11/10/2021 – 8:38
Last October 7th marked the 450th anniversary of the Naval Battle of Lepanto in 1571, considered an essential milestone in the survival of Western civilization before the Ottoman Empire.
Spain at that time was part of the Holy League and was the power of that time, He had to assume the greater portion of responsibility on the side of the Christians both in financial and military terms, contributions from America discovered in 1492 played a valuable role in this feat.
Today Spain is part of the group of the top 15 economies on the planet, with a GDP of around 1.5 trillion dollars, their companies are among the ones that invest the most in Latin America, occupy the first places as investors in Spanish-speaking countries and Chile is one of many.
Although in the amount of foreign direct investment (FDI) entered in Chilean lands until 2019 it is in second place, we believe that the figure is much higher since Spanish subsidiaries located abroad usually send remittances that will be computed on behalf of third nations . In addition, the difference between the first United States and Spain is less than one billion dollars. Officially, the amount accumulated by Hispanic companies is 34,643 million dollars and Americans earn 35,464. Third is Canada with 34,439.
Reviewing the general stock of FDI in 2019, we verify that it is close to 300 billion dollars, all Chilean regions have the presence of foreign capital, the one followed by the Metropolitan Region, followed by Antofagasta, Atacama, Tarapac, Arica Parinacota and Valparaso . The least La Araucana and Aysn. By sectors, the mining company accumulates a figure close to 100 billion dollars, followed by Financial Services, over 60 billion; Electricity, gas and water, close to 40 billion; Trade below 20 billion; Manufacturing Industry and Communications above 13 billion each; then come Transportation and Storage, Construction, Agriculture and Fishing, Other Services, and Hotels and restaurants.
To what has been said so far, we must add the data of the FDI entered in 2021 between January and August, equivalent to an increase of 75% compared to the last five years, reaching 16,163 million dollars. In relation to the first eight months of 2020 it means an increase of 72.7%.
If we observe the breakdown of the income, the flow directed to equity participations is the most relevant accumulates 8,286 million dollars, continuing with the reinvested profits 6,647 million and the remainder 1,229 million have gone to debt instruments.
Chile maintains its attractiveness as a destination for FDI, vital for its development and growth, its status as a financial center is essential to maintain a deeper capital market that allows not only foreigners, but also Chilean entrepreneurs to finance their projects. at competitive rates.
We anticipated in our previous column the meeting of the Chile-Spain Business Council that will take place in Madrid. Indeed, at the CEOE headquarters its vice president and president of CEPYME Gerardo Cuerva intervened, who, along with welcoming the Chilean manufacturing delegation, commented that this was the first face-to-face visit in times of a pandemic that would serve to lay the foundations for a trip more than 100 Chilean businessmen to Spain in 2022.
Likewise, the Chile-Spain Council, reactivated last June 2020, represents business interests, in this sense Cuerva explained, “We have become an important tool of business diplomacy that continues to work for the reactivation of our economies and betting on the future of relations between Chile and Spain “.
From the work of the present and the future, Cuerva highlighted the great work done from the institutional leadership, as CEOE, CEPYME, CPC / SOFOFA and CEIB, by acting as an instrumental platform so that associated companies can find support, and from which to direct the political debate towards the need to promote a business climate favorable to trade and investment. Likewise, it opted to promote sustainable development, gender equality, defense of legal security, training, social dialogue, digitization and innovation, among other priorities.
In turn, the president of CPC Chile, Juan Sutil, highlighted the work carried out by CEOE and by the Council of Ibero-American Entrepreneurs-CEIB to strengthen our ties and the integration of the region. He also insisted that the fact of having maintained a permanent, open and dialogue-based deal during the pandemic has been very useful for Chile when it comes to channeling measures for economic recovery.
Subtle advocated deepening and intensifying our corporate and business union, and promote investments in key sectors for both countries, such as infrastructure, renewable energy or ICT. Finally, he assured that he hopes that the modernized EU-Chile Association Agreement will be concluded soon, since it will benefit not only the Andean country but also Spain. “I want to thank the Spanish company for the boost it has given to the development of Chile,” he said.
In the panel entitled “Scenario and economic projections of Chile and Spain”, the participants agreed on the need for institutional stability, legal security, reinforcing investments in key sectors for both markets and recognizing the role of business associations and companies as guarantors of the common future between Spain and Chile.
For his part, the economist, Vittorio Corbo, from Chile, assured during his speech that “it grows by investing, training human capital and innovating.” There are no magic recipes for economic recovery, you need a favorable business climate, improve the quality of education, and resolve political uncertainty.