MercoPress. South Atlantic News Agency

Uruguay advised to lower Mercosur expectations and ‘follow your own interests’

Economist Carlos Steneri, “let’s not forget when our major partners collapsed”

Mercosur expectations must be lowered and made to prosper in energy integration, infrastructure and trade, said a Uruguayan leading economist adding that without sounding dramatic “we must follow our interests”.

“We can’t slam the door on Mercosur because our geography conditions us and we are a natural transit area for our two powerful neighbours (Argentina and Brazil)” said economist Carlos Steneri addressing this week a business forum organized by the Association of binational Chambers of Commerce.

Steneri was Uruguay’s representative before the IMF in Washington for over two decades.

“But we must lower our Mercosur expectations and try to prosper in those basic areas such as energy integration, infrastructure and trade. We can’t knot our development to a country or to a block expecting all our growth to be geared by Mercosur”, warned Steneri who recalled recent experiences.

“Only ten and fifteen years ago we committed that mistake by betting our whole development on Mercosur and that was when our main trade partners collapsed (Brazil January 1999 and Argentina in 2001/2002)”, said Steneri adding that economies closely integrated into blocks such as Mercosur or the European Union “boost the transmission of crises”.

“Let us recall that during the Uruguayan crisis of 2002 (direct contagion from Argentina and erosion from Brazil’s collapse in 1999) we stood alone, by ourselves and we had no advice from anybody. So not wanting to sound dramatic, we must do what we believe must be done to ensure our development and act following our interests”.

Regarding the current controversy triggered by French president Nicholas Sarkozy statement that Uruguay is a fiscal have, Steneri described it as “nonsense”.

“Nobody can describe Uruguay as a fiscal haven. I can say so on my many years working for government and multilateral organizations: we never manipulated numbers in Uruguay; we have always admitted the true numbers no matter how bad or good for that matter. We have sufficient credentials and credibility to stand up and protest such statements where ever and when ever”.

However he admitted that the fiscal data demanded by Argentina and lifting secret accounts in Uruguayan banks “can obviously harm Uruguay in the short term: all uncertainties are harmful, human mankind is fearful and money loathes risks”.

Steneri added that those who “are proposing this kind of measures are well aware of these consequences and know people will consider that the rules of the game have been changed and will try to find an option be it here (in Uruguay), or in some other place”.

When asked specifically about Argentina and Brazil’s attitude in the G20 statement read by Sarkozy and naming Uruguay as a ‘fiscal haven’, Steneri said “don’t expect much more that what you can, basically you’re on your own”.