A stable economy: a challenge and a responsibility
Uruguay, a stable and thriving country, became the most prosperous economy in South America in terms of GDP per capita in 2022, surpassing Chile somewhat. With a favorable investment environment and excellent economic performance over the past decade, it has become a reliable destination for investors from around the world. Some even assume that it could become the new Singapore of Latin America: the new Mecca for entrepreneurs and startups. Moreover, although the economic crisis due to the Covid-19 pandemic has had a negative impact on its economy (in 2020, its GDP dropped by 5.9%), Uruguay has nevertheless managed to maintain its place among the richest countries in South America. However, despite this economic prosperity, it still faces some obstacles to consolidate its growth. For some years now, Uruguay has been facing persistent economic problems such as a lack of competitiveness, galloping inflation that exceeds the government's target every year, rigid labor laws, a large administrative bureaucracy and high production costs. In addition, the country faces a major challenge due to the growing demand for skilled labor, which highlights its lack of skills and human capital. Because the Uruguayan economy has important links with Argentina and Brazil, shocks originating in neighboring economies often spill over to the Uruguayan economy. The country's foreign policy has undergone significant changes since President Lacalle Pou took office. He aims to strengthen Uruguay's presence in international trade by making Mercosur more flexible. The negotiation of a free trade agreement could allow the country to find direct trade agreements with other nations or economic blocs and thus open up more to the world.
Frozen beef is the main export product and a real pillar of the economy. It is followed by wood pulp, rice, condensed milk and soybeans. These exports are mainly destined for China, which accounted for 28% of the country's total exports in 2021, followed by Brazil, the United States, the Netherlands and Argentina. In 2022, major port and rail infrastructure developments are underway as the Finnish company UPM builds its second pulp mill in Durazno County. The mill will be able to produce 2.1 million tons of eucalyptus pulp annually. The railroad linking Durazno to Montevideo is one of the most important infrastructure projects in the country's history. An environmental dispute between Uruguay and its neighbor Argentina arose when two companies - Finnish and Spanish - announced plans to build pulp (cellulose) mills along the coastline of the Uruguay River that separates the two countries (at Fray Bentos to be exact). Argentina immediately expressed its dissatisfaction with the probable contamination of the water and regretted that Uruguay had not consulted it on the matter (an international treaty from 1975 stipulates that the two countries must consult each other on all matters relating to the River Uruguay). For more than two years, roads and bridges were blocked, diplomatic relations between the two countries were strained to the extreme, complaints were filed in international courts (on July 13, 2006, the International Court of Justice ruled in favor of Uruguay, but on January 23, 2007, it dismissed Uruguay's complaint against Argentina), at the OAS (Organization of American States), and then third countries were asked to arbitrate the conflict.
South American Renewable Energy Champion
Today, Uruguay can boast of being one of the greenest countries in the world, along with Denmark, Iceland and Costa Rica. From the 1940s onwards, its electricity came mainly from thermal power plants and hydroelectric dams. Oil and its derivatives were entirely imported. By the 1990s, the country was largely dependent on these two sources of energy. The instability of commodity prices affected both the economy and the lives of its inhabitants, who suffered daily power cuts. In 2008, Ramón Méndez, then national energy director, announced his plan to transition to renewable energy throughout the country. And although it may have seemed unrealistic, by 2016 Uruguay was seeing the emergence of some 50 wind farms, biomass plants and solar power plants, which immediately replaced oil production. Obviously, this transition has resulted in a significant reduction of the national carbon footprint while reducing the country's annual budget by more than half a billion dollars. The share of renewable energy in the final energy consumption has increased from 44% in 2011 to 98% today, ranking it among the best countries in the world in terms of green energy. It should be noted that in recent years Uruguay has been producing so much renewable energy that it is able to export it to its South American neighbors, Argentina and Brazil. In 2021, export revenues from renewable energy accounted for $529 million, making electricity the sixth most exported product in the country. Finally, it is worth noting that Uruguayans have never gone out into the streets to demonstrate for the climate and have never demanded concrete action against global warming. All the government has to do is reconsider the issue of its dependence on oil and invest in energy infrastructure, without subsidies or additional costs for consumers.
Environmental protection and protected areas
The protection of the ecosystem and biodiversity at the national level is guaranteed by the Ministry of the Environment, which is responsible for overseeing the conservation areas. In 2000, a law was passed establishing the National System of Protected Areas (SNAP) as a public interest. Since its establishment, a network of 17 protected areas (PAs) has been gradually established. By 2021, the area protected by SNAP was 334,125 hectares, representing 1.05% of the territory. It goes without saying that these areas encourage the promotion of responsible ecotourism and awareness of the country's ecological heritage. Their objective is to generate opportunities for local communities through recreational, educational, research and development activities, which of course are compatible with conservation. Here is a list organized by department of the areas protected by the government:
Colonia. Parque nacional Isla San Gabriel: Facing the city on the Río de la Plata, this 24-hectare island has a multitude of trees and shrubs, and was declared a national park in 1995.
Soriano. Bosque Nacional del río Negro, Grito de Ascencio, Parque nacional J. A. Lavalleja National Park.
Flores. Paisaje protegido Localidad Rupestre de Chamangá: a hidden treasure of immense archaeological wealth, since it is the place where the greatest number of rock paintings in the country are concentrated.
Río Negro. Parque Nacional Esteros de Farrapos and Islas del Río Uruguay: more than 6,300 hectares of coastal marshes with 24 islands and islets.
Paysandú. Monumento Histórico Meseta de Artigas: the largest monument in honor of José Artigas. Montes del Queguay: one of the largest natural forests in the country and an important archaeological area.
Rivera. Parque Natural Valle del Lunarejo: a circuit of about 20,000 hectares with slopes, caves and waterfalls, surrounded by intact tropical vegetation. Laureles-Cañas: a territory of 62,500 hectares with canyons, cliffs, waterfalls, as well as various meadows and marshes (also of great cultural value due to the traditional activities that are practiced there and the survival of an original dialect of the region, Carimbau).
Treinta y Tres. The protected landscape Quebrada de los Cuervos.
Lavalleja. Parque Nacional Arequita: 950 hectares, 11 km from Minas, where you can observe native fauna and flora; Cerro Arequita reaches 230 m and overlooks magnificent caves.
Rocha. Parque Nacional de Santa Teresa: near Punta del Diablo, a beautiful 3,000-hectare reserve with native flora and fauna, a fort, aviaries, greenhouses, semi-liberty animals, a camping area and a beautiful beach. Parque Nacional Fuerte San Miguel: in the northeast of the department, close to Brazil, 1500 hectares with volcanic mountains and rocks, a fort, and an abundant fauna and flora. Parque Nacional Cabo Polonio: popular resort, offering visitors the opportunity to explore its pristine beaches, famous dunes, indigenous forests and rocky cliffs. Laguna de Rocha: declared a biosphere reserve by UNESCO, this is one of the best places for bird watching. Laguna de Castillos: nesting site for more than 200 species of birds.
Maldonado. Parque Nacional Lacustre: 72 km2 of lagoon near José Ignacio, La Laguna Garzón and Rocha; more than 200 species of birds can be found there.
Montevideo. Parque Natural de los Humedales del Santa Lucía, having joined SNAP since February 2015. Parque Nacional Isla de Flores: the first marine protected area in the country.
Canelones. Parque Nacional F. D. Roosevelt (ex-Carrasco): largely planted with acacia, pine and eucalyptus trees, this 370-hectare park is a stone's throw from the airport and Ciudad de la Costa, and includes an artificial lake.
