Uruguay at a glance | 1

Uruguay at a glance

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Country Profile

Uruguay is a country which offers a high level of security and welfare to live. Weather is pleasant all year long, summer being the ideal season for tourism. It is strategically situated as Paraná, Río de la Plata and Uruguay rivers run into the Atlantic Ocean, offering great competitive advantages.

For years the country has kept a strong political and social stability, supported by a consolidated democracy and strong legal certainty.

Nowadays, the political system has three major parties which have taken turns in office, always keeping a strong respect for the rules of game and the essential grounds of economic activity. Its legal system is based on legal rules approved by the Parliament and passed by the Executive Branch, there being special judges for different matters.

Uruguay is the most peaceful country of Latin America according to 2011 Global Peace Index drawn up by the Institute for Economics and Peace (IEP). In the list of 153 nations, Uruguay is ranked 21st and in the region is followed by Costa Rica, ranked in the 31st position.

Economy

Uruguayan economy grew 8.5% in 2010, consolidating the seventh consecutive growth year. The average growth rate over the last seven years is 6.3%. GDP per capita almost doubled in the last six years and in 2010 it reached levels close to US$ 12,000.

Inflation in 2010 reached 6.93%, practically in the upper limit of the target range established by BCU (3%-7%). Since June 2011, target range is 4%-6%. It is worth mentioning that BCU’s purpose is to control inflation, for which it uses the Monetary Policy Rate (MPR) as instrument

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thereof.

Gross Fixed Capital Formation increased more than two percentage points over the last years. This is explained not only by the internal investment increase but also by the strong foreign investment flow. Direct foreign investment (DFI) has quadrupled over the last seven years.

The external sector reported great dynamism over the last years. Exports of goods and services increased fourfold over the last seven years, while imports grew as well.

Socio-Economic aspects

Uruguay is the highest rated country in Latin America on the 2011 Legatum Prosperity Index which assesses the economy situation and quality of life and is ranked No. 28 among the 101 nations assessed by this ranking. Such index takes into account economic indexes and assesses quality of life, health, population satisfaction and entrepreneurship development indexes.

The country is characterized by a long tradition of respect for citizens’ rights and is part of the list of countries with the highest levels of equal opportunities for Latin American children, according to the Human Opportunity Index (HOI) drawn up by the World Bank. Uruguay is ranked as the second highest overall HOI in the region in 2010 behind Chile.

Primary education is secular, free, compulsory and publicly funded. Population has access to free education from the first level of kindergarten (Early Education) until graduation from University, thus obtaining minimum illiteracy levels.

Uruguay has been the first country to develop a social and digital inclusion plan called “Plan Ceibal” which involves the free delivery of one laptop per child and teacher in state elementary education and first level of secondary education throughout the country. This way, it is intended to promote digital inclusion in order to decrease the digital gap, both regarding other countries and among Uruguayan citizens, so that larger and better access to education and culture can be obtained.

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Investment promotion and protection

Uruguay has an attractive investment promotion system – Law 16,906 on Investment Promotion and Protection – and from 2008 there is an exclusive investor assistance center and an automatic, modern, transparent and efficient mechanism which benefits more companies and sets forth objective criteria for granting tax exemptions.

There is no discrimination in the treatment of national and foreign capital, whereby all investors, regardless of their origin, can have access to the benefits granted by the Investment Promotion Law and there are no limits to the transfer of benefits or repatriation of capitals so no prior permits from the authorities are required. The exchange market is free, with no

restrictions for the purchase or sale of foreign exchange and investments may be made in any currency.

In Uruguay there are international standards regarding adherence to intellectual property. Copyright, trademarks and patents are specifically protected by Uruguayan laws. According to The Global Competitiveness Report (2011), Uruguay is the second country in Latin America to deeply protect intellectual property.

Logistics, infrastructure and communications

Localization and infrastructure in Uruguay are fit for concentrating and distributing merchandise to the wealthiest region of South America. It has deep ports, unique in South America, operating under the Free Port system and first-class port infrastructure in Montevideo,

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it being a regional hub par excellence for the South American Cone. Uruguay is considered the second country in South America regarding infrastructure development (source: The Global Competitiveness Report 2010-2011, World Economic Forum).

Moreover, the country has a new modern airport, a new belt highway in Montevideo and a road expansion to Colonia and a new ferry port in Colonia, thus achieving an appropriate support infrastructure for passenger and merchandise transportation by land and air.

The road network is the heaviest in Latin America (45 km of paved roads every 1,000 Km2 of surface). Uruguay is considered the second

country in South America regarding its roads’ quality (source: The Global Competitiveness Report 2010-2011, World Economic Forum).

Uruguay has wide coverage telecommunication services through the national territory. It has the largest cell phone teledensity rate in Latin America: 132 lines every 100 inhabitants.

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