Malaysia among ‘Fabulous 5’ economies for FDI, says economist

Malaysia has been recognized as one of five Asean economies likely to attract significant foreign direct investment (FDI), according to economist Shan Saeed. The "Fabulous Five" - Malaysia, Indonesia, Thailand, the Philippines, and Vietnam - possess complementary strengths such as Malaysia's semiconductor and digital infrastructure sectors, Indonesia's resources, Thailand's manufacturing capacity, Vietnam's export platform, and the Philippines' services sector.

In 2025, these five economies received US$85.3 billion (RM347.51 billion) in FDI, accounting for around 35% of the region's total FDI of US$243.9 billion, as per UN Conference on Trade and Development's World Investment Report 2026. Additionally, these countries represent about 80% of Asean's announced greenfield investment of US$105.6 billion.

Shan emphasizes that the pipeline of projects indicates investment intentions and suggests that the region's next factories, data centers, and semiconductor capacity are likely to emerge in this region. Manufacturing FDI in the region rose nearly 150% to US$44 billion in 2024, and digital infrastructure further bolsters the case for FDI.

McKinsey estimates that the global data centre value chain will require US$6.7 trillion in cumulative investment between 2025 and 2030, with Johor, Jakarta in Indonesia, and Chonburi in Thailand identified as emerging data center locations. While conversion from investment attraction to actual investment is challenging, Shan highlights that energy security, regulatory credibility, and human-capital depth are critical factors in determining the extent to which announced investment becomes operating capacity and generates higher-value supply chains.