Uruguay’s central bank reported a record 14.6% GDP surge in the latest quarter; the country’s greatest growth in nearly a fifteen years. Analysts partially credited such a boost to a controversial paper mill which began operations last November:“Growing economic activity has been sustained by expansive domestic consumption and strong international prices for the country's commodity exports,'' said Gustavo Michelin, an economist and former director of Banco de la Republica.The $1.1 billion pulp mill built by a Finnish firm has been a source of discord between Uruguay and neighboring Argentina. Environmentalists and the Argentine government attempted to block the plant from being constructed near the country’s river border. Despite protests and a major diplomatic dispute between both countries, the plant was built and continues running.
Image- Misionlandia
Sources- The Latin Americanist, Bloomberg, Reuters
It'd be nice if the Botnia celulosa mill were the main driver of economic growth here in Uruguay, since it represents a relatively sustainable industry (provided those Eucalyptus trees keep on growing and Argentina does not prevail in its international lawsuit).
ReplyDeleteUnfortunately, it seems like most of the country's recent growth is still tied to rice, grain and beef sales, exports that have historically proved very vulnerable to price fluctuations. These industries, though perhaps better than the export of nonrenewable resources such as oil (see Venezuela) or minerals (see Chile), also do little to provide jobs for university educated Montevideanos.
Until you find an "Hecho en Uruguay" label on products that don't end up on your plate, this country will continue to lose talented young people and remain vulnerable to unpredictable commodities prices.