Ann AllUruguay’s President Mujica recently completed a historic visit with US President Obama at the White House in Washington DC. The two countries have always shared good bilateral relations, but this trip illustrates a mutual desire by the two governments to cooperate even more closely moving forward; as the Obama administration moves to pay closer attention to its Latin American neighbors, and as Uruguay seeks to diversify its economy beyond reliance on its southern cone neighbors.
To discuss the bilateral relationship and the visit between the presidents of the two countries, Nearshore Americas recently sat down for an interview with the Ambassador of Uruguay to the United States, His Excellency Ambassador Juan Carlos Pita.
NSAM: Uruguay has had some recent successes. For example, the global chemical giant BASF recently announced a new shared services center that will open in Uruguay. What is the strategy of President Mujica in promoting business, especially in the field of information technology?
Ambassador: Yes. In general we have an investment law that has been refined over the past 10 years and has accelerated very competitive conditions for foreign direct investment in our country. The law itself also provides additional benefits that are making us very competitive; to attract specific investment in this sector, but it is part of an overall policy that has been giving us very good results. I would say that Uruguay in the last 10 years has been a great success, the greatest in its history in terms of investment. We managed to go from being a country that never exceeded [a foreign direct investment portion of] more than 12, 13% of its national product to an investment today around 25% of its product, and we are determined to still hit a greater jump, because it is the way we grow into the future.
In 10 years we have managed to more than double our gross domestic product and want in a few years to duplicate it again. The only way we can do this is by increasing foreign investment and incorporating more and new knowledge and technology. That is a simple and clear strategy from Uruguay. So you can have as an original Uruguayan business case that we have a country with a stable population, we are about 3,280,000 people, this population does not change; we are basically stagnant on birth rate, and there are very good distributive policies which have the virtue that they are distribution of growth.
That also creates conditions of social stability which makes it even a safer investment environment. So I think that Uruguay has entered a virtuous cycle, I would say in the last 10 years, the government wants to reaffirm and strengthen—continue forward, hitting the second jump that allows us to be playing a in few years, well into the league of developed countries.
NSAM: Uruguay is located between two large countries, Brazil and Argentina. The two countries are facing their own problems of economic and societal stability. How has that affected Uruguay, and what steps has Uruguay taken to insulate itself against the challenges facing its neighbors? Is this a factor in Uruguay’s strategy to strengthen its links not only with the United States, but with the rest of the world? We have seen that Uruguay is now participating in the TISA initiative of advanced services with the WTO.
Ambassador: Yes, it is a strategy that has been implemented, also with very good success. Uruguay first needs to have the best relationship regardless of the difficulties that exist with our great neighbors. Uruguay lives next to Brazil and Argentina, that’s our neighborhood and we belong to it, but in the last ten years, while we maintain the best possible links within the region, we have successfully diversified substantially our international economic integration in trade and the source of our foreign investments. Then we have diversified our production targets, but we have also diversified investment sources with which we are connected, so that we are much less dependent [on neighboring economies]. I think the globalized world of today makes everyone interdependent.
With this policy the country has pursued, we have now many more markets and many more inflows of foreign investment from more numerous, diverse backgrounds. This is an idea that is shared by the vast majority of Uruguayans. We’re in this region, we are Latin Americans but we want to have the best relationship with absolutely everyone. Not to mention that we have an excellent relationship with the United States—that is traditional, but at this time it is at a high point and we have made significant targets for access to U.S. markets. We have aimed for important new targets for Uruguay in the agro-food industry and we want much more U.S. investment in Uruguay. We are working for that.
That also creates conditions of social stability which makes it even a safer investment environment. So I think that Uruguay has entered a virtuous cycle, I would say in the last 10 years, the government wants to reaffirm and strengthen—continue forward, hitting the second jump that allows us to be playing a in few years, well into the league of developed countries.
NSAM: In May, President Mujica visited the White House and President Obama. What are the most important, achievements resulting from this historic visit of the two leaders?
Ambassador: I feel that we have three types of achievements, political in the sense that a relationship is established to seek cooperation between the two governments, planning to help solving some problems that exist in the continent: what we call our Latin America and what the United States defines as the western hemisphere, right?
There’s an attitude of cooperation, to help if you can as far as possible to complete the peace process in Colombia after so, so much suffering and so many deaths, that it ends once for all; to help if it is possible to find a way, it is very difficult to know what it can be, but to find a way of dialogue in Venezuela knowing the seriousness of the situation; and contribute globally with Uruguay participating actively in peacekeeping missions throughout the world and the promotion of freedom and human rights. Uruguay has reaffirmed a broad political consensus on these matters. I would say the two presidents are committed to continue working together in continental and global scenarios.
There are good business opportunities in various sectors of our economy not only in IT as you pointed out earlier in this interview, because we have excellent business opportunities in logistics, excellent business opportunities in infrastructure, we have excellent business opportunities in energy. There are a number of opportunities we have for anyone to invest, so we continue to grow. We need more and more investment.
This article was originally appeared on NSAM sister publication Global Delivery Report.
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