What does Uruguay have in common with Switzerland, Monte Carlo, Amsterdam, and Napa Valley? Well first, Uruguay has been called the “Switzerland of South America” because of its robust, sound, and private banking system. Thousands of people around the planet place their cash in Uruguayan banks.
But new titles may emerge as well such as the “Monte Carlo of South America” (Punta del Este with gambling and beaches) or “The New Amsterdam of South America” (legalized marijuana), or maybe the “Napa Valley of South America” (growing wine exports). All of these titles could apply.
However, Uruguay continues to garner the headlines with positive reports regarding the agricultural economy, specifically regarding major crops, cattle, wine, and marijuana exports that are on the rise. The economy still grows with a 6.5 % growth rate for 2013 and a lower but respectable 4% growth rate predicted for 2014 (here). Unemployment is still around 6.5% but that is traditionally lower than it has been in the past.
Most of world already knows Uruguay exports significant amounts of beef, but relatively new on the scene is a large increase of wine exports to the world (here). Napa valley and other wineries throughout California have experienced lots of drought in the past several years. Yes, that can make a better wine, but there are limits as the drought continues. You might want to ask your waiter next time if they have some Uruguayan wines, you might be surprised.
The Heritage Foundation, a conservative think tank in Washington D.C., has ranked Uruguay number 38 out of 178 countries on their recently published 2014 Index of Economic Freedom in the world (here). The Heritage Foundation defines economic freedom as:
Economic freedom is the fundamental right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please. In economically free societies, governments allow labor, capital and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.
Chile is the only Latin country ranked above Uruguay at number 7. The U.S. is ranked number 12 – falling out of the top ten this year. Hong Kong, Singapore, and Australia were ranked number 1, 2, and 3 in that order. Some of the countries ranked below Uruguay are: Israel (44), Peru (47), Spain (49), Costa Rica (53), Mexico (55), and Brazil (114).
An international law firm (Fischer & Schichendantz) in Montevideo, Uruguay keeps tabs on the development of that country and you will see that Uruguay over the last ten years has been improving as a serious alternative both for investment and residence compared to the rest of the developed world (here). Even the well known conservative investor, Jim Rogers, has spoken very highly of Uruguay’s investment environment (here).
So if you like to eat tasty lean grass fed beef and fresh seafood, drink fine inexpensive wine, live securely, invest well, and have an option to visit the local “Monte Carlo” (Punta del Este) from time to time, Uruguay is the place.
Uruguay’s European culture focuses on living well – with all that it means – i.e. both corporate and family owned shops, healthy food, health care, social services, tax supported education, art, music, and the art of playing well (here, here).
It also focuses on throwing out laws that cause more problems than they solve – i.e. marijuana laws (here). But gringos beware, this is not Amsterdam in that sense.
In an unprecedented move, the government of Uruguay has decided to regulate the legal production, distribution, and use of marijuana for its citizens. Historically, it’s the first country in modern history to attempt such an ambitious plan.
In short, the nation of Uruguay has decided to cut out the middleman, and make the state the regulator of the marijuana trade in an effort to drive the criminal element out of business and create a tax base for social services. Although I am not pro drug use – legal or otherwise, it seems that Uruguay’s ambitious plan will attempt to deal realistically and systematically with the illegal drug trade and all the corruption and violence that comes with it. Even if it doesn’t succeed, it will at least lay a foundation for a much saner approach to the business of illegal drugs – and in that sense, Uruguay is a pioneer.