This FDI Qualities Review of Chile examines how foreign direct investment (FDI) supports sustainable development in Chile and provides guidance on how to enhance its positive contribution. It offers an analysis of how FDI has contributed to national sustainable development goals in Chile and examines the potential and benefits of diversifying the FDI landscape towards more sustainable activities. The review also provides a detailed analysis of the policy and regulatory framework that influences the sustainable development impact of FDI. The report compares Chile with other OECD economies and provides examples of good practices based on the experience of other countries.

Chile has made impressive strides in terms of economic growth and living standards in recent decades. Yet, the country faces new and important sustainable development challenges. These include first and foremost stimulating productivity growth to sustain continuous improvements in the living standards of its citizens, reducing social inequalities and combating climate change. The 2019‑20 social protest and the COVID‑19 pandemic have made these challenges yet more pressing and addressing them will be crucial for Chile to become a more prosperous, equitable and resilient economy.

This chapter provides an overview of the main challenges and opportunities for sustainable development in Chile, and presents a summary of the main findings of the study, which show the role that foreign direct investment currently plays in supporting trade and GVC integration, productivity and innovation, job quality and skills, gender equality and the low-carbon transition. Based on an assessment of Chile’s regulatory and policy framework, the chapter also derives overarching policy considerations to strengthen the economic, social and environmental benefits of foreign investment.

This chapter examines FDI trends in Chile in terms of sector, regional distribution, country of origin and mode of entry of the foreign investors (i.e. greenfield FDI, M&As). It also analyses how FDI contributes to important sustainable development priorities in Chile, namely trade and GVC integration; productivity and innovation; job quality and skills, including for women; and the low-carbon transition. It also discusses how FDI can help diversify the Chilean economy towards sectors with better prospects for sustainable development.

This chapter assesses the policy and regulatory framework influencing the impact of FDI on sustainable development in Chile, with a focus on productivity, innovation, skills development and the low-carbon transition. Policy recommendations are provided to strengthen the economic, social and environmental benefits of investment and help Chile diversify its production structure towards high-tech and knowledge‑intensive economic activities.