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

Juwai IQI global chief economist Shan Saeed notes McKinsey has identified Johor, alongside Jakarta in Indonesia and Chonburi in Thailand, to be among Asia’s emerging data centre locations.

Juwai IQI global chief economist Shan Saeed said the five economies – Malaysia, Indonesia, Thailand, the Philippines and Vietnam – are well placed to benefit as investment shifts towards productive capacity in the region.

“Asean’s investment centre of gravity is shifting towards productive capacity – and these five economies are underwriting that transition,” he told Bernama in a statement.

Shan, who calls the group the “Fabulous Five”, estimated that they received US$85.3 billion (RM347.51 billion) in FDI in 2025, or about 35% of Asean’s US$243.9 billion total.

His estimate was based on data in the UN Conference on Trade and Development’s World Investment Report 2026.

He also estimated that the five economies accounted for US$84.8 billion, or about 80%, of Asean’s US$105.6 billion in announced greenfield investment.

“The pipeline is the more telling signal. These projects represent investment intentions rather than disbursed capital. Their concentration indicates where the region’s next factories, data centres and semiconductor capacity are likely to emerge,” he said.

Citing the Asean Investment Report 2025, he said manufacturing FDI in the region rose nearly 150% to US$44 billion in 2024.

“Digital infrastructure strengthens the thesis,” he said, pointing to McKinsey’s estimate that the global data centre value chain would require about US$6.7 trillion in cumulative investment between 2025 and 2030.

He noted that McKinsey identified Johor, alongside Jakarta in Indonesia and Chonburi in Thailand, to be among Asia’s emerging data centre locations.

Shan also cited The Economist’s discussion of whether Malaysia’s data centre expansion could help the country move beyond middle-income status.

He said the five economies offer complementary strengths – Indonesia’s resources, Malaysia’s semiconductor and digital infrastructure sectors, Thailand’s manufacturing capacity, Vietnam’s export platform and the Philippines’ services sector.

However, he said that conversion, not attraction, is the harder test.

“Energy security, regulatory credibility and human-capital depth will determine how much announced investment becomes operating capacity – and how effectively that capacity generates technology transfer, skilled employment and higher-value supply chains.

“Scale attracts capital. Credibility converts it. Execution compounds it,” he said.