to clean the affected homes.
Our approximation is that it will take 2 weeks for homes to be liveable and familiar. – Sharifah I’Nur Habib Idris and Vignash Asokan, Komrad from Demokrat Universiti Malaya
Even if the severely hit houses were cleaned up, there are other pervasive worries such as the refurbishment cost that includes new electrical appliances and furniture lost to the flood. Filling in the gap, businesses have stepped in supplying the essential items and discounted repair charges to ease flood victims’ burden.
We hope that we can at least ensure a safe, clean living space for them (flood victims) by Mid-January but the battle doesn’t end there. I’m sure many need more than just a new home. They need new appliances, clothes, books, laptops. – Emily Chen, Volunteer with Women For Refugees
The estimated two-week duration applies to getting the household back on track. There are bound to be shortages and lacks as changemakers rely on volunteers and the goodwill of the general public.
If we are working towards establishing homes and ensuring families return to liveable conditions, it is unrealistic to assume that it can be done solely in the hands of NGOs. We need the involvement of the government in restoring normalcy for these families. – Ainie Haziqah, Co-Founder, Happy Bank Crew
Tougher Challenges For Enterprises
With small businesses, a longer duration may be required. Some may not even fully recover from the damages. Based on the experiences of those affected in the 2014 flood, the aid provided by the government is unable to cover the incurred loss.
The Ministry of International Trade and Industry reported that the 2014 flood-affected over 13,000 (37.7% of all ) small-medium enterprises (SMEs) in Kelantan. Further, in 2017, it cost the state more than RM 30 million in damages.
SME Corporation Malaysia told villagers to buy everything first before claiming from the company with receipts. How can we do that if we do not have any money? – Tengku Hussain Tengku Ahmad, a flood victim whose dream to open a cybercafe in Chenor, Pahang dashed after his computers and laptops were damaged 
What can we do with RM500 aid? We can barely feed ourselves for a week, what more, repair our broken premises. – Tengku Hussain Tengku Ahmad, a flood victim whose dream to open a cybercafe in Chenor, Pahang dashed after his computers and laptops were damaged 
Despite the losses increasing each year, many SMEs are underprepared when it comes to natural disasters. In 2018, it was found that 80% of small-medium enterprises in Malaysia are underinsured in Malaysia, especially when it comes to flood coverage.
What can we expect the recovery cost to look like in 2021 for SMEs? A good example would be from the experience of a chalet operator in Yan, Kedah that experienced flash flooding in August 2021.
Constructing the new wall and other repair works have already set us back by about RM80,000. This does not include RM15,000 from our own pocket to deepen the river. – Siti Hajar Abdul Hamid, chalet operator in Yan, Kedah.
SMEs in commercial and industrial areas in Shah Alam, specifically would have to churn out a figure more than stated by Siti Hajar in Yan, Kedah. A seafood distributor in Shah Alam who opened his shop two months ago shared the losses amounted to RM 120,000.
We need electricity to store our frozen food. But when the flood hit us, there was no electricity for four days and our food was spoiled. We suffered losses of more than RM120,000 (S$38,900). – Mr Kiu Wee Jen, a seafood distributor in Shah Alam .
This, in addition to most SMEs, was just slowly beginning to see better earnings as COVID-19 Standard Operating Procedure (SOP) lifted late this year.
The Bottom Line
Occurrences of floods have only increased over the years. The intensity, frequency and also its severity would only damage more livelihoods.
The damages with each flood is not an amount that could be sneezed at. December 2021 flood, should be a reminder and a wake-up call to those in charge to mitigate rather than forking out insufficient aids. It is also time to consider the overarching reality that climate change is here to stay, and tirelessly working NGOs should be helped in any capacity possible.
There are houses yet to be rebuilt in many flood-affected areas in Malaysia. Find out more about how you can be part of the action.
Explore our sources:
- EMDAT – The International Disaster Database. (2018). Economic Losses, Poverty & Disasters (1998 – 2017). Link
- Z.AR. (2018). Climate-related natural disasters cost Malaysia RM8b in last 20 years. Malay Mail. Link
- A.Akter, M.J.Megat Mohd Noor., M.Goto & S.Khanam. (2019). Landslide Disaster in Malaysia: An Overview. International Journal of Innovative Research and Development. Link
- K.Abdullah., K.S.Tan, N.H.M. Ghazali. (2005). NO MORE IN THE COMFORT ZONE – Malaysia’s Response to the December 2004 Tsunami. Presented At International Hydrography and Oceanography Conference and Exhibition, 3-7 July 2005, Kuala Lumpur Link
- OCHA Regional Office For Asia Pacific (n.d.). Floods Malaysia, December 2006 and January 2007. Link
- BERNAMA. (2014). Prolonged drought threatens to drive up food prices. Malay Mail. Link
- S.Lee. (2015). Damage from Sabah quake costly. The Star. Link
- M. Coronese, F. Lamperti, K.Keller, F. Chiaromonte, A. Roventini (2019). Evidence for sharp increase in the economic damages of extreme natural disasters. Proceedings of the National Academy of Sciences Link
- P.Prem Kumar. (2015). Post-flood rebuilding to cost Malaysia $560 million. AA.com. Link
- AFP.(2014). Malaysian government under fire for flood response. The Guardian. Link
- A. Aiman. (2021). Flood losses ‘could amount to RM20 billion’. Free Malaysia Today. Link
- N. A.Mohammed Radhi. (2021). Govt allocates RM1.4 billion under Malaysian Family Flood Aid. New Straits Times. Link
- New Straits Times. (2021). RM500 rebate for flood victims to buy electrical appliances. Link
- K.M.Sri Ramalu. (2018). Over 85% of SMEs at risk due to underinsurance, says AIG statistics. The Malaysian Reserve. Link
- HAKAM. (2015). The harsh realities of rebuilding livelihoods in the aftermath of the 2014 floods in Malaysia. Link
- BERNAMA. (2021). Yan chalet operator suffers RM95,000 loss after flash flood. Astro Awani. Link
- The Straits Times. (2021). Malaysian businesses hit hard by the floods. The Straits Times. Link
Cover image: Amir Irsyad Omar, retrieved from New Straits Times