By Graham Bound for MercoPress (London) – Only on the most serene of news-days might a visit to the United Kingdom by the President of Uruguay make headlines in the country’s newspapers and broadcast bulletins. For a little while it actually looked as if there might be just such a benign news environment. But as President Luis Lacalle Pou took his seat at Canning House, the Latin America and Iberia think tank, on Monday evening to deliver a lecture titled “Uruguay, a Reliable Gateway to South America – Opportunities in Green Finance”, he must have known that he had been totally eclipsed by his host, the British Prime Minister Boris Johnson.
Lacalle Pou and his delegation were earnest and had important messages about their country, and (most importantly) innovative thoughts about climate change strategy. They were messages that the British Foreign Office would have wanted to be widely heard, if only to remind everyone that Britain has at least one good and old friend in South America with which it might one day sign a trade deal.
But Boris Johnson, whom Lacalle had met earlier, was the only show in town. He was fighting for his political life again, following the shock publication of photos that clearly showed him drinking at a covid lockdown party which he once assured Parliament did not take place.
All of this was a shame, because in the concise and somewhat understated lecture by the Uruguayan President, there were important messages about Uruguay’s reliability, the maturity of its democracy, its public finances, its institutions and the ability of the Republica Oriental to manage crises. They were words that deserved to be heard.
The president addressed the Canning House audience in good English, pointing out that his parents – he is the son of former Uruguayan president Luis Alberto Lacalle Herrera (1990-1995) – had paid for his primary and secondary education at the British School in Montevideo, so he had to “prove that it was not in vain”.
“Our country,” said Lacalle, is among the strongest democracies in the world. We respect contracts and we respect institutions. The country’s strategy in the face of the covid emergency was, he suggested, exemplary and different to that of much of the world. There were no lockdowns and Uruguay’s vaccination campaign was efficient and effective. “Our citizens,” he said, “showed strong cohesion and practiced responsible living, and we made a big effort to keep the economy going.”
#LIVE NOW: President @LuisLacallePou, President of #Uruguay, is speaking on Uruguay as a gateway to #SouthAmerica and #Opportunities in #GreenFinance @UKinUruguay @tradegovukLatAm @tradegovukLatAm https://t.co/ayYyc79CDZ— Canning House (@Canning_House) May 23, 2022
He spoke positively but in no great detail about trade, but there was at least a hint that the country might forge an independent trade deal with the UK, to replace the blanket EU-Mercosur agreement which the UK forfeited when it left the EU. “Will Uruguay try to agree trade deals with blocs or with individual countries?” he was asked. The answer was, yes, Uruguay could work with individual countries. “Uruguay is making a big effort to open to the world,” said Lacalle Pou. “Our [Mercosur] partners are big and they are not willing to do it fast. We are more in a hurry and we want to go worldwide.”
The President presented a picture of Uruguay that he said should generate confidence. But what of hope for the future? Can Uruguay offer that? “My answer is yes. Because we are generating certain facilities to people to live and invest in our country. We are changing tax exemptions for investors and our requirements for residence. We have received more than 14,000 new residents, mainly from Argentina.”
But these were relatively small issues compared to what came next. While much of the northern hemisphere has been preoccupied by the war in Ukraine and its possible ramifications, and while Boris Johnson fights to save his political life, the Uruguayans are thinking about what they can do to save the world. The President said: “When we talk about green finance and green energy, we walk together.” And with that, he handed over to his Minister of Economy and Finance, Azucena Arbeleche.
In word and demeanour, Ms Arbeleche conveyed a real sense of urgency. She admonished the giant developed economies of the world for not fulfilling their promises to fight climate change and bring the world to net-zero emissions in time to avert catastrophe. She said there is no room for tinkering around the edges. “We really need transformative change. We have to start now.” Her tone was as coldly critical as her president’s tone was emollient. “Developed and developing economies need to make bold efforts,” she said. Despite the great promises made at the COP26 global conference in Scotland, not enough had been done.
Nuestro país ofrece esperanza.— Embajada Británica (@UKinUruguay) May 23, 2022
Nuevas medidas para promover las inversiones y la inmigración.
El presidente @LuisLacallePou enumera múltiples razones por las que actúa como puerta de entrada a la región en conferencia
organizada por @Canning_House pic.twitter.com/tCEJnJPKba
The pandemic, she accepted, had set efforts back. Not only were the attentions of governments diverted from the even bigger threat of climate change, but “balance sheets are strained.” However that was not a good enough excuse to do so little. “Given the degree of uncertainty that prevails, we need international cooperation and we need concerted action. We need to walk the talk.”
Sounding just short of angry, she said, “Developed countries [presumably including the United Kingdom] should fulfil their commitments and pledges. And we need developed countries to support emerging markets.
“Investors and banks should accept a greater responsibility, not just [concerning themselves with] financial returns. They play a very important role. And all players should have an open dialogue.” In other words, don’t wait for another COP, talk to each other. Make it happen.
So much for the perfectly appropriate finger-wagging at the rest of the world, particularly the largest economies. Ms Arbeleche moved on to explain how Uruguay has been working to develop a financial strategy that could be a model for the rest of the world. “We are thinking of linking the cost of borrowing to certain things such as environmental targets. Those countries that live up to their commitments should pay lower interest. Countries will have an incentive to perform better because they will be rewarded.”
She said Uruguay is looking at introducing a bond that is linked to sustainability. “We are incorporating two climate outcomes into our bonds; the reduction of greenhouse gasses and the preservation of native forestry. We are looking at embedding in the bonds a mechanism whereby you pay less or more interest according to your climate change policy and commitment.”
Ms Arbaleche suggested that the initiative needs the cooperation of a number of institutions, which has slowed the project. But she is clearly bullish about it and determined to press ahead with the strategy – and to take it to take it to the rest of the word. “This can be reproduced in other countries,” she said. “We have been speaking with the World Bank and asked them to put funds into sharing this idea.”
One sensed that some of the great and good from business who shared the dais with the Uruguayans did not particularly enjoy being lectured in matters of high principle by envoys from a very small economy. There seemed to be a keenness to get back to the issue of trade and making money. Did the likely global food shortages caused by the war in Ukraine offer Uruguay opportunities? Lacalle Pou was asked. He had a dignified answer: “We don’t think short-term and we don’t believe that some people have to be in a crisis so that we can enjoy a good opportunity.”
The messages from the Uruguayans were principled, dignified, innovative and important. It was only a shame that with Boris Johnson once again hogging the limelight, very few people would hear them.