Contrary to the perception that Malaysia is constantly struggling with debt or unable to help its neighbours, official data from Indonesia paints a very different picture.
According to figures from ASEAN Briefing, Malaysia emerged as the fourth-largest source of foreign direct investment (FDI) into Indonesia during the first quarter of 2025, pouring in approximately USD 1 billion (RM4.7 billion).
An infographic posted by investment-focused Instagram account @masterclasssaham showed a bar chart ranking the top eight FDI contributors to Indonesia.
Singapore held the top spot, investing more than Rp 69 trillion, followed by Hong Kong, China, and Malaysia, which invested Rp 15 trillion.
Trailing behind Malaysia were economic powerhouses like Japan, the United States, South Korea, and the Netherlands, making Malaysia’s placement in the top 5 all the more significant.
Surprise among netizens
The revelation took many Indonesians by surprise, especially those who assumed Malaysia wasn’t in a position to contribute significantly to the region’s development. But industry experts say this isn’t new.
Indonesia’s Minister of Investment, Rosan Roeslani, noted that Singapore has been Indonesia’s top foreign investor for over a decade, thanks to its robust trade ties and financial might.
However, Malaysia’s consistent presence in the top tier of investors reflects a strong, strategic, and mature economic relationship between the two countries.
Investments beyond Java
The FDI wasn’t just concentrated in Indonesia’s economic hub of Java. It also reached areas like Sulawesi and Maluku, with funds flowing into a wide range of sectors such as:
- Metal and metal goods manufacturing
- Mining
- Telecommunications and logistics
- Pharmaceuticals and chemicals
Mutually beneficial growth
While some may oversimplify FDI as merely ‘giving money’, the reality is that it’s a win-win partnership.
Malaysia, like many other countries, sees Indonesia as a promising investment destination due to its large consumer base, competitive labour costs, and rapidly developing industrial sectors.
As Indonesia ramps up its downstream industries and manufacturing capacity, investors from Kuala Lumpur and beyond are keen not to miss out on the growth opportunities.
