Uruguay has grabbed more than its fair share of headlines recently, thanks to its atypical and endearing president, José “Pepe” Mujica, and the exceptionally progressive policies he has championed, such as legalising cannabis.
But the tiny South American country’s presidential elections on Sunday will go largely unnoticed, as the nail-biting finish of the presidential race in Brazil monopolises attention.
Nevertheless, the two elections are remarkably similar. In both countries, a left-wing party that has ruled for the last decade is struggling to remain in power, with growing discontent as their economies slow down – although admittedly Uruguay’s economy remains much healthier than Brazil’s. Read more
By Lucinda Elliott of LatAm Confidential
Commodity prices may be weaker but South American food producers still enjoy formidable comparative advantages. Foreign investors seeking to benefit from the enormous pick up in Chinese demand for agricultural commodities grown in Latin America have however had a fairly complicated time.
A 2010 law limits direct foreign ownership of land in Brazil. Tax and foreign constraints limit the profitability of farming in Argentina and listed agribusiness stocks are few and far between, making it hard for investors to buy into the sector in the region’s agriculture powerhouses. Read more
By Samuel George of the Bertelsmann Foundation
When the presidents of Chile, Colombia, Mexico and Peru meet on June 19 and 20 for the ninth Pacific Alliance summit in Nayarit, Mexico, they’ll likely debate a proposal that could transform their quietly successful pact while boosting Latin American unity.
At the urging of Chile’s Michelle Bachelet, the gathering is expected to broach the potential integration of the Alliance, which was formed among the four countries in 2012, and Mercosur, an older grouping that includes the regional heavyweights of Brazil and Argentina. The issue would represent a crossroads for the Alliance, however, since Mercosur does not generally share the enthusiasm for international trade shown by its neighbours on the Pacific coast. Read more
Could Uruguay’s groundbreaking marijuana law lead to more than just legal spliffs? Politicians, government officials and legalisation activists all say: yes.
Producing marijuana legally to supply domestic recreational demand could be Uruguay’s first step to becoming a cannabis exporter and an R&D centre brimming with foreign investment. Read more
It had all been going so well for Uruguay’s president, José “Pepe” Mujica. The passing of a groundbreaking law this month that will legalise and regulate the production and consumption of marijuana has earned him praise around the world.
This even helped Uruguay earn its status as The Economist’s first ever ‘country of the year’. So the resignation on Saturday of Mujica’s finance minister, Fernando Lorenzo, was a bit of a dampener as the year comes to an end. He will be replaced by the president of the central bank, Mario Bergara it was announced on Monday. Read more
Pot smokers all over the world may be lighting up joints to celebrate the fact that Uruguay on Tuesday became the first country in the world to legalise cannabis completely – from planting the seed to getting high.
But is what President José “Pepe” Mujica openly admits is an experiment going to work? Will Uruguay succeed in reversing rising crime rates, which were the initial impetus and justification for the new law? Read more
China’s interest in Latin America is clear: the region supplies the raw materials it craves and handily also provides markets for its manufactured goods. But Latin America, understandably, doesn’t want that to be a one-way street.
Enter José Mujica, possibly Latin America’s bluntest-talking president, and current chair of the South American Mercosur trade bloc. What Mercosur needs, he reckons, is a common external tariff on Chinese goods because otherwise, the bloc has no hope of competing. Read more
Philip Morris International, the makers of Marlboro, the world’s best-selling cigarette brand, has won the right to take its case against marketing restrictions and graphic health warnings in the South American country to the World Bank’s arbitration tribunal, ICSID. Read more
Uruguay’s leftist former guerrilla president, José Mujica, is renowned for telling it like it is. Which is why he doesn’t mince his words, in an interview with the Financial Times, highlighting why he is working on port and rail plans with one of his big neighbours, Brazil and, er, nothing with the other, Argentina. Read more
Montevideo’s stock market – get ready. Union Agriculture Group, one of Uruguay’s top landowners and Latin America’s biggest farm firms, is finally ready for its long-awaited IPO.
There have been a couple of changes of plan along the way. The agricultural powerhouse scrubbed a $287.5m New York launch in 2011 because of poor market conditions. Now it plans to make its market debut through a $50m to $100m domestic listing, probably in late April. Read more
Don’t export to Argentina; trade relations are at their worst ever.
That, anyway, appears to be the stark view of Uruguay’s vice president and economy minister. Read more
It looks like being a good year for Union Agriculture Group. While the name may not ring too many bells internationally, the Uruguayan agricultural powerhouse is one of the country’s top landowners, with sales posed to more than triple this year.
The company had planned to become the first Uruguayan group to list in New York, but had to scrub its $287.5m IPO in 2011 because of poor market conditions. However, it has now raised $110m to fund its development plans, and is positioning itself as a key company for investors in an attractive sector in Latin America: farming. Read more
Uruguay provides many things to many Argentines but perhaps they can be summed up as follows: beaches, banks and business.
This relationship has long been mutually beneficial – Argentines get access to the dollar and holidays that are this year cheaper than usual as Uruguayans seek to lure Argentines despite foreign exchange controls, while Uruguay gets money flowing in and investment.
But are the ties that bind getting too close for comfort? Read more
If you’re ever in any doubt about which countries Brazilian companies are looking to for expansion, just follow the money, or rather the banks.
After buying a US lender last year to cater for the growing number of Brazilians setting up home in Florida, state-controlled Banco do Brasil is now targeting the rest of Latin America and China. Read more
Place your bets … Chilean casino operator Enjoy is staking $140m on the purchase of a casino in Uruguay’s ritzy Punta del Este resort.
Announcing the deal, Caesars Entertainment Corporation, which is selling the controlling stake in Uruguayan hotel and casino operator, Conrad, to Enjoy, called Latin America “one of the fastest growing casino gaming markets in the world”. Read more
We all like a little praise now and then. Uruguay must be beaming.
The International Monetary Fund wrapped up its annual Article IV review of the country’s accounts last week with lavish praise. Read more
Uruguay has announced price controls on a host of supermarket staples to try to rein in inflation. That’s the kind of thing neighbouring Argentina often does.
But spot the difference. Uruguay is actually concerned about inflation, for one thing. Read more
It’s a tough time to be a pulp producer – something at which South America excels: the eurozone crisis sent demand for paper plummeting in the second half of 2011 and things look set to remain bleak for a while with three major new projects due to come onstream in Brazil and Uruguay in the next year boosting supply further.
So Latin American companies – Brazil’s Fibria is the world’s biggest pulp producer and Chile’s Arauco and CMPC are also in the top five, with Brazil’s Suzano about seventh – would have to be mad to think of unleashing yet more capacity on a depressed market, wouldn’t they? Maybe not. Read more
Uruguay is a little country with more cows than people (by a ratio of more than three-to-one).
Yet it is a dairy export powerhouse, now increasingly looking to compete in New Zealand’s backyard – Asia. Read more
The world is used to analysing the impact of China’s slowdown. But what about that of another large emerging economy, whose influence also stretches beyond its borders?
Well, it will come as no surprise that Brazil’s slowdown – from 7.5 per cent in 2010 to 2.7 per cent in 2011 and a forecast 1.5 per cent this year – is hurting neighbours Argentina and Uruguay, where growth generally follows the same cyclical trends. (See chart after jump) Read more