Presentación Uruguay 17 02 12 [Read-Only]
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WHY URUGUAY? PPP – Programme February 2012 MEF Why Uruguay? Strategic Location Institutional, Political and Social stability Open, stable and rapidly developing economy Modern and attractive investment regime Socio-Economic aspects MEF Uruguay: Platform to the region Uruguay: Río de Janeiro 2.400 Km A strategic location, Asunción 1.550 km São Paulo with the best 1.970 km Santiago connections to 1.900 km Porto Alegre establish a logistics 870 Km hub in the heart of the Buenos Aires continent's richest 250 Km Montevideo region. MEF Competitiveness of Uruguay’s infrastructure Quality ranking infrastructure for 133 countries Uruguay and Chile by sector Infraestructure 4.1 mobile 26 Quality Gap Index telephones 47 Overall 2.7 telephone 42 lines 62 Roads 4.1 electricity 35 39 Ports 1.1 air transport 52 35 Air transport 3.9 41 ports 37 Electricity 3.7 railroads 108 0 1 2 3 4 5 82 65 roads 22 Uruguay Chile Source: World Economic Forum MEF Uruguay: an open economy and a full member of MERCOSUR URUGUAY MERCOSUR Population 3,25 240,48 (millions) Area (Sq. Km) 176.215 11.800.000 GDP 2010 39.026 2.516.134 (USD millions) GDP per capita 12.002 10.745 (USD) GDP growth 6,3% 4,47% rate 2011 (%) Source: BCU – BCB – BCRA - BCP MEFMEF Why Uruguay? Strategic Location Institutional, Political and Social stability Open, stable and rapidly developing economy Modern and attractive investment regime Socio-Economic aspects MEF Institutional stability • Strong democratic tradition • Consolidated structure of political parties • Consolidated government policies • Stable economic rules and respect for contracts MEF Uruguay offers a strong rule of law and respect for property rights… Rule of Law 2010 Property Rights Index 2012 (Scale: -2.5 to 2.5) (Scale: 0-100) CHI 1.29 CHI 85 URU 0.72 URU 70 CRI 0.50 CRI 55 BRA 0.002 MEX 50 PAN -0.13 COL 50 COL -0.33 BRA 50 MEX -0.56 PER 40 ARG -0.58 PAN 40 PER -0.61 PRY 30 PRY -0.92 ECU 20 BOL -1.06 ARG 20 ECU -1.17 BOL 10 VEN -1.64 VEN 5 -2.00 -1.50 -1.00 -0.50 0.00 0.50 1.00 1.50 0 20 40 60 80 100 Source: World Bank Institute: Governance Matt ers Source: The Heritage Foundation MEF Main Indexes in Uruguay Uruguay in Factor Uruguay in the World South America Low Corruption (Transparency International, 2011) 2 25 Improvement of Trade Index 2 50 (World Economic Forum, 2010) Democracy Index (The Economist, 2011) 1 17 Economic Freedom Index (Heritage Foundation, 2011) 2 29 Quality of life (Mercer; 221 cities; data for Montevideo, 1 77 2011) Low Cost Of Living (Mercer; data for Montevideo, 2010) 4 13 MEF Why Uruguay? Strategic Location Institutional, Political and Social stability Open, stable and rapidly developing economy Modern and attractive investment regime Socio-Economic aspects MEF Strong growth in recent years Real GDP - Annual variation Growth in 2009 despite the international crisis 10 8.5 8.5 8 7.5 7.5 6.3 6 5 4.5 4.3 4 2.9 2 0.8 0 -2 -1.9 -1.9 -4 Annual average: -3.8 2007- 2011 = 6,8% -6 -8 -7.7 -10 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Central Bank of Uruguay - CEPAL MEF … outstanding performance in the context of Latin America … Real GDP - Annual variation 14 2010 2011 10 8.0 6.5 6.3 6.4 5.8 6.2 4.9 5.0 3.9 6 3.8 3.8 2.8 3.3 2 -2 Perú Chile Brasil Bolivia México Ecuador Uruguay El Caribe Paraguay Colombia Venezuela Argentina* América Central América Source: IMF : World Economic Outlook - BCU * Official data. MEF … as compared to the global economy… Real GDP - Annual variation - 2011 7.0 6.3 5.0 4.6 3.8 3.0 1.8 1.6 1.0 -0.9 -1.0 Japan European US World Latin America Uruguay Union & the Caribbean Source: IMF - World Economic Outlook – Central Bank of Uruguay MEF Important destination of foreign direct investment FDI in Latin America Foreign Direct Investment (2010, % of GDP) (million dollars) Panamá 2500 Nicaragua Dominica Uruguay 2000 Honduras Perú Costa Rica Bolivia 1500 Chile Paraguay Brasil 1000 Guatemala Argentina México 500 El Salvador Ecuador Colombia Venezuela 0 -2.0 3.0 8.