Uruguayan president Jose Mujica ratified this weekend before 1.200 businesspeople that his administration will keep the course and ‘reliability’ of the current economic policy, although this will not impede “changes that may surface consequences of the moment”.
Mujica, 75, former guerrilla leader and who has been in office since March 2010 cautioned that the impacts of the North African crisis, Japan’s nuclear spill and the slow European Union recovery could have an impact over the local economy, thus the Uruguayan administration will take special precautions during the coming months.
Business people from Argentina, Brazil, Chile, United States and the EU, as well as former leaders followed closely the words of President Mujica and Vice-President Danilo Astori (who was Economy minister during the previous government) at the second edition of the event organized by the main River Plate commerce chambers: “Uruguay, a country of opportunities and certainties, to continue growing with security and equality”.
Mujica ratified his commitment of a year ago, (February 2010) when he promised “not to kill the hen of the golden eggs”.
Mujica and his government have been under permanent attack from his own ruling coalition, particularly the Communist party which wants changes to the current policy by taxing windfall earnings, lower fiscal incentives and ‘better’ distribution through the national budget.
The Uruguayan president said he was ‘perfectly’ aware of how capitalism works and of capitalist rules, and that no ‘altruism’ is involved since the objective is “to multiply wealth and reproduce” He added “you have to call things by their name and that is why current policies will remain as they are as long as we can”.
“We have no plans to drastically modify current fiscal policy and if changes are introduced they will only be to adapt to a new reality and not after extraordinary revenue”, underlined Mujica who then exemplified with an African anecdote.
“Africans know that you don’t kill a milking cow because it’s more food productive, day by day, spurt by spurt, than a one time banquet if they commit the mistake of eating the cow. This we have very clear”, said Mujica.
“We have committed mistakes but we are delivering what was promised”.
Vice-president Astori also had a similar message promising “enormous fiscal prudence” and no elimination of investment stimuli.
“We are committed with the course and the orientation of current economic policy”, however this does not mean ‘no changes’: if reality changes we are obliged to change but “this is not the same as changing course or orientation”.
Astori said fiscal stimuli have been crucial for the development of Uruguay and revealed that the fiscal review under consideration only point to “modernization and further empowering it”.
Fiscal prudence is crucial, said Astori who promised no revenue increase from taxes but rather a more rational and effective use of resources to improve Uruguay’s infrastructure, one the main challenges.
The two leaders pointed out that investment in Uruguay has reached an extraordinary 20% of GDP, but the target is 25%, and mentioned that “two or three mega-investments are waiting to be accomplished” which could give a 3 to 4 billion USD boost to exports.
The overall response from those attending the event was that it had been a positive evening and they trust Uruguayan authorities will keep to what was announced: clear rules of the game; long term policies and political stability.