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Uruguay: Regional Opportunities in a Changing Global Scenario

By Mariella Chilmaza and Guillermo Zubillaga

In the wake of the floundering Doha Round of trade talks, AS/COA hosted its annual Montevideo conference, focusing on Uruguay's positive economic performance in the context of global market flux. Presentations by Ministers Danilo Astori and Daniel Martínez as well as U.S. Congressman Gregory Meeks served as conference highlights.

Speakers:

  • Danilo Astori, Minister of Economy and Finance
  • Daniel Martínez, Minister of Industry, Energy and Mines
  • Gregory Meeks, Congressman, Subcommittee on the Western Hemisphere, U.S. House of Representatives
  • Luis Enrique Berrizbeitia, Vice President and Deputy Chief Executive Officer, Corporación Andina de Fomento (CAF)
  • Randolph Bullard, Shareholder, Greenberg Traurig, LLP
  • Hernán López, Director, Latin America, Nasdaq OMX
  • Tómas Málaga, Chief Economist, Banco Itaú
  • Eduardo Mangarelli, General Manager, Uruguay, Microsoft Corporation
  • Daniel Ferrere, President, Chamber of Commerce, Uruguay - USA
  • Susan Segal, President and CEO, AS/COA

Summary

On August 8, 2008, AS/COA hosted its third annual Latin American Cities Conference in Montevideo, entitled "Uruguay: Regional Opportunities in a Changing Global Scenario.” The conference was organized in association with the Chamber of Commerce, Uruguay-USA and with the support of the Corporación Andina de Fomento (CAF). The event included the special participation of U.S. Congressman Gregory Meeks; CAF’s Luis Enrique Berrizbeitia; Minister of Economy and Finance Danilo Astori; and Minister of Industry, Energy, and Mines Daniel Martínez. Panelists focused on the recent failure of the Doha Round of global trade negotiations, the overall positive performance of the Uruguayan economy, and potential reforms to increase the country’s economic competitiveness.

Remarks by U.S. Congressman Gregory Meeks

Strengthening inter-American trade relations served as the main theme of U.S. Representative Gregory Meeks' (D-NY) speech. On the subject of Doha trade negotiations, the congressman was optimistic about the future, saying that it "took nearly eight years for the Uruguay Round to be concluded." While the representative mentioned some of the controversial aspects of trade agreements, such as illegal immigration and outsourcing, he stressed that these tend to be emphasized when the United States is a party to the agreement. He reaffirmed his commitment to strengthening commercial ties between the United States and Latin American countries. Although he asked for patience and persistence on the trade front, he stated that the number of Democrats in U.S. Congress supporting free trade has tripled from the time when he was the only Democrat in favor of the 2005 Dominican Republic-Central America Free Trade Agreement.

The Second-Fastest Growing Economy in the Region

Minister Astori announced that Uruguay's economy was growing at a pace higher than the predicted 4.6 percent, making it the second fastest growing economy in the region and only behind Panama. He stated that structural changes are currently being implemented in order to foment the expansion of the economy. During concluding remarks, he noted that Uruguay is in a better position than it was early in the decade to handle adverse economic scenarios.

In support of this positive outlook, Minister Martínez noted that Uruguay has seen sustained industrial growth since the crisis of 2002. Exports in all sectors have grown and markets have diversified while the importing of technological goods has grown, cementing Uruguay’s growth in that sector. Martínez also noted that the government plans to work extensively to provide stimulus packages to the private sector.

Looking Toward the Future

Speakers highlighted the recent failure of the Doha rounds as a concrete example of the instability in today’s global economy in which the region is inextricably immersed.  While they expressed an overall consensus regarding the current state of economic growth in the country, each also provided important recommendations for Uruguay and the region within this global context of change. Banco Itaú’s Tomás Málaga described a positive outlook for the region, citing the recent credit upgrade of the Brazilian economy by Standard and Poor’s—and the consequential flow of investment—as an example.

Uruguay should embrace global trade at a time when other countries in the region veer toward protectionism said Daniel Ferrere, president of the Chamber of Commerce, Uruguay-USA. Hernán López of Nasdaq OMX stated that, currently, a window of opportunity remains open to make capital markets more efficient and transparent, thereby contributing to the strengthening of the Uruguayan economy. Randolph Bullard from Greenberg Traurig said more could be done to build legal institutions strong enough to foment foreign investment. Luis Enrique Berrizbeitia also announced that the CAF recently approved a $400 million loan to prepare the country for tougher economic times. He stated, “Uruguay is in a solid position and is well protected, but it is still not to be doubted that we must be very alert regarding the current global scenario.”

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