Brazil’s President Luiz Inacio Lula da Silva made headlines in Jakarta on October 22-23 with a visit that combined commerce, industry, and geopolitics.
The two-day trip resulted in eight memoranda of understanding — reportedly worth US$6 billion — covering trade, critical minerals cooperation, defense-industrial ties, and agricultural links. It also served as a public display of the growing South–South partnership between two of the world’s largest emerging markets.
At first glance, the visit appears to be classic statecraft: handshakes, factory tours, and glossy press photos. Look closer, and it becomes clear that it is strategic hedging for a multipolar era.
Brazil seeks diversified partners in Asia; Indonesia aims for industrial partnerships that create jobs, downstream processing, and technology transfer. The meeting therefore focused on three interconnected tracks: commercial realignment (market access and value-added trade), industrial cooperation (minerals and defense production), and geopolitical signaling (BRICS and South–South finance).
There are four major reasons why Jakarta was chosen as the first stopover over any other neighbour, including Canberra and ASEAN. At the outset, Indonesia is ASEAN’s heavyweight: the region’s largest economy, largest population and the diplomatic pivot most partners must court to reach Southeast Asia. For Brazil, a deep deal with Jakarta opens broader Southeast Asian doors in a way a bilateral pact with Australia cannot match.
A further point, Indonesia’s recent entry into BRICS—and its engagement with the New Development Bank—makes it a natural interlocutor for Brasilia’s BRICS-centered outreach.
Jakarta’s BRICS membership institutionalizes avenues for finance and project cooperation that Brazil can leverage to channel investment and co-finance industrial projects. That institutional alignment changes a summit-level handshake into a pipeline for longer-term financing and cooperation.
Another consideration is practical complementarity matters. Indonesia’s mineral endowments (nickel, manganese and downstream potential) and Brazil’s defense and aerospace industrial base (and experience in agricultural processing) are mutually useful.
Unlike some partners whose offers are mostly commercial, Brazil put technology transfer and joint production on the table — precisely the sort of deal Jakarta prizes as it seeks to add value at home.
Equally important is the politics of autonomy. Both capitals want room to manoeuvre amid US–China competition. Lula’s high-profile Asia tour and Prabowo’s reciprocal diplomacy send a signal: Asian and Latin American powers can build durable partnerships outside narrow alignment with Northern blocs. This is not anti-Western; it is pragmatic diversification in a fragmented global order.
So what was signed — and why it matters. The package of MoUs includes cooperation on energy and mining, agreements on trade facilitation and plans for defence-industrial collaboration. If these arrangements shift from memoranda to binding contracts and joint ventures — for example, shared processing facilities or co-manufactured platforms — the outcome is more than symbolic.
It creates alternative nodes in global supply chains for minerals and defence goods, reducing bottlenecks and exposing new opportunities for local industrialisation. The economic headline (multi-billion dollar MOUs) masks a more consequential narrative: downstream capability building and financing linkages.
The real test of the visit will be whether glossy memoranda translate into concrete investments, joint-venture registrations, and financing arrangements, particularly in nickel processing, battery inputs, and defence co-production, because only a binding investment schedule and visible factory commitments separate diplomatic theatre from industrial transformation.
A subsequent consideration is the financing architecture: New Development Bank or other BRICS-linked lending would give projects institutional depth and a degree of insulation from Western financial pressure, so NDB decisions and any BRICS-channelled proposals are critical signals of seriousness.
Finally, the contractual fine print matters: enforceable technology-transfer clauses, local-content rules and joint IP arrangements will determine whether value is retained in Indonesia and whether Brazil becomes a reliable regional production partner; rhetoric and press releases cannot substitute for robust legal commitments.
Past precedent shows this path is realistic: Indonesia has converted more than a dozen battery-materials and EV deals worth some $15+ billion into concrete investments (LG, Hyundai, Foxconn and others), demonstrating that MOUs can become factories when finance and policy align.
This pattern fits a classic hedging strategy — states diversify partners and build industrial options rather than taking binary sides — which explains why Jakarta and Brasília are pursuing pragmatic, reversible cooperation rather than exclusive alignments.
If those anchors are missing, the visit risks remaining symbolic rather than strategic — MOUs without follow-through invite investor scepticism, leave downstream capacity unbuilt, and can produce domestic disappointment that undermines political support for future projects.
Worse still, vague deals without enforceable technology-transfer or local-content terms can entrench extractive models that export raw value abroad rather than build local industry, weakening the very autonomy Jakarta claims to pursue.
For both Indonesia and Brazil, the difference between a picture opportunity and a paradigm change will be measured in signed contracts, funding approvals, and verifiable execution milestones, since without these, headline diplomacy yields little more than fleeting goodwill.
What does this mean for other partners — including Australia? Canberra should see Brazil–Indonesia momentum as a cue to sharpen Canberra’s own economic offers and to double down on areas where Australia has a clear comparative advantage: education, advanced services, industry linkages and targeted downstream investment.
But Australia should not view Jakarta’s BRICS outreach as a rebuke; rather, it is Indonesia exercising agency — and that agency will shape how partners design future offers. Constructive competition is the result: more options for Indonesia, more impetus for partners to offer better, deeper deals.
A broader takeaway for policymakers and analysts is this: State visits in 2025 are no longer mere ceremonial theater. They are factories for supply-chain strategy and geopolitical hedging.
Lula’s Jakarta stop was both a market play and a structural move in a re-arranging global economy — one aimed at knitting new industrial stitches between Latin America and Southeast Asia. If contracts follow the headlines, the visit will be judged a success; if it stalls at the MOU stage, it will be a diplomatic photo op with limited strategic consequence.
Optimism is warranted but conditional. The visit signals ambitious thinking — South–South industrial cooperation at scale — but real strategic resilience will come from delivery: capital, credible institutions, enforceable contracts and inclusive local benefits.
For Jakarta and Brasilia, this is the moment to turn diplomatic chemistry into durable industrial partnerships. For observers, it is a moment to watch whether South–South diplomacy can move from rhetoric to resilient reality.
Kurniawan Arif Maspul is a researcher and interdisciplinary writer focusing on Islamic diplomacy and Southeast Asian political thought.
