Chile and Indonesia: A growing and mutually beneficial relationship

Recent international projections have raised world growth expectations to 2.6 percent, with emerging and developing economies leading the rebound with an average of 4 percent. In contrast, advanced economies are forecast to expand more modestly, at 1.5 percent.

Chile is not separate from this trend. Estimations from the country’s Finance Ministry and central bank point to 2-3 percent economic growth in 2024, a figure backed by similar projections from international organizations such as the World Bank, the Organization for Economic Co-operation and Development (OECD) and the International Monetary Fund.

The projections for international trade are equally optimistic. The IMF, the OECD and World Trade Organization (WTO) project an increase in trade flows of between 2.3 and 3 percent by 2024 and 3.3 percent by 2025. These numbers reflect a recovery in world trade driven by robust global economic growth.

Chile, recognized worldwide as a reliable and safe destination for investment, faces the crucial task of diversifying its trade partners and attracting more foreign direct investment (FDI).

Chile’s President Gabriel Boric announced that in 2023, we had achieved the highest FDI figure since 2015 with more than US$21.7 billion invested, which analysts have recognized. Promoting and strengthening our international ties to diversify our destination markets and investment sources is therefore vital to boost growth and productivity in Chile.

FDI could support trade and integration into global value chains, encourage innovation and promote better-paid jobs and sustainable development

Through President Boric's mandate, we will continue our firm commitment to opening new markets for our exporters and attracting diverse capital that promotes sustainable economies and improves the well-being of our societies.

Nonetheless, we cannot ignore the global geopolitical context in which we find ourselves, characterized by armed conflicts, a scarcity of natural resources, the climate crisis and the contentious trade relationship between great powers.

This situation poses a significant challenge to generating greater resilience in supply chains, fostering regional integration and strengthening ties with trading partners to mitigate risks.

Chile and Indonesia emerge as complementary partners in this complex panorama of international trade. Both countries are rich in natural resources (key to the global energy transition) and are actively seeking to expand their commercial horizons.

Indonesia, one of the economies with higher growth in Southeast Asia, and Chile, a solid economy in Latin America, strengthened their complementarities by implementing the Comprehensive Economic Partnership Agreement (CEPA) in August 2019, initially focused on the exchange of goods.

In the almost five years since, the agreement has increased bilateral trade, with average annual growth of 11.2 percent. It is worth highlighting that Chilean exports to Indonesia include copper, wood and salmon, and imports from Indonesia include passenger cars, footwear and chemical products. This firm growth reflects the synergy between both nations and underlines the potential for further mutual economic development.

To continue strengthening our economic relationship with Indonesia, we have incorporated trade in services into our bilateral economic comprehensive agreement, allowing us to boost commercial exchange in this sector.

According to data from the WTO, trade in services registered 9 percent growth globally in 2023. This advance, already approved by the National Congress of Chile, could increase access to professional services of various types (legal, architecture, engineering, medical and dental, informatics, research and development, cultural and transportation, among other areas), providing certainty and predictability in the exports of both countries.

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