What are the reforms that Uruguay should face to attract investment?

RIO DE JANEIRO, BRAZIL – Uruguay has excellent potential to negotiate with the Arab world and attract investment, but it needs to improve its internal productivity. With this homework done, the government must move forward with its plan of opening up to the world to boost the country’s development.

For the executive director of the Center for the Study of Economic and Social Reality (Ceres), economist Ignacio Munyo, Uruguay can link up with the Arab world in a good way because “it has the capacity, but it must prepare and invest in playing in the A league”.

In this sense, Munyo said in an interview with El Observador that “as long as there are no tariffs and it is not necessary to move forward with an FTA, the ball is in the private sector’s court, and it has to score the goal”.

However, the executive director of Ceres said that Uruguay “must be aware that competing implies being in a position to compete, to be competitive”. In this sense, the country “generates heavy backpacks to produce and be productive”.

A pending plan has to help international interest come to the country with Uruguay’s internal productivity so that this interest can become a reality,” he pointed out.

With the current conditions, Munyo understands that many investments “will come” to Uruguay, “they will explore, make numbers, consult with the locals, and realize that, unfortunately, they are not going to close (the deal)”.

For the economist, “improving competitiveness levels” means “having better or more efficient public services, internal transportation systems, infrastructure systems, human capital levels to be able to hire in different sectors with high levels of sophistication and better labor relations that adapt to current needs” discarding “a labor regulation that has become a bit stale in some aspects”.

And he added: “If we had that whole package, surely many more investments would be made than those that are going to be made anyway”.

The Uruguayan Exporters Union (UEU) secretary-general, Teresa Aishemberg, expressed herself along the same lines. After she visited Dubai, in an interview with El Observador, she insisted on the need for Uruguay to lower the country’s costs to “maintain and make exports sustainable over time” since the important thing is not “to set an export record every other year, but to do it every year”.

“To stop the fact that we depend on international prices. When they are high, ok, but when they are not high, we have to be able to export with prices adequate to the demand, so we have to work in the country to lower them,” he said.

THERE IS CONSENSUS; NOW, WE MUST MOVE FORWARD

According to Munyo, there is alignment among the programs of the five political parties that make up the multicolor coalition in terms of advancing reforms that allow the country to become more competitive. “It is a matter of executing them.

That is what is needed from the inner side so that those investments that increasingly look at Uruguay as attractive in the world do not collide with numbers that do not match,” he said.

When asked if it is necessary to seek a broad consensus with the opposition parties in Parliament, the executive director of Ceres said that “today there is a broad parliamentary majority of 60%,” therefore, “beyond seeking a pact with the other party, within the majority of the government the conditions are already in place to move forward”. In any case, he indicated that if a national pact is reached, so much the better.

According to him, Uruguay is between inertia and take-off, the inertia that leads the country slowly to look at the runway and finish taking off and go down a new path of growth and sustainable development.

“The conditions for this are in place, but they depend largely on us, that we can internally be up to the challenge that the world is giving us today, looking at us as a country in which to invest, in which to trust,” he says.

“Then there is a great opportunity with the UAE and the Arab world in general, a market to study and work. There is a focus because that market will continue to grow in the coming years and complement us,” he adds.

Munyo insisted again on the need to go to the Arab world with priority over other options because “we do not have to ask anyone for anything, since the good thing about the Middle East -which is even better than China- is that we do not have to make an FTA, we have to go and generate trade relations, without asking anyone’s permission at all”.

Munyo insisted again on the need to go to the Arab world with priority over other options since “we do not have to ask anyone for anything since the good thing about the Middle East -which is even better than China- is that we do not have to make an FTA, we have to go and generate trade relations, without asking anyone’s permission”.

With information from El Observador