Over the past decade, Uruguay’s growth has been sustained, strong, and inclusive and the country has bolstered its resilience and reduced its vulnerability to external shocks. Consequently, per capita GDP is among the highest in Latin America and the country’s middle class, as a proportion of the population, is the largest in the region.
We talked to Cecile Fruman, Director of the World Bank’s Trade and Competitiveness global practice to ask her what makes Uruguay’s story unique.
Question: What differentiates Uruguay from its neighbors in the region?
Cecile: Uruguay has a key asset in its institutional capital. Policies toward integration with the global marketplace, for example, have been longstanding, and despite minor fluctuations, the core remains. For example if we look at the forestry law of the late 1980s, or the law on special economic zones from the same period, the investment law of 1996, etc, all of them have been important pillars supporting today’s export and investment performance.
Q: What are the lessons learned and the main challenges in short-medium term for the country to boost competitiveness?
Cecile: We have learned that clear rules, and a predictable macro environment are crucial for the private sector to invest, innovate and perform well. And that diversification starts with the assets, public goods, and overall infrastructure of the economy. For example, for the ICT sector to prosper, the Government acknowledged that investments in education and skills were necessary, as well as investments in infrastructure (e.g.: fiber optic). This example should guide the efforts of the public sector in other strategic sectors to building up the necessary assets, before directly incentivizing the production of specific goods.
Q: How do you see Uruguay´s trade and its impact in the world market developing in the next 15 years?
Cecile: We see Uruguay being better integrated through trade and investment, being a leader in innovative efforts in traditional sectors, such as beef and grains, from whom other countries could learn, as well as being well positioned as a top-class supplier of global, modern services.