Uruguay

The development goal of the Public Sector Management and Social Inclusion Development Policy Loan (DPL) Program for Uruguay is to support the development and implementation... Show More + of policies aimed at strengthening resilience to external shocks and improving growth opportunities, with a focus on poor and vulnerable groups. This DPL for US$260 million is to be implemented as a single operation with a Deferred Drawdown Option (DDO). Uruguay recorded a strong macro economic performance over the past nine years. Real gross domestic product (GDP) growth averaged more than 5 percent per year in the period the 2002 debt crisis. The year 2011 was the ninth consecutive year of GDP growth, marking one of the longest growth periods in the country's history. Prudent macroeconomic policies, improvements in structural areas and favorable external economic conditions, such as buoyant demand for its main export products and a booming regional economy, have contributed to the strong economic performance of Uruguay and helped protect the economy during the 2008/2009 crisis. Private consumption continues to be the main driver of the economy. As in previous years, with the exception of 2009, when GDP growth was driven by the external sector, private consumption was the main driver of economic growth. Private consumption grew by 7.6 percent in real terms in 2011, accounting for 6.1 percentage points of total growth. Gross domestic investment, fueled by still high levels of foreign direct investment (FDI) inflows (4.7 percent of GDP in 2011), grew by 7 percent and explained 1.4 percentage points of GDP growth. Similar to previous years, the contribution from the external sector was negative, reducing GDP growth by 2.1 percentage points. Show Less -

The aim of this paper is to review the state of the productive infrastructure of Uruguay and the development policies that govern it and to propose policy options for... Show More + the long term contribution to achieving a higher level of economic and sustainable development, based on the premise that there is a link between the development of a country's infrastructure and its economic growth. The study analyzes the institutions and pertinent regulations. The study examines in greater depth the factors related to infrastructure production that affect the country in a quantum leap in economic growth. The first study concludes that while no one can assert that the sectors of Uruguay's electricity and transportation are inefficient, there are potential sectoral gains. The policy options have been framed by strategic pillars for each sector and can be summarized as follows: Increase the capacity of transport infrastructure and land ports. Maximize efficiency in providing service transport. Strengthen efficient allocation of resources through a multimodal vision. Improve efficiency and regulation. Position as a logistics center in Uruguay the MERCOSLJR. Therefore, the objective of this study is to review the policies in the areas of Uruguay's productive infrastucture that can have a major impact on the productive structure of the country and hence on economic growth, and hence propose elements and policy options for sectors in the long term. Show Less -

Ratings for the Public Services Modernization Technical Assistance Project for Uruguay were as follows: outcomes were moderately satisfactory, the risk to development... Show More + outcome was moderate, the Bank performance was satisfactory, and the Borrower performance was moderately satisfactory. Some lessons learned included: projects involving broad based public reform should include inclusive and extensive consultations with stakeholders in the reform process to better explain objectives, design, approach, and benefits. A stakeholder and political analysis during project preparation should help to identify institutional change champions and those opposed to reform, therefore, assisting in the consultation strategies. Sector reform requires flexibility and the ability to not prematurely close any door. The project strategies for sector reform, namely regulatory frameworks and institutions, Private Sector Participation (PSP), yardstick competition, unbundling of sectors, and corporate governance of state owned utilities, reinforced each other and contributed to the transformation of public services. This allowed the Bank to continue to push for sector reform once PSP became off limits for some sectors. Given the likelihood of a shift in the political context during long-term reform projects, it is essential that the strategy to achieve a given objective remain flexible to ensure the project is relevant and palatable to successive administrations and for popular support. The Bank and Government of Uruguay (GoU) gained valuable experience with sector reform. It is essential that projects of this nature include an important knowledge base component, including dissemination of publications and tools to a wider public. The wide dissemination of the project and the creation of a specific knowledge base could have an impact in increasing local ownership and acknowledgement of reform at all levels. Show Less -

The Second Programmatic Reform Implementation Development Policy Loan Program (PRIDPL II) operation is consistent with the three main objective of the Country Assistance... Show More + Strategy (CAS), namely: (i) reduce vulnerability of Uruguay's economy; (ii) sustain economic growth; and (iii) improve living standards. As the centerpiece of the CAS lending program, the PRIDPL program targets all three objectives. In terms of specific actions, the PRIDPL II focuses on three areas: (a) implementation of the tax reform; (b) a first set of measures to improve the business climate and initiate the design of a program to promote capital markets development; and (c) implementation of ongoing measures to improve the social security system. These three areas are consistent with the broader reform agenda set out in the CAS. The tax reform supported by PRIDPL II is the cornerstone of the government's tax administration and tax policy reforms. The measures identified to improve the business climate and promote capital markets are aligned with the financial sector and capital market reform goals set out in the CAS. Finally, the social protection component builds on the Social Program Development Policy Loan (SPDPL) presented to the Board with the CAS. The overall risk associated with the PRIDPL II is considered moderate. The risks can be classified as those related to country context, which consists of economic, political and social risks, and as those related to the PRIDPL II program, which correspond to managerial, sustainability, and outcome risks with regard to program implementation. Show Less -

Ratings for the Public Services and Social Sectors Structural Adjustment Loan Project for Uruguay were as follows: outcomes were moderately unsatisfactory, the risk... Show More + to development outcome was moderate, the Bank performance was moderately satisfactory, and the Borrower performance was moderately satisfactory. Some lessons learned included: The design of the Structural Adjustment Loan (SAL) raises a fundamental question about whether far-reaching structural reforms can best be achieved at a time of deep crisis when conditionality can easily be perceived as an attempt to use external financing as a way to force through policy reforms without popular support. This may be particularly true in consensus driven countries like Uruguay. Sector reforms should be based on a realistic assessment of the political and economic context and the willingness of the people and the government to accept the reform. Discussions with officials of the current and previous administrations during program implementation showed that a program involving policy changes with many different objectives (increased competitiveness, improved performance, reduced costs, increased competition, greater private participation in many sectors, reduced vulnerability to external changes) involves regulatory rules and an institutional framework that can only work with popular support. Tariff increases and other reforms are possible without social upheaval if properly identified and smoothly conducted. The Bank should understand and acknowledge cultural realities and, if needed, accept slowing down some reforms and relaxing some measures and controls. Show Less -

This report provides an assessment of accounting, financial reporting and auditing practices within Uruguay's corporate sector, using International Financial Reporting... Show More + Standards (IFRS) and International Standards on Auditing (ISA) as benchmarks, and drawing on international experience and good practices in those fields. The main objective of this ROSC is to assist the authorities in strengthening accounting and auditing practices and in enhancing financial transparency in the corporate sector. These efforts support the following development objectives: (a) making Uruguay's business climate more attractive for foreign direct investment and foster capital market development; (b) enhancing opportunities for greater economic integration with Mercosur, the US and the EU; and (c) improving state-owned enterprise (SOE) governance and accountability. Show Less -