URUGUAY: GREAT AGRIBUSINESS
POTENTIAL IN LATIN AMERICA
Uruguay is a sparsely populated nation, a small territory poor in mineral resources. However, it is one of the most stable countries in the area, ranking number 55 in the world in the Human Development Index published by the United Nations Development Program (UNDP) and coming only after Chile and Argentina in Latin America.
Uruguay is located in the east coast of South America, bordering with Argentina, Brazil and the Atlantic Ocean. Its 68,000 square miles (176,215 square kilometers) make it the second smallest country the continent. Climate is temperate and humid with warm summers and rainfall throughout the year. The governmental system is democratic, presidential, and the country is one of twenty full democracies in the world.
DIVERSIFIED ECONOMY WITH AN AGRICULTURE CORE
The agriculture sector -which accounts for 11% of GDP- fuels Uruguayan economy growth. With an export-oriented focus (meat, rice, wheat, corn, and soybeans are staple goods) the roughly 3,450,000-inhabitant country produces food for 30 million people and could potentially feed 50 million. In the last 20+ years, Uruguay’s developed industrial sector supported subsequent yearly 2% growth in agriculture, changing it from being a livestock farming country to a diversified 2.3 million improved agriculture hectares. Tax incentives that reach about 20% of total agribusiness investment projects plus export facilities such as the Free Trade Zones regime incentive foreign or mixed ownership companies to set up business in Uruguay.
Moreover, besides the agricultural and industrial sectors the country nourishes strong service industries: financial, transport, communication, architecture and engineering, with high participation of information technologies, software development and related services. Thanks to the beautiful coastline on the Silver River and the Atlantic Ocean, tourism is another great source of income for Uruguay, offering beach, rural, cultural and lifestyle destinations.
WORKFORCE: A PRIMARY ADVANTAGE
After a record 15 years of positive economic growth, Uruguay’s poverty indicators experienced a considerable reduction, dropping from 29.9% in 2004 to 7.9% in 2019, according to the World Bank and the United Nations regard the country as a high-income one by. Likewise, it has one of the most equitable income distributions of the Latin American region.
One of the best-known characteristics of Uruguay society is its high literacy rate, which according to the United Nations is the highest in Latin America, as well as its life expectancy (around 77 years). Education is free and accessible at all levels.
Citizens have relatively easy access to health care due to a high density of doctors (4.46 doctors per thousand) and universal public health coverage.
In the same vein, according to the organization ”Transparency International”, Uruguay ranks first as the least corrupt nation in Latin America, and 23rd in the world. This means that it has a perfect environment for growth in the private sector, with remarkable political and social stability.
GEOGRAPHY AND TRANSPORTATION FACILITATE RELIABLE TRADE CONNECTIONS
Uruguay has more maritime territory than land, plus large basins connecting it to neighboring Argentina and Brazil (Rio de la Plata and Merín Lagoon basins). The Uruguay and Parana rivers allow for fluvial trade with inland South America, Paraguay and Bolivia. Montevideo Port has state of the art class facilities that allow shipping worldwide and make it the natural entry point for inbound Mercosur trade.
Inland, its relief is basically low hills and plain with abundant water resources. Nearly 95% of electricity comes from renewable energy, mostly hydroelectric facilities and wind parks and energy and communication access is widespread. The range of railways, road networks and airports, allows for easy domestic and international connection. Thanks to Uruguay’s extensive transportation networks relative to its size, Uruguay enjoys a large import and export relationship with its main trading partners, Argentina, Brazil and China.
Thus, Uruguay strategic location and logistic development allow access to 400 million people.