The role of multilateral economic development in Uruguay

The growth of the Uruguayan economy, the technological, economic, and social challenges regarding the country’s development and the role of multilateral agencies were the topics for a meeting organized by the Uruguayan-German Chamber of Commerce and Industry. 

During the meeting, Germán Ríos, Director CAF -development bank of Latin America- in Uruguay, referred to the importance of international agencies contributing to the understanding of each country’s needs and developing the relevant proposals. 

“We consider ourselves a Development Bank with two essential missions at the Latin American level. One is regional integration since Uruguay is a small country that needs to connect with the world, so part of our work addresses physical connectivity with its neighbors and logistics. The second is sustainable development. We are a versatile, agile, and competitive regional and global institution. We can provide knowledge and contribute external expertise to support public policy design”, he explained. 

He also detailed the infrastructure projects that CAF is currently performing in the country, such as investments in road infrastructure programs, water and sanitation projects, and a program to strengthen the national power system, among others. He stressed that the portfolio totals approximately one billion dollars, with disbursements of around 200 million dollars sent annually. 

Ríos stressed CAF support for education through the development of infrastructure and implementation of projects, including analyses of young people’s connections with its center of studies and real possibilities for obtaining work. “One of the problems we want to address is high school attrition and how to ensure that young people are entering the job market.”

In turn, Mario Bergara, President of the Central Bank of Uruguay (BCU), provided an overview on the economy on an international level and its influence at the national level. “Political, geopolitical, financial, and commercial factors clearly generate a degree of uncertainty, but create opportunities as well.” We are seeing significant volatility in financial markets and technological dynamics at the global level,” he explained. 

Bergara stated that government concerns with investments, which are responsible for close to 18% of the gross domestic product (GDP), resulted in the reformulation of parameters for the investment promotion regime. 

He also referred to the fiscal challenges and the social security situation in the medium and long term, as well as task automation and its impacts on the job market. “Uruguay can cope with the changes that come hand-in-hand with technology.” 

Matilde Bordón, country representative at the World Bank in Uruguay, pointed out that the Uruguayan economy has shown great resilience and performance in recent years and said that the Uruguayan government should consider demographic, educational, and infrastructural aspects to ensure sustainable development. 

According to the agency’s estimates, local growth will continue to accelerate in 2018, supported by consumption, corporate exports in recovery and the reopening of some markets. In that regard, growth is expected at 3.3% with a tendency towards stagnation near 2019. 

Morgan Doyle, representative of the Inter-American Development Bank (IDB) in Uruguay, explained that companies investing in innovation experience growth in productivity, exports, sales, and employment. “Investments in R&D have grown in recent years to 0.4% of the GDP, but there is still significant room for expansion. Low innovation levels lead to exporting low technological sophistication”, he said. 

Erwin Bachmann, President of the Uruguayan-German Chamber of Commerce and Industry, and Artur Brunner, Business Manager for the German Embassy, also attended the event.