FEC

 “South American Oasis” Aiming to Become a Renewable Energy Leader

—– Uruguay used to be known as “the Switzerland of South America.” How would you describe the current status of Uruguay?

Uruguay built the foundation of its high-level democracy, modeled after Switzerland, during the time of President José Batlle y Ordóñez in the early 20th Century. The country, also called a “South American oasis”, still maintains good conditions for democracy, including the rule of law, macroeconomic stability, equity, and social inclusion. We have a high literacy rate of almost 99%, and our economic and financial system, industrial relations, and educational system are excellent. Uruguay is also known for its tourism, “La Cumparsita”–a tango masterpiece by a Uruguayan composer, soccer, and the “Uruguay Round” of trade negotiations.

—– Uruguay has traditionally been more affluent than other South American countries. How did Uruguay achieve it?

The affluence comes from the population’s high education level, achieved by the economic growth and democratization, and from the increase of the middle class to almost 60% of the population. Uruguay’s per capita GDP has reached about $15,700, which is the highest among the South American countries. Other important factors have been the political stability and the continuity of policies. Although the democratization was interrupted during the civilian-military dictatorship from 1973 to February 85, our previous administrations have implemented open economic policies and democratic and social policies, producing many positive results in economy, elementary education, social welfare, and reduction of poverty.

—– Uruguay has made a strong commitment to clean energy. What motivated Uruguay’s energy change?

Uruguay used to be highly dependent on hydroelectric power, and suffered larger financial burdens in every dry season when the proportion of thermal power increased. The government has made a pledge to diversify the energy sources, and has been implementing the “Energy Policy 2005-2030” since 2008. The goal is to increase the proportion of wind power to 38% by 2017 and to become a world leader in renewable energy next to Denmark (42%). At present, more than 95% of the domestic power supply is based on renewable energy. Uruguay now has its energy sovereignty secured, and is exporting electricity in summer.

—– Are there any major challenges in further strengthening the bilateral ties between Uruguay and Japan?

The two countries have an excellent political relationship with each other. We have trade expansion on the agenda, and are hoping to  reopen the exportation of beef  and increase fruits, and other food items to Japan. At the summit meeting last November with Prime Minister Abe, President Vázquez expressed his hope that the ban imposed by Japan on importing fresh beef from Uruguay will be lifted promptly. Uruguay has been declared free of foot-and-mouth disease with vaccination since 2003. We are hoping the Japanese market will open its door for us next year.

—– What opportunities can Japanese companies expect from investing inUruguay?

Although Uruguay is a small country with a population of just over 3 million, it is a gateway into the Mercosur trading bloc of more than 400 million people. We offer the advantage of good laws and regulations, investment promotion policies, and high developed internet access, which will facilitate business activities. With free ports and free zones, Uruguay is a logistics hub of the South American continent and is attracting many Japanese companies. We hope that the Japan-Uruguay Investment Agreement signed last year will increase Japanese companies’ investments in Uruguay.

—– The headquarters of the Mercosur is located in Montevideo, Uruguay. What are its current major issues to be addressed?

The Mercosur is a customs union that was established for the purpose of eliminating tariffs, etc. It officially started in  1991 with 4 member  countries of Argentina, Brazil, Paraguay, and Uruguay; Venezuela joined in 2012 and Bolivia joining earlier this year. The union has expanded to include  6 South American countries as associate members. What is on the agenda for the Mercosur is its expansion outside of the region. In the first half of this year, Uruguay assumed the presidency of Mercosur, and pursued dialogues to  breath new life into negotiating  free trade agreements with the EU, India, Canada, and EFTA, and other countries and regions.This year Mercosur-Japan celebrated the III Dialogue to Strengthen the Economic Relationship Between Mercosur and Japan.