What do you need to know about business in Uruguay? Uruguay is home to 3.3 million people,of whom 1.8 million live in the capital Montevideo and its metropolitan area, according to the CIA World Factbook. Uruguay is one of the most economically developed countries in South America, with a high GDP per capita and the 48th highest Human Development Index in the world as of 2011, and the first by human development in Latin America, when inequality is factored in, as reported by the UN Human Development Index. Uruguay is also noted for its low levels of corruption, being ranked by Transparency International as the second least corrupt country in Latin America. Its political and labor conditions are among the freest on the continent. It was also the highest rated country in Latin America on Legatum’s 2010 Prosperity Index.
How does the economy affect business in Uruguay?
The Uruguayan economy has preformed quite well over the past few decades. After averaging growth of 5% annually during 1996-98, in 1999-2002 the economy suffered a major downturn, stemming largely from the spillover effects of the economic problems of its large neighbors. Uruguay restructured its external debt in 2003 without asking creditors to accept a reduction on the principal. Economic growth for Uruguay resumed, and averaged 8% annually during the period 2004-08. The 2008-09 global financial crisis put a brake on Uruguay’s vigorous growth, which decelerated to 2.9% in 2009. Nevertheless, the country managed to avoid a recession and keep positive growth rates, mainly through higher public expenditure and investment, with GDP growth exceeding 7% in 2010. Uruguay has been able to maintain such high growth rates, mainly because of its strong and diverse economic base.Uruguay’s economy is characterized by an export-oriented agricultural sector, a well-educated work force, and high levels of social spending.
Products that businesses in Uruguay produce
According to FAOSTAT, Uruguay is one of world’s largest producers of: soybeans (9th); greasy wool (12th); horse meat (14th); beeswax (14th); quinces (17th); natural honey (19th);cattle meat (20th). Agriculture produces 70% of Uruguayan exports, according to the US State Department. Banking has traditionally been one of the strongest service export sectors in the country. Uruguay was once dubbed “the Switzerland of America”, mainly for its banking sector and stability. Almost 20 private banks, most of them branches of international banks, operate in the country. There are also a myriad of brokers and financial services bureaus. Uruguay has fully recovered from the financial crisis that caused a run on its banks. Several seaside resorts, like Punta del Este or Punta del Diablo in the south-eastern departments of Maldonado and Rocha, are regarded as a jet set resort in South America, and are the main attractions of Uruguay. International cruises call at Montevideo from October to March every year. Besides tourism, Uruguay’s well-educated workforce and lower-than-international wages have put Uruguay on the IT map. With many IT companies working out of a special economic zone in Uruguay, called Zonamerica Business and Technology Park.
Overall, business in Uruguay is going strong and it’s a good country to do business in. The market may be kind of small, but it is quite rich, with a GDP per capita of $13,600, and a GDP of $47.8 billion, as estimated by the IMF in 2010. Uruguay was ranked 90th for 2012, in the World Bank’s Ease of Doing Business Index. In the same index, Uruguay was ranked at 103rd for Enforcing Contracts, 97th for Protecting Investors, and 125th for Trading Across Borders. So while they may not be the best rankings, the overall market conditions in Uruguay are quite promising. For example, Uruguay had an economic growth rate of approximately 8.5% in 2010, as reported by Reuters. This is quite impressive considering that 2010 was a difficult year for the global economy, yet the Uruguayan market managed to stand out in even the most challenging of times. To find out more about various countries around the world, please join us on Globial.com