The Kingdom of the Netherlands and the Oriental Republic of Uruguay have more in common than they really perceive. Both may sure benefit with a closer partnership.
By H.E. Mr. Alvaro González Otero, Ambassador of the Oriental Republic of Uruguay to the Kingdom of the Netherlands
Netherlands and Uruguay have small territories and they are influenced by contiguous neighbors. Both share similar landscapes, surrounded by waters, undulating slight hills and very friendly people.
They are also countries who firmly defend multilateralism and the principles and purposes of the United Nations. We maintain several compatible positions in this field, mainly with regard to Peace and Security.
Three main subjects have already been identified for working together, since we may add common areas of interest: green hydrogen; logistics, and agricultural developments. Nevertheless, there are also other valuable topics to grow up together.
Uruguay stands out in Latin America for being an egalitarian society, for its high per capita income and for its low levels of inequality and poverty. In relative terms, its middle class is the largest in the Americas, representing more than 60% of its population.
Its economy grew 4.4% in 2021, after a 6.1% drop the previous year due to the COVID-19 pandemic. By 2022, it is expected to grow 4.8%, mainly driven by the opening of borders to foreign tourism last summer and an increase in agricultural production. For 2023, growth of 2.7% is expected. This slowdown will be driven by lower growth in the main Mercosur partners, the global economic slowdown, the tightening of monetary policy, and the completion of extraordinary investments related to a new pulp mill for US$3 billion, in addition to complementary public works.
The strong economic advances that Uruguay has made, particularly since the 2002 crisis, added to the solid social pact that characterizes it, support the path towards poverty reduction and the promotion of shared prosperity that the country has travelled. Also defined by its strong vocation in terms of social protection, it should be mentioned, that historically, inclusive social policies have focused on expanding the coverage of programs, for example, around 90% of the population over 65 years of age is covered by the pension system: this is one of the highest coefficients in Latin America and the Caribbean, along with Argentina and Brazil.
Today, there are a number of structural constraints that can hinder progress towards sustainable development goals. In one hand, the country is in an advanced phase of the demographic transition and is in the process of reforming its social security system, which currently generates large fiscal costs. In addition, Uruguay faces challenges to improve its competitiveness and long-term growth. In turn, Uruguay faces challenges to incorporate women into economic activity and transform education and labour institutions to take advantage of technological change productively, in addition to promoting investment in infrastructure and integration into global value chains. Finally, despite the fact that the incidence of poverty in Uruguay remains relatively low in regional comparison, there are still disparities in terms of age, sex, region, and ancestry, which could have deepened with the pandemic.
Strong institutional performance in other areas, such as trust in government, low corruption, and a consensus-based political approach, as well as a strong commitment to strengthen institutional arrangements, give the country a firm foundation on which to continue renewing their social contract and establish policies to attack current limitations.
On a different subject, the country achieved a transformation of its energy matrix and continues to take firm steps towards greater use of clean energy. Favored by its geographical location for the generation of solar, wind and hydraulic energy, Uruguay is undergoing a process of investment in renewable energies that has become a priority with institutional support. It currently allocates approximately 3% of its Gross Domestic Product (GDP) to energy infrastructure, which places it in fifth place in the world in terms of investment in clean energy, according to the Renewables Global Status Report prepared by REN21. In addition, according to the global index prepared by the World Economic Forum and the consulting firm Accenture in 2021, Uruguay was for the second time the best positioned in Latin America in this aspect. Investment in renewable energy has become a national priority that materializes in the exponential increase in electricity production through clean sources. This change in the energy sector began with a public-private model, in which the public sector was in charge of coordinating and managing national and international contributions and the private sphere was the source of investment, a model that was praised by the International Energy Agency Renewables. The country has been committed to this cause since its participation at the end of 2019 in the annual summit of the United Nations Macro Convention on Climate Change. From here it managed to combine its natural resources, future-oriented legislation and investments to achieve an energy transformation that allows it to produce more than 97% of its energy from renewable sources.
