Friday, February 15th 2013 - 23:13 UTC

Financial Times: Argentina-Uruguay: too close for comfort?

By Jude Webber - On Thursday 14 February the prestigious Financial Times published a piece pointing out the influence of Argentina on Uruguay and its economy. The article is simple and straight and is valid because of the Financial Times unquestionable opinion building capacity, and thus merits reproduction.

The three ‘b’ according to the FT, beaches, banks and business

Mujica: I grew up in a country with 70% and 80% inflation

Uruguay provides many things to many Argentines but perhaps they can be summed up as follows: beaches, banks and business.

This relationship has long been mutually beneficial – Argentines get access to the dollar and holidays that are this year cheaper than usual as Uruguayans seek to lure Argentines despite foreign exchange controls, while Uruguay gets money flowing in and investment.

But are the ties that bind getting too close for comfort?

Uruguay is also getting some unwelcome downsides: imported inflation, the prospect of economic contagion and a risky dependency on its bigger (but rockier) next-door neighbor, according to Simon Black, self-styled “investor, entrepreneur, permanent traveler and free man”, on his blog.

For Uruguay …, it means the property sector is dominated by Argentine buyers. The banking sector is dominated by Argentine capital. The tourism sector (Uruguay’s mainstay) is dominated by Argentine vacationers. It’s a precarious dependency.

Today, Argentina is imploding… the product of years of disastrous government policies heading for yet another full-blown currency crisis. And as the Argentine economy suffers, it is bleeding into Uruguay.

One of the chief consequences is inflation. As Uruguay imports inflation from both Argentina and United States simultaneously, retail prices from food to fuel to electricity have soared.

Ouch. José Mujica, Uruguay’s president, is well aware of that not inconsiderable problem – inflation is running at some 8.7% a year, and is one of his government’s top concerns. But he is upbeat, saying recently:

There’s no big deal with inflation, it can be reined in and we are going to fix it. I grew up in a country with 70% and 80% inflation.

But perhaps Uruguay can take heart in its business edge over Argentina. Farm groups have quietly been looking at spreading some of their Argentine exposure into Uruguay for some time. Here’s why: according to a study by Confederaciones Rurales Argentinas a farmers’ group, tax pressure and official policy is wiping out the gains Argentine farmers used to enjoy.

As El Cronista Comercial, an opposition business paper reported:

One example which illustrates the difference in business in both markets is the difference between prices paid to producers … While producers in Argentina were paid 376 dollars for a ton of soybean, in the neighboring country the price was 495 dollars.

Adding insult to injury, Montevideo now ranks as South America’s best city to live in, outpacing the Paris of the South over the River Plate, according to a recent study by consultancy Mercer. Perhaps for Uruguay, the pluses of having Argentina next door are still bigger than the minuses.

56 comments Feed

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1 XAVIERV (#) Feb 15th, 2013 - 11:48 pm Report abuse
Uruguay will always be the second province in Argentina ..
2 CaptainSilver (#) Feb 16th, 2013 - 12:14 am Report abuse
I am shorting Argentinean company shares. When the crash comes should be quids in.
3 redpoll (#) Feb 16th, 2013 - 12:29 am Report abuse
@1 Eff off you arrogant porteno. Just try it mate and you may find you have bitten off more than you can chew
4 surfer (#) Feb 16th, 2013 - 01:14 am Report abuse
'Today, Argentina is imploding… the product of years of disastrous government policies heading for yet another full-blown currency crisis. And as the Argentine economy suffers, it is bleeding into Uruguay.'

5 C0nqueror (#) Feb 16th, 2013 - 01:17 am
Comment removed by the editor.
6 Vestige (#) Feb 16th, 2013 - 01:19 am Report abuse
”The tourism sector (Uruguay’s mainstay) is dominated by Argentine vacationers.“

Malvinas dispute is a passion in the heart of a great great number of Argentine ”vacationers”. As we all know.

There will be a late spring/early summer when a proper strong direct call is made to specifically not allow cruises in any way associated with Malvinas into Montevideo. It will be front page in all Argentine and Uruguayan newspapers. With a S.A solidarity angle. 'Don't let us down good friends and neighbors' type deal.

