AS OF Sept 18, Kedah's Muda Dam, the second-largest reservoir in a state known as the nation's rice bowl, stood at 11.88% of normal capacity, and nationwide, about a quarter of Malaysia's 43 monitored dams have slipped into "cautionary" territory.
On Sept 4, the Air Pollutant Index at Serian, Sarawak breached 500, and by Sept 16, 38 areas across Peninsular Malaysia were recording unhealthy air quality.
These are early warning signs of the pressures a Super El Niño could bring, affecting water and food security, public health and ecosystems across Malaysia.
Malaysia's Pre-Budget Statement 2027, released on Aug 18, refers to accelerating flood mitigation, disaster preparedness and climate-adaptation plans under Focus Area 10, "Building Energy, Food, Climate and Cyber Security." What it does not spell out is how nature itself can deliver on that commitment.
Budget 2027 must prioritise investments in Nature-based Solutions (NbS) that address these interconnected challenges while building resilient communities, thriving biodiversity, and a sustainable economy. Specifically, WWF-Malaysia calls for:
- • Establishing a dedicated NbS allocation under Focus Area 10 for watershed, forest, and coastal or marine ecosystem restoration;
- • Funding ecological connectivity and wildlife-safe infrastructure; and
- • Allocating RM1bil to the Ecological Fiscal Transfer (EFT) and expanding its application to support NbS implementation, while working toward dedicating at least 1% of the national budget to nature and biodiversity.
As Natural Resources and Environmental Sustainability Minister Datuk Seri Arthur Joseph Kurup recently noted, "Our tropical rainforests are not just carbon sinks. They are critical global infrastructure that regulates watersheds, stabilises rainfall and safeguards clean water supplies."
Recognising nature as critical infrastructure, serving local needs too, is central to why Malaysia must invest more in NbS.
NbS are actions that protect, restore or sustainably manage ecosystems to address climate and societal challenges while benefiting both people and nature. They can address issues such as water and food security while simultaneously strengthen climate resilience, biodiversity, water security, livelihoods and long-term economic sustainability.
Budget 2027 should allocate dedicated financing to scale proven nature-based solutions on the ground as well as promote innovation using NbS.
Nature secures water and food
Healthy forest landscapes act as natural water infrastructure, retaining water during droughts and regulating river flows. Ulu Muda, Kedah’s 163,810ha forest, important for water security, contributes water to Kedah and Perlis and supports roughly 40% of Malaysia’s rice production.
The same applies along the coast. Mangroves and coral reefs shield coastal communities from storm surges and erosion while sustaining fish stocks that feed our people. This matters for the economy too: the ocean supplies over a third of Malaysia's animal protein and supports more than 120,000 fishermen and fish farmers. Malaysia aims to protect at least 10% of its marine areas by 2030, yet less than 6% is currently protected.
Protecting and restoring these ecosystems requires sustained investment. Forests secure water supplies and support agriculture, while mangroves and coral reefs sustain fisheries and protect coastlines, providing essential services that underpin Malaysia's economy and well-being.
This is why greater investment in NbS is needed to protect and restore ecosystems that strengthen water security, food security, climate resilience and livelihoods.
Nature sustains biodiversity and livelihood
Malaysia reportedly retains nearly 55% forest cover, maintaining a commitment first made at the 1992 Rio Earth Summit. But the headline figure does not tell the whole story. Forest plantations and degraded forests, though often included within overall forest cover reporting, do not provide the same biodiversity and ecosystem benefits as healthy natural forests. Intact and well-managed forests play a critical role in securing clean water supplies, reducing landslide and flood risks, storing carbon, and supporting local livelihoods.
Growing development demands are fragmenting habitats and weakening the ecological connections wildlife depends on. In fact, official statements from the Wildlife and National Parks Department (Perhilitan) explicitly attribute the nationwide surge in human-wildlife conflicts to habitat fragmentation, validating that shrinking forests are forcing animals into closer contact with communities. Data from the department show cases rising from 11,818 in 2020 to a peak of 15,492 in 2024. Similar pressures are unfolding at sea, where warming waters and unsustainable coastal development affect mangroves, fish health, coral reefs, and sea turtle nesting habitats.
Malaysia already has plans to address this, from the Central Forest Spine Master Plan to national marine conservation targets. NbS like restoring habitats, reconnecting fragmented landscapes, and protecting critical ecosystems can reduce human-wildlife conflict, strengthen climate resilience and safeguard the natural systems that people, wildlife and the economy depend on.
Nature functions as critical infrastructure
Malaysia is not starting from zero. We endorsed the UN Environment Assembly's NbS framework in 2022. The World Bank's 2026 Country Climate and Development Report for Malaysia makes the economic case for integrating NbS into national planning. What is missing is investment to match.
EFT which incentivises states for maintaining protected areas rose from RM150mil in 2023 to RM250mil in 2025 but remained at the same level through 2026. By contrast, Malaysia allocated RM3.8bil in 2026 for flood mitigation and early warning systems alone. The country is still spending far more on fixing disaster damage than investing in the natural defenses that could prevent it.
While the Ecological Fiscal Transfer (EFT) supports both terrestrial and marine protected areas, its application remains largely focused on conservation outcomes within protected area systems. Expanding EFT to support the implementation of NbS would strengthen incentives for states to invest in ecosystem restoration and management that address societal challenges, including climate resilience, water security, disaster risk reduction, and community well-being.
Why we must act now
The pressures are already visible. Dams are running low, farmers and fishermen are operating under constraint, haze is affecting all of us, and habitat fragmentation is bringing wildlife closer to communities. These are not separate problems: they reflect the degradation of natural systems that help protect our wellbeing, livelihoods, and resilience. We need to invest in restoring and protecting these natural infrastructures today to prevent far worse consequences in the future.
The Rakyat is entitled to ask how the government and future leaders will safeguard the forests, rivers and coasts that underpin our water, food and economic security. Budget 2027 presents an opportunity for the Madani government to answer that question.
The evidence is already here, and so is the need. What is required now is investment that matches the scale of the challenge.
WWF-MALAYSIA
