In the press: Uruguay is always there, it has the advantage that it is stable - El País

The Executive Director at TMF Group in The Americas, a global provider of business services for clients operating and investing globally, said in an interview with El País that investors maintain interest in Uruguay, although at this moment Argentina is the one that leads the enquiries.

He pointed out that the government's fiscal adjustment "has not been a very broad reform", so it does not worry investors. He stressed that the regional situation is "much more solid" than eight months ago.

How do you see this fiscal adjustment project that has just been approved?

The government is trying to cope with the situation and taking into account that the income will be subject to pressure, it is a modality that every administration has to recover revenues and face their responsibilities.

What do potential foreign investors say about it?

It has not been a very broad reform, it does not change in all areas. This lowers the concern of international investors. It is true that changes in fiscal rules, usually to international investors, is like changing the rules of the game. And if they are about to invest, they try to analyze well the impact that may have and that can delay the investment and if they already invested, surely they can estimate: "The rules of the game have been changed and now things are not as attractive as before.”

Is Uruguay still on the radar of investors or are they looking more at Argentina now?

Clearly, Argentina has changed the perspective: from being a country where people thought twice before investing to an environment of hope today. Anyway, Argentina sees the light at the end of the tunnel, but it is still not clear how much distance is left until the end of the tunnel. The advantage that Uruguay has in that sense is that, whether good or bad, it is always a very stable country, there is a lot of transparency, and historically it has been favourable to foreign investment.

For good or for bad, they are much more stable and stability is something that gives international investors a lot of peace of mind, and surely if they have to invest, they think long before investing in a country that today can be up but tomorrow down, in contrast to a country that maybe will not be super high, but clearly will never be super down. That is the advantage that Uruguay has. As part of the Mercosur, they give a doorway to anyone who wants to sell to the region, even if it is not invested in Brazil or Argentina.

Even with these difficulties that Mercosur is going through?

Yes, yes, because Mercosur has difficulties, but the existence of Mercosur is a sign of economic potential for the region. Clearly the countries are going to try to defend their interests, but I think that no one is going to break the deck and say "I do not want to continue with Mercosur".

The fact that the Federal Reserve has delayed the interest rate increases helps the emerging ones remain attractive?

Yes. It would have been a very hard strike if the first rise had taken place at the beginning of the year, because the situation of the emerging ones was more complicated.

What can we expect for 2017, when the Fed raises rates?

There is a certainty that interest rates will raise. Clearly it will affect emerging countries. However, the fact that Brazil has hit the bottom, that there is hope in Argentina, which are large trading partners, can cause that despite the rise of interest, the situation in South America begins to improve. Compared to 2015 when there was very little interest from foreign companies to position themselves in Argentina, we are seeing a lot of interest from European and North American companies. The situation is much stronger than eight months ago.

What is the Latin American star for investors?

At this moment, the star is Argentina. It is from where we receive more questions, but not necessarily people who are willing to invest. Interest in Brazil has slowed down. Peru maintains good levels of interest, and with Uruguay, it is the country that perhaps has lost the least interest. Ecuador has suffered because it is closely linked to the oil issue. Colombia is almost with Peru and Uruguay, as those who have more interest. Uruguay is always there. Customers who ask for information, who want to open a business, are more or less the same year after year, while there are much more changes in Argentina and Brazil.

In Uruguay, in which areas do you receive the most interest?

There is a lot of interest in free zones. Uruguay as a market in itself is very small, but it’s positioning regarding the two monsters of the region makes it very attractive to use it as a springboard of investment towards Brazil and Argentina. From within the region, in our Complexity Index, it is the one that is better positioned. That makes them tremendously attractive.

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