The tourism cash implications will decide where Uruguayan loyalties lie.
And that'll be the end of 90% cruises to the ....islands.
(P+O excepted)
7 surfer (#) Feb 16th, 2013 - 01:24 am Report abuse
#5. Spot the obvious mistake in the name... clue 'It's a zero'
8 C0nqueror (#) Feb 16th, 2013 - 01:29 am
Comment removed by the editor.
9 redpoll (#) Feb 16th, 2013 - 01:30 am Report abuse
@7 Usual Sussie trick. She should really stick to her own professional tricks
10 surfer (#) Feb 16th, 2013 - 01:31 am Report abuse
#8 utterly utterly pathetic, trying to hide behind another name, do one.
11 C0nqueror (#) Feb 16th, 2013 - 01:34 am
Comment removed by the editor.
12 surfer (#) Feb 16th, 2013 - 01:38 am Report abuse
#11 C0nquerorConqueror

Do ya see that, yellow?
13 Islander1 (#) Feb 16th, 2013 - 01:38 am Report abuse
6 vestige- what planet are you on? Montevideo is doing very nicely thankyou as a result of Buenos Aires silly attitude over cruise vessels.
Mujica backs Arg claim- yes - but also he is on public record stating that he will have no part in any economic blockade as it would be against human rights.
14 C0nqueror (#) Feb 16th, 2013 - 01:54 am
Comment removed by the editor.
15 Vestige (#) Feb 16th, 2013 - 02:14 am Report abuse
What planet?
You really don't see the connection between Arg's attitude and influence on small/medium Uruguayan tourist business - and falklands cruises reliance on that one port?

You don't think its a realistic scenario that if the opportunity arises the Uru govt opposition* might use such a possible event to swing votes?

*or next presidential candidate, he's 77 (i.e wont be coming back) and elected in 2010.

Montevideo is doing very nicely?
Nicely enough to laugh about a drop in tourism? (world first)

Granted its only a possibility - but - its a viable option.
New presidents due in both countries.
“human rights” quote not guaranteed to return at that time.

Which planet you say.
16 reality check (#) Feb 16th, 2013 - 08:00 am Report abuse
He/she doing what they always do, making threats, only he/she is forgetting why most of them are now going there in thethe first place! $US.
17 ChrisR (#) Feb 16th, 2013 - 10:25 am Report abuse
Vestige shows not even a vestige of intellect if he / she thinks even Pepe is that stupid to endanger the cruise tourism industry: it's worth many times what we will get off the argies this year.

Subsidised IVA, special rate for the arse wipe, special rates in hotels, special rates in supermarkets, all these benefits are not accessible by the locals.

It must have worked because I do not recognise the comment recently that there were fewer argie cars in Punta Del Este. I tried to park on Tienda Inglesia at the Shopping Centre and had a right job due to argies cars littering the place.

Why is it that not only can they not drive on the right but they cannot park their cars within the lines. Probably got something to do with their arrogant attitude.
18 Steveu (#) Feb 16th, 2013 - 10:49 am Report abuse
@9 Does that involve ping pong balls in some way?
19 Islander1 (#) Feb 16th, 2013 - 01:30 pm Report abuse
Vestige- try some facts then:
One majot cruise line has already blacked all Arg ports because of their threats.

2 others have warned BA that if trouble continmues then they will move all their operations from BA to Monte or south Brazil next summer.

Puerto Madryn has made it clear it welcomes ALL flags etc - it is business!

Ushuaia this year has calmed down - has a “pirates” sign up - but quietly signs ships in and out to and from the Islands - it is Business.

Punta Arenas is getting increases in cruise numbers - and further port improvements underway.