In the touristic sector, the beach resort city of Punta del Este, offers not only pristine ocean coasts, but also activities like visits to typical estancias, adventure tours, hunting, horseback riding and much more. Another attractive destination is Colonia del Sacramento, a beautifully preserved colonial town, originally founded by the Portuguese, which is also on the UNESCO World Heritage List. Also, the city of Montevideo -the nation’s capital and home to nearly half of Uruguay’s population-, is a vibrant, eclectic place with a rich cultural life. Stretching 12.5 miles (20km) from east to west, the city wears many faces, from its industrial port to the exclusive beachside suburb of Carrasco near the airport.
In the wine production sector, it is important to mention that two of its tannat wines -Uruguay’s flagship variety- were awarded gold and silver medals in London. Decanter World Wine Awards, one of the most important awards in the industry organized by the prestigious British magazine Decanter, awarded the Sacromonte winery in Maldonado, Uruguay, in its 2022 edition with a gold medal for its 2020 tannat wine and a silver medal for its tannat concrete-aged. In the competition, held between April 24 and 30 in London, more than 54 countries participated and 300 international experts evaluated nearly 18,000 wines. The history of wine in Uruguay is more than 250 years old and this is one of the reasons that has contributed to the recognition it enjoys in international markets. It is among the top four wine producers in Latin America, located between latitude 30° and 35°, a privileged geographical location as that of the best wine producers in the world. The tannat grape was consolidated as the main variety in the country due to its good adaptation to the soil and climate. Among the wine producing countries, Uruguay is identified by this unique and characteristic varietal strain, which achieves a wine of elegant intensity and character.
Taking advantage of the World Cup in Qatar, in which Uruguay is participating, the country sees the opportunity to exhibit the excellence of ultra-fine Uruguayan wool. Through the initiative “Lana Celeste a Catar”, the country plans to dress the players of the Uruguayan Soccer Team with national Merino wool suits of the highest quality. Like the Uruguayan Soccer Team, Uruguayan wool competes with the best in the world, which is why it was decided that the players wear suits made with the highest quality Uruguayan Merino wool during the Qatar 2022 World Cup. The “Lana Celeste a Qatar” project represents an excellent opportunity to promote the country as an exporter of differentiated and high-value natural products, as well as a benchmark in fashion and sustainable design. Our wool is recognized as a natural, renewable, recyclable product, produced in a sustainable way, with certified processes and products, friendly to the environment and animal welfare. The use of this product in Qatar -a state with a very hot climate- will demonstrate that it offers optimal thermal insulation compared to other natural and synthetic fibers, which is why it can be used in both summer and winter. Superfine Merino wool, less than 18 microns for these suits, allows to produce Super 130’s fabrics, light, 260 grams per meter, which adapt to the climatic conditions of Qatar, with excellent comfort on the skin and following the trend of international fashion.
Finally, the most important reasons why Uruguay has become a leader in South America for investments and business are:
1. Reliable country: Uruguay has political, democratic and social stability, and macroeconomic soundness, which creates the right environment for successful investment. It is also a stable and predictable country, qualities that are taken as a differential by investors.
2. Gateway to Latin America: Uruguay´s strategic location as the Gateway to the region offers the perfect springboard to Latin America. Uruguay provides top-level logistics infrastructure, state-of-the-art telecommunications technology and the best energy supply in the region based on renewable resources. Through Uruguay is possible to access a market of 400 million people, which accounts for 68% of Latin America’s GDP and represents a flow of foreign trade of almost 74% of Latin America’s total.
3. The best partner to develop business: Uruguay has become the destination par excellence for international companies seeking quality, efficiency, experience and new opportunities in the most stable and reliable business environment in Latin America. Both national and foreign investment has been declared of national interest. The foreign and local investors are treated equally. It also has a wide range of incentives that adapt to different types of activities, both industrial, commercial or services that want to be carried out in the country.
4. Availability of talent: Human resources in Uruguay are highly competitive, qualified and multilingual. Moreover, the state promotes the implementation of training programs tailored for existing staff or new recruits, offering grants to companies that present eligible projects.
The state guarantees free access to education, from pre-school to university. Around 5% of the Gross Domestic Product of Uruguay is invested in education.
With all these notes in mind, our Embassy kindly invites all of you to visit Uruguay and directly confirm the similarities between these two progressive countries.