If green Uruguay's thriving, why not pay attention?
From carbon-neutral cattle ranches to tech law innovation, it's an interesting prospect
The SCALED adventure began with treatments of the West’s food and energy supply grumbles. Once-flush nations are going somewhat short. Who could make gains? From across the Atlantic a tiny Latin-American country has caught our attention. It’s verdant, low-crime and seemingly thriving. There being only 3.5 million of them, the nation is an unknown quantity to many, particularly non-Spanish speakers. We’re talking about Uruguay.
Given its strong socialist tradition, well-educated workforce and meaty free market economy, a fair comparison could be the likes of Sweden. It’s better known as Latin America’s answer to Switzerland, a piggy bank for well-heeled Argentine neighbours. You can see why: over the last 20 years growth has been remarkably steady. Even 2009 was recession-free. Citizen freedoms are well protected and plenty of tax-breaks on offer. ‘Free zones’ attract thousands of multinationals seeking to open regional offices and distribution centres. In 2019 they exported $5.9 billion’s worth of goods and services.
When it comes to produce, Uruguayans make the marriage of tradition and modernity seem effortless. On water-rich land old-world cattlemen are husbanding the sustainable meat market of the future. Largely it’s grass-fed, hormone-free and traceable. Uruguayan carbon-neutral beef stocks the shelves of Japanese supermarkets and appears on the menu of German restaurant chain Blockhouse. Last year, beef and forestry exports rose by about 50% and this year a record haul is in the offing for the hardy, horse-loving gauchos.
The real estate market attracts foreign investment. Renminbi as well as Argentine pesos are supposedly pouring in. China, Uruguay’s number one trading partner since 2013, has been snapping up meat processing facilities. In the Uruguayan capital, Montevideo, a $200 million fishing port was planned for Chinese vessels—now tangled in a knot of environmental controversies. Between 2001 and 2014, the value of Uruguayan land ballooned from $413 to a $3,900-and-up, since steadying.
Speaking of steady, almost 95% of Uruguay’s energy comes from a potpourri of its own renewables, says The Guardian. Just over 20 years ago, oil made up 27% of national imports. Western Europe should watch this experiment closely. Of course one ought to entertain healthy doubts about how new systems will provide into the future. For the moment, the transition seems to suit Uruguay down to its fertile ground.
Look at the lively tech sector, which recently produced several billionaires, an exceptional feat for such a small nation. Kudos goes to Universidad ORT, a Montevideo university set up for Jewish migrants fleeing postwar Europe. Last June, the Uruguayan President, in global contemporary fashion, tweeted congratulations to four ORT alumni. Their fintech venture dLocal had made history with its NASDAQ debut: the first Uruguayan company to go public in the US.
And what a debut! The two founders and an early investor in the cross-border payments firm became billionaires. Those three plus the near-billionaire 30-something CEO may be worth $10 billion, more than one-fifth of national GDP in 2020.
Is there something quintessentially Uruguyan about dLocal’s success? The founders think so. In close-knit comunities, networking is a less forced affair. The necessity to go beyond the local nourishes creativity, in regulation as well as business.
Agustina Pérez Comenale, a charismatic lawyer appearing regularly on TV and radio, is a tech prominent. ‘In Uruguay we are already moving to regulate virtual assets,’ Pérez told SCALED. ‘It would be great to see Montevideo become a major tech hub.’ She recently founded Metalaw, an informal group of Spanish-speaking attorneys collaborating on tech law projects. Together with Mercedez AremendÃa, the youthful President of government communications agency URSEC, Pérez also steered the launch of Cryptotracker, essentially a wiki to track changes in crypto market regulation across the globe. ‘I get owners of virtual assets coming to me with questions about tax and legality all the time. The aim is to democratise that information.’
In the conservative world of law, Pérez and her colleagues have marked themselves out as forward-thinkers. Will Uruguay lead the regulatory pack in South America and even beyond? Time will tell.
On the downside, Uruguay suffers from a stubbornly high rate of inflation and competition from workers in low-wage economies for remote jobs. Then again, Montevideo is far from the only government faced with these dilemas. In Japan, inflation this year is expected to hit 2%, after basically being zero for 30 years. In the US, tech companies want to price employees’ wages based on their proximity to the office.
Increasing regulation and socialist ideals inspire criticism on the right, even from long-term foreign residents otherwise enjoying a peaceful life and exceptional Uruguayan wine on the outskirts of the uber-exclusive playground of Punta.
Altogether, an unusual spot. Uruguayan entrepreneurs appear nonplussed by supply-chain snarl-ups. Moneymen are actually betting on food inflation. With its very own, hopefully reliable supply of energy, Uruguay may be in an envious position to benefit from foreign mishap.
A possible safe haven, it seems to SCALED. Why leave it to wealthy Latinos and Chinese industry?