get the real picture? - Buenos Aires are being silly.
20 redpoll (#) Feb 16th, 2013 - 01:58 pm Report abuse
@18 Steve Would know about the ping but the balls it posts certainly pong!
21 Conqueror (#) Feb 16th, 2013 - 02:31 pm Report abuse
@1 Oh dear, yet another war you lost! Trying to grab Uruguay from Brazil.
@5 Not me. First time I've come to this article! Same for 8, 11 and 14.
@17 Have to admit that I would no more visit Uruguay than I would argieland. Same reason. Too many argies. At least where I live, there's little chance of an argie being within 40 miles. It seems Londoners aren't so picky.
22 Pirat-Hunter (#) Feb 16th, 2013 - 05:48 pm Report abuse
In conclusion the benefits surpasses the minuses. All this reports challenging Argentina's self determination will only drive a wedge between the Latins and English, this is good for Latin Americans to open their eyes and confirm who their real enemy is. CIA is having a field trip with the cocain trade in Colombia and Mexico, while the english man is worried about the mighty economy and the dollars he sends to pay for his cocaine trade. I think drug trafficking is much more of a problem then the economy BS we get spoon fed, getba life people there are more important things to deal with like gun trafficking and drug trade.
23 XAVIERV (#) Feb 16th, 2013 - 06:09 pm Report abuse
What is it like horse meat?
24 yankeeboy (#) Feb 16th, 2013 - 06:11 pm Report abuse
Oh I figured I was next.
25 XAVIERV (#) Feb 16th, 2013 - 06:26 pm Report abuse
Someone could send me these stamps by mail? Prepay by “Paypal”, I have a verified account in USA ..
26 Steveu (#) Feb 16th, 2013 - 06:42 pm Report abuse
@26 Philately will get you nowhere! ;-)
27 Pirate Love (#) Feb 16th, 2013 - 06:50 pm Report abuse
@24 you should know its sold in argentina as spicy sausage, salami, pastrami, chorizo, Some Argentine chorizos include other types of meat but not “typically” beef, along with donkey. oh didnt you know?? thats right your government has no checks on your food so you believe your eating beef, so you tell me how did it taste?? EEEEE-AWWWW!!!

Since Horse has been detected in ever so tiny amounts i have been buying burgers by the dozen as i have always wanted to try horsey burgers and personally i am glad this has come to light, Im sick of eating steaks,angus burgers, beef caseroles....
I want Horse! two thirds off the world are eating it, and the rest like XAVIERV dont know they are eating it.
28 Nostrolldamus the 10th (#) Feb 16th, 2013 - 06:55 pm Report abuse

Sorry to tell you but Europeans mislabelled the mislaballed beef. It is not horse but rather donkey.
29 golfcronie (#) Feb 16th, 2013 - 07:50 pm Report abuse
Confirmation of burgers for sale in BA
All our horse burgers contain horse meat, we do not add beef to our horse burgers.
30 Nostrolldamus the 10th (#) Feb 16th, 2013 - 07:55 pm Report abuse
Why do you foreigners always have to lie or bring stories about Argentina when there is bad news about your countries? Don't you find it a bit defensive and lacking self-esteem?

Just admit you have f-ing problems, don't bring the problems of others in order to compensate by trying to say “see, you are also screwed”. It shows such lack of confidence.
31 Joe Bloggs (#) Feb 16th, 2013 - 08:33 pm Report abuse

We've told you loads of times that of course we have our own problems and we discuss them, defend them, criticise them, cry about them. shrug our shoulders about them or whatever. All on the news sites that cover them You seem intelligent enough to find them yourself but let me know if you'd like some links.

However, this is Mercopress and its scope is the South Atlantic and in particular South America and the Falklands. That's why we talk about it. I only talk about Argentina because of its stance against my country. A stance I know you don't support.

Get over your self-pity and grow a pair.
32 golfcronie (#) Feb 16th, 2013 - 08:38 pm Report abuse
Why should we not show lack of confidence in your country, it's going down the pan and you know it
33 Cruzansailor (#) Feb 17th, 2013 - 01:03 am Report abuse
The mere mention of the lunatic Simon Black in the financial time makes the whole article ludicrous. A homeless stateless paranoid schizophrenic like his contemporary in Argentina, Dave vonKleist. The sovereign man. Hahahaha. If he is so sovereign and America hating, why does he price all his whack job seminars with the US$? Hypocrite and liar. Shame on the usually unreliable Financial Times for having reached another low
34 Troy Tempest (#) Feb 17th, 2013 - 01:41 am Report abuse
@30 Arifu/TTT

“Just admit you have f-ing problems, don't bring the problems of others in order to compensate by trying to say “see, you are also screwed”. It shows such lack of confidence.”

We could say exactly the same to you.

God, this is exasperating. Shut the h£ll up!!

Every thread with you in it, has you goading the UK/US Alliance with wacko or inciteful barbs to get our attention or pity!

