Government will analyze microeconomic reforms to promote economic activity
“Uruguay has to undertake important reforms at the microeconomic level” so that the economy “may have conditions of competition”, indicated the Minister of Economy and Finance, Gabriel Oddone. To this end, the Government will promote an agenda of microeconomic reforms starting this year, he announced.
The Minister of Economy and Finance, Gabriel Oddone, announced that the Government will promote this year a set of microeconomic, regulatory and economic activity promotion reforms that, for some cases, will require legislative treatment and, for others, regulatory changes that will be defined by the Executive Branch.
Uruguay is “full of examples” of “regulatory mechanisms that are part of an ancient economy”, among which Oddone mentioned the Equivalent Safety Standards Application (ANSE) rate, repealed by the current Budget Law, which taxed international trade to finance stevedoring, an activity that, although “disappeared” In the 1990s, the fee raised $8 million a year.
The minister announced that these reforms will mean “balance alterations” what will they play “private sector interests” during the transition, but “Uruguay has to undertake important reforms at the microeconomic level” which he defined as “relevant to be able to ensure that the economy has competitive conditions.”
The leader was one of the speakers at the international Agro en Punta fair, which takes place in Maldonado between February 4 and 6. For the first semester, the leader indicated, the microeconomic reforms will be aimed at improving production costs and generating greater efficiency.
Greater provision of services to improve competitiveness
Energy, logistics, forestry and innovation are “crucial areas” for which, according to the minister, the country must reduce its “access costs” and increase the provision of those services. Added to this was the review of the governance of the port system and the reduction in road transport costs. On this last point, he said: “We have to talk about the issue of two-trains and three-trains, it is crucial for the economy of the interior and the agricultural sector.”
Oddone clarified that Uruguay does not have the scale to be a “cheap country”, nor does it have “aspiration for coexistence” to be. “The only way to become a cheap country is to severely affect people’s incomes,” pointed out, a path that the country is not going to travel because “It is not part of the country’s coexistence matrix.”
“This government has decided that it is not the macroeconomy that is going to generate the conditions of competitiveness and efficiency so that the sectors exposed to international trade can compete; if we tried to do so, we would surely fail or, in an alternative case, we would affect the variation in the inflation rate or prices,” he clarified.
In this context, the minister understands that Uruguay needs to accelerate its growth rate in order to make the Uruguayan coexistence regime sustainable. “That is the reason why in the government we are firmly committed to promoting an agenda that includes growth issues as a first factor,” said. Other related issues are related to strengthening the coexistence model, attacking long-standing problems in Uruguay, such as child poverty or more emerging issues related to security.
As an example, he pointed out the changes in the agricultural sector during the last 25 years, through the incorporation of science and technology into production. For Oddone, this is “the reason why Uruguay” It is a more competitive, efficient country with greater activity in markets around the world. The example of agriculture is the way “that the rest of us Uruguayans have to follow,” defined.
GOVERNMENT WILL PROMOTE THE DEVELOPMENT OF FINANCING DIRECTED TO PRODUCTION
The leader recalled that credit measured as a percentage of the product in Uruguay is 30%. However, in OECD countries it is 50%. For this reason, he defined: “We have to ensure that our financial system is more present in the financing of productive activity.”
To deepen this process, Oddone indicated that the financial system must “introduce modifications in its operation”, a question that “It’s part of the agenda” of topics to be discussed, including a greater number of mortgage loans and the development of a securities market. On this last point, he placed public companies in a role “relevant”.
URUGUAY IS A STABLE COUNTRY IN A “CONVULSIVE” INTERNATIONAL FRAMEWORK
In another passage of his speech, Oddone indicated that the set of international consensuses of the last 70 years is “in crisis,” which generates a “convulsive” scenario, with principles such as the free mobility of goods, people and capital “under controversy,” he described.
In this context, the minister recalled that the main trading partner for Uruguayan goods is China; The United States is for services, the main source of foreign investment in Uruguay is the European Union and, in addition, the country has a privileged link with Argentina and Brazil. This framework requires maintaining a careful balance in ties from a geopolitical and economic point of view, he said.
Given this scenario, Oddone highlighted the dialogue to be part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), evaluate the possibility of integrating the Organization for Economic Cooperation and Development (OECD), and recalled the signing of the agreement with the European Union through Mercosur and the official mission of President Yamandú Orsi in China, he concluded.
In his speech, the minister highlighted: Uruguay is the most stable, most predictable country, with greater political stability, with a better climate of coexistence, which are elementary conditions for the development of long-term businesses.
