URUGUAY

In comparison to other Latin American countries and despite its modest size, Uruguay serves as a model in view of  its impressive political and socio-economic achievements . In a region that is not always stable, the country can look back on a long democratic-republican tradition with functioning institutions and a diverse media landscape. According to the latest edition of The Economist‘s Democracy Index, Uruguay is currently the most democratic country in Latin America and is ranked 15th worldwide.

According to Transparency International, Uruguay is the least corrupt country in Latin America, ranking 21st in the global corruption index (out of 168). Uruguay has a relatively broad and wealthy middle class, low poverty rates, and a high level of social cohesion.   Remarkable are also its consensus-oriented political culture, comparatively well-developed health and education systems, and its stable party system. 

The school system, which has had some experience with e-learning concepts for some years already, managed the Covid-induced switch to homeschooling with comparatively few hitches. During the pandemic, Uruguay’s health care system proved to be stable and resilient. The speedy progress of the vaccination campaign helped to mitigate the effects of the pandemic. 

Montevideo is an important hub for Latin American goods on their way to Europe and is the region’s financial centre. Its economic importance along with Uruguay’s regional role as an intermediary (especially between Brazil and Argentina) are the reasons why Montevideo is the seat of the trade alliances Mercosur  and ALADI. .

The large formal labour sector, the country’s high purchasing power and overall favourable investment opportunities also offer many options for German companies to link up with Uruguayan partners. Especially when it comes to sustainable energy sources and digital infrastructure, Uruguay is an attractive partner for Germany..Only recently, Volkswagen chose Uruguay for implementing a pilot project on electromobility in Latin America.

Uruguay depends on functional regional and international integration and is absolutely prepared  to commit itself  to strengthening a values and rules-based world order. This, for example,  is reflected by the fact  that Uruguay is one of the 15 UN Member States that have been most active in UN peacekeeping missions in the past decade. It is also currently a member of the UN Human Rights Council. . At the regional level, Uruguay supports a flexibilisation of Mercosur as well as a speedy ratification of the association agreement with the EU

Uruguay is traditionally used to maintaining close foreign policy relations to various countries in the world. On the international level, the country is committed to multilateralism and free trade. . After 15 years of a pluralistic left-wing coalition made up of centre-left and left-wing parties, a centre-right government under President Luis Lacalle Pou took over in March of 2020. The new government has taken a much more critical stance towards left-wing authoritarian countries in the region, such as Venezuela, Cuba and Nicaragua. Ideological differences with Argentinian President Alberto Fernandéz have recently strained cooperation between the two brother states. Uruguay is clearly committed to Western values and is interested in a close cooperation with Europe and the US. However, mutual economic ties with China are becoming stronger and stronger. This is paralleled by closer political cooperation which became especially apparent during the vaccination campaign.  Due to its immigration history, Uruguay has close links to the South of Europe. But Germany is an important partner as well. Germany is highly regarded in Uruguay for its international role and serves as a role model in many respects. One example is dual vocational training, another is the sustainability agenda, for which Uruguay has developed  promising  policy concepts in areas such as hydrogen technology and the circular economy, for example. Moreover, Uruguay is a global leader in renewable energies.  With regard to implementing the sustainability goals as part of the United Nations 2030 Agenda, Uruguay scores well in comparison with other South American countries (ranked 2nd  behind Chile, ranked 43rd  worldwide).

Germany and Uruguay have had diplomatic relations for more than 160 years. There were particularly large waves of German immigration in the second half of the 19th century. Institutions such as the German School enjoy a high reputation in the country; the German-Uruguayan Chamber of Industry and Commerce was intensively involved in the development of a dual vocational training system based on the German model. German expertise also plays an important role in the field of renewable energies, a fact that underlines Uruguay’s affinity for climate- and sustainability-friendly policies.

 Germany, in turn, supported the country’s transition process from dictatorship (1973 to 1985) to democracy through parliamentary delegations.  Last year’s Latin America-Caribbean Initiative of the Federal Foreign Office and the EU-Mercosur Agreement, the ratification of which Uruguay strongly supports, are currently providing a boost to   bilateral relations.

Due to the relevance described above  and the experiences to date that have shaped the relations between Germany and Uruguay, Uruguay is an ideal ally for strengthening multilateralism as well as free trade. The country also represents an opportunity for  promoting  the regional integration of Latin America and  for moving  the continent closer to Europe, such as by ratifying the EU-Mercosur agreement.

The fact that the new government is favourably disposed to the  Lima Group, a multilateral alliance of 14 American states for the restoration of democracy in Venezuela, and that it has moved closer to  the Pacific Alliance also testify to Uruguay’s interst in  free trade, human rights and the strengthening of  a multilateral world order .

 There is also potential for cooperation in the fight against international crime . In recent years, Uruguay has been discovered by Latin American drug cartels as a transit country and export route to Europe.  In order to prevent Uruguay from increasingly becoming a hub for the globally networked drug trade, ideas to be considered could be the sharing of experience between customs authorities, a technology transfer and the training of intelligence services.

At the EU level, Germany should be determined to speed up the ratification of the EU-Mercosur agreement. . This is not only of geoeconomic interest for Europe,   but is also a decisive driver of the economic integration of South America.

Germany should also back up Uruguay  more strongly   in its efforts to strengthen institutions  and make Mercosur more flexible and bring the Alliance closer to the Pacific Alliance. It is important to give Uruguay more recognition as a political ally, rather than just seeing it as a pleasant holiday destination and as Argentina’s “little brother”.

China has massively expanded its influence in Latin America in recent years, including in Uruguay. China is the largest buyer of Uruguayan products, invests  in strategic infrastructure projects and is intensifying its cooperation with the country’s political parties.  . At the same time, there is very little critical discussion, on the continent, of the role of China and the risk of one-sided dependencies. Germany should address this and lobby for a more self-confident and independent position of the EU in the region.

Specific infrastructure and cooperation projects in the areas of dual vocational training, sustainability, digitilisation and logistics could contribute to this. . Initiatives by the German-Uruguayan Chamber of Commerce should be supported, with the aim of attracting German investors to the country and making full use of the country’s economic potential. Harnessing this potential is particularly important when it comes to reviving the economy and cushioning the social impact of the Covid pandemic. The continued economic vitality and political stability of Uruguay is of great importance to Germany, especially in the context of strengthening a values and rules-based world order.

Sebastian Grundberger heads the KAS Office in Uruguay.

Thomas Schaumberg was Trainee at the KAS Office in Uruguay.

Last Update: June 1, 2022