Have you no dignity???

You are like a child flopping himself down in a supermarket aisle, pouting or having a tantrum, “ look at me !! Feel sorry for me!! Everyone is mean to me!! I am smarter than you!! Why can't I have this???”

I think the response is, “if you want to be taken seriously, and you want to treated like an adult - act like one!”

Nobody is prepared to listen to you anymore. Nothing changes.

You threaten to “go away”, with a pouty,“ I'm gonna leave and never speak to you again, then you'll be sorry!!”, but you never do.
The next screaming fit is, “ we don't need you, Argentina doesn't want to play with you - go away!”
God, it's too funny, but you never stop.

Anglotino has seen you for what you are and has stated he'll never bother to respond again. The rest of us are about to follow.

Honestly, Ivthink you are so addicted to Mercopress and the attention here, that you can't live without us. How's that for irony.

Go get a girlfriend, or at least a hobby - snort cocaine, do anything!!
35 Sussie.US (#) Feb 17th, 2013 - 03:07 am
Comment removed by the editor.
36 Nostrolldamus the 10th (#) Feb 17th, 2013 - 03:53 am Report abuse
They've been crying all day today due to the fact I humiliated them this morning by exposing their puerile, prolix, and emotional multi-paragraph harangues for what they were: cries of impotence and sour sports.
37 Troy Tempest (#) Feb 17th, 2013 - 04:18 am Report abuse
@36 TTT/Arifu

“They've been crying all day today due to the fact I humiliated them this morning”

Sure you did.

How many times did we slam-dunk you today, alone?
Was it 3 ? or 4 ???


Good night.
38 Nostrolldamus the 10th (#) Feb 17th, 2013 - 04:31 am Report abuse
Persecuting after me all over this site like you, yankeeboy, and Elaine are doing just further prove that I left you three with your noses bleeding and now like a poor child that lost the fight is trying to chase after the winner after the fight is over and is too late to recover your reputation.

Little 1st world losers losing to a 4th world child that has never left his village, and who speaks English as a 3rd language.

39 Troy Tempest (#) Feb 17th, 2013 - 05:13 am Report abuse
Oh, such playful trash talk LOL!!

Always the victim, right??
Desperate to save face much??
Need to save face??
Trying to impress Sussie?

Feel better, now?

Here is a recap of your most recent disgrace:

It's all good, but posts 65 and on are the best!!


Don't dribble any Dulce de Leche on your shirt.

That's it, not wasting any more time on you. You can't change your humiliation.

Good night.
40 redpoll (#) Feb 17th, 2013 - 02:16 pm Report abuse
It used to be said that when the Argentine economy caught a cold that of Uruguay contracted pneumonia
However the restrictive practices on imports by the Kirchner governments have forced Urugay to seek other markets for its products so while any recession will have effects in Uruguay hopefully they wont be as bad as last time, always provided that Uruguay follows a reasonable economic policy, something which seems to be in doubt at present
41 redpoll (#) Feb 17th, 2013 - 05:49 pm Report abuse
@41 Uh lookee lookee!! Another Argentine skarecrow!!!! Dressed in rags probably. What happens to you when the Brit crows shoot back?
42 Nostrolldamus the 10th (#) Feb 17th, 2013 - 06:43 pm Report abuse
@39 Keep chasing me like a wounded puppy... poor “soul” (word soul used insultingly loosely).

Just give it up, I sent your reputation to ignominious irrelevance by calling you out on talking all this time about Argentina and yet never hearing about Havanna products.

Ever since then you can't let it drop and persecute me around this website, as any embarrassed moron looking to save face normally does.

Keep it up.
43 Troy Tempest (#) Feb 17th, 2013 - 08:25 pm Report abuse
44 Shed-time (#) Feb 17th, 2013 - 09:00 pm Report abuse
You act like your country is owned by a nearby broken fascist state, and what do you expect?
45 Vestige (#) Feb 18th, 2013 - 12:03 am Report abuse
Chris R - you say a lot without actually making an argument.
Islander - say what you will, but the islands' cruise business is in Arg hands if not for Montevideo. If they make a deal with Arg, which is not incredible, you can kiss those ships goodbye.
If a cruise company has threatened Arg in any way then thats a truly stupid decision, financial Russian roulette, if I had shares in them and they did that I'd be calling for heads. Arg will still be around if it loses a few cruise liners. Whereas a cruise company will lose a full country and possibly more given the mercosur....death for the business....or just an advantage to new rivals.
46 Troy Tempest (#) Feb 18th, 2013 - 12:34 am Report abuse
@46 Vestige

“If a cruise company has threatened Arg in any way then thats a truly stupid decision”

How could they “threaten” Argentina.

The most they could do is chose not to call in Argentine ports.

Does Argentina feel “threatened”?? By a mere Cruise Line?

Sounds like YOU are threatening the Cruise Lines, and the Fslklanders.

Are you that spiteful, or that afraid of losing the business??

I bet you are having regrets now about your thugs and bully tactics.

You are very transparent.
47 ChrisR (#) Feb 18th, 2013 - 10:54 am Report abuse
45 Vestige

I disagree, my post had far more considered thoughts and facts in it than your opinionated, ill thought out and Kircherist 'logic' drivel.

Even TMBOA cannot afford to have cruise ships passing AR by: where will she get her kick-back money from?

Also the cruise ships have alternative ports to go to: The Falklands (there are STILL no Malvinas you Twat), Montevideo, Punta Del Este and for the south the ports belonging to Chile.

You are not only very transparent but also very stupid.
48 Vestige (#) Feb 18th, 2013 - 08:33 pm Report abuse
46 - you'll have to ask islander how a cruise company could threaten/warned argentina.....he's the one who suggested it in the first place.

oh yes I can see a punta del este to malvinas cruise and back being popular :)
49 redpoll (#) Feb 18th, 2013 - 09:19 pm Report abuse
@42 Poor snotty being chased like a wounded puppy. Poor diddums!! You been weaned yet puppy dog? Or has the rabid bitch who suckles you run out of milk? Only yourself to blame you arrogant mendocino juvenile deliquent. Whats happened to your thesaurus? Supermarket run out of toilet paper?
50 Troy Tempest (#) Feb 18th, 2013 - 09:41 pm Report abuse

“46 - you'll have to ask islander how a cruise company could threaten/warned argentina.....he's the one who suggested it in the first place.”

@45 “If a cruise company has threatened Arg in any way then thats a truly stupid decision,”

No, no, it seems that you were making a definite statement, and you were not using the word “warning”, either.

Are we to expect more 'retaliation' from Argentinian mobs for business decisions by cruise lines, again?
51 MCuerzi (#) Feb 18th, 2013 - 10:23 pm Report abuse
As Islander says, Uruguay won't participate in a blockade of the Islands. We consider Argentineans our brothers but most people in Uruguay don't sympathize with the Argentinean stance about the islands. Much less, with the Argentinean approach to get them. We don't sympathize with the idea of the UK claiming to control Islands so far it's mainland, either. But forcing people living there for generations to accept another rule, would be seem too rude and anti-democratic for the Uruguayan culture. It would be unthinkable for us. No matter this people is some millions or a few thousand.
52 redpoll (#) Feb 19th, 2013 - 12:19 am Report abuse
@51 Nice post with which I entirely agree with
53 Troy Tempest (#) Feb 19th, 2013 - 07:49 am Report abuse
@51 mCuezi

“We consider Argentineans our brothers”

Argentina and Uruguay brothers?

We know that Uruguay is the smart brother.
54 ChrisR (#) Feb 19th, 2013 - 11:39 am Report abuse
51 MCuerzi
“We don't sympathize with the idea of the UK claiming to control Islands so far it's mainland, either.”

But Uruguay and Argentina were controlled by Spain! From the south of the UK to the north of Spain is only 770 Km (478 miles).

I think you have a bit of a problem pushing that idea when the facts are considered.

BTW, ALL my friends in Uruguay CANNOT stand the Argentines, but there again they are all professional people capable of thinking for themselves not just banding together for some ethereal, fantastical 'reason'.
55 Vestige (#) Feb 19th, 2013 - 10:10 pm Report abuse
50 - childish nitpicking, warn, threaten....have a look at the context.
56 John III (Pope) (#) Feb 24th, 2013 - 07:48 am Report abuse

The WoW is accepting bribes again. Why is this allowed to continue?

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