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 MEF Source: Central Bank of Uruguay and Economic Commission for Latin America and the Caribbean Why Uruguay? Strategic Location Institutional, Political and Social stability Open, stable and rapidly developing economy Modern and attractive investment regime Socio-Economic aspects MEF Tax and other incentives Investment Promotion System Comprehensive legal framework for investments. Up to 100 percent of investments maybe tax exempt • Domestic and foreign investors are treated equally • Investments are allowed without prior authorization or registration • There are no restrictions on the transfer of capital or profits Free Trade Zones Areas exempt from corporate income and wealth tax, as well as from any other tax. • Good entering the FTZ are exempt from all import levies. • Authorized to develop any industrial, commercial or service activity. Free Port • Montevideo: first and only free port of South America’s Atlantic coast. • Free goods transit, no authorizations or formal procedures required. Within port facilities goods are exempt from all import levies. Free Airport • Value adding services can be carried out in activities related to goods. - Also in activities associated with services that are applied to goods. - Exemptions work in the same way as in the Free Port regime. MEF Why Uruguay? Strategic Location Institutional, Political and Social stability Open, stable and rapidly developing economy Modern and attractive investment regime Socio-Economic aspects MEF Socio-Economic aspects • High quality educational standards. • Social and digital inclusion plan called “Plan Ceibal” • Highest rated country in Latin America on the 2011 Legatum Prosperity Index • Free from epidemics and natural disasters • No racial or religious conflicts • High quality standards in healthcare services. • Uruguay: Smoke Free Country – 6th in the world, 1st in South America • Numerous parks and green areas in Montevideo, golf courses, spas and a 15 mile coastal promenade. World class resort Punta del Este only 80 miles away MEF PPP Programme in Uruguay Reasons to invest in infrastructure Why PPP? Is Uruguay appropriate for PPPs? PPP Law PPP Project Pipeline MEF “Uruguay demonstrates every day that it is an example of development and stability across the world” Sean Penn, 14 February 2012 MEF PPP Programme in Uruguay Reasons to invest in infrastructure Why PPP? Is Uruguay appropriate for PPPs? PPP Law PPP Project Pipeline MEF Reasons to invest in Infrastructure Attracts private investments due to Improves accessibility the increase in to infrastructure competitiveness and related services. profitability . Better quality of life and Lower costs imply social equity. lower product prices. Infrastructure multiplier effect Direct contribution to Positive externalities Gross Domestic Product over investment and Infrastructure improves productivity. construction, transport Better infrastructure and exports (better reduces costs and access to markets) improves productivity Source: Rozas, P. y R. Sánchez. (2004) Desarrollo de infraestructura y crecimiento económico: revisión conceptual. Serie Recursos MEF Naturales e Infraestructura No. 75. División de Recursos Naturales e Infraestructura de CEPAL . Reasons to invest in Infrastructure Also, the new export led growth model Uruguay is following requires more and better infrastructure…. 10.0 Growth Rates by Sectors 8.1 8.0 6.1 90s 00s 5.3 6.0 4.9 5.3 4.0 3.5 4.0 2.9 2.4 2.0 2.1 2.0 1.5 0.5 0.0 -2.0 -0.4 -0.7 -4.0 -2.6 Gas/Water Electricity/ Agriculture Government Manufacture Construction Transport/ Commerce/ Communications Finance y Services y Finance Source: BCU Restaurant/Hotels MEF PPP Programme in Uruguay Reasons to invest in infrastructure Why PPP? Is Uruguay appropriate for PPPs? PPP Law PPP Project Pipeline MEF Need for new tools Infrastructure needs Budgetary and fiscal restrictions The need of a Need for new, modern and more effective PPP Law contracting procedures emerged Chance of transferring risk to private agents with the appropriate rights and obligations NOTE: The PPP Law does not derogate previous contracting regimes nor it affects the modifications the government is planning on the actual Public Purchases System. MEF Need for new institutions Why the need to strengthen institutional support for Infrastructure? •With few exceptions, investment has been concentrated in the public sector. Private investment in Uruguay is below the levels of other countries in the region (0.5% of GDP). •The public sector should therefore be trained to make the necessary investments in the most efficient and effective way. Increase the level of •Build the needed infrastructure properly requires previous studies, providing investment in guarantees to funders and building initiative and response capacity in the public infrastructure sector. •Favorable macroeconomic conditions and institutional strength of the country favors private investments. •Need to strengthen the institutional support to carry out Public-Private Partnership (PPP) initiatives successfully. MEF PPP Programme in Uruguay Reasons to invest in infrastructure Why PPP? Is Uruguay appropriate for PPPs? PPP Law PPP Project Pipeline MEF Requirements Uruguay Macroeconomic Stability Rule of Law Institutional Strength Legal and Regulatory Framework Newly Approved PPP Law N° 18.786 Design and Evaluation CND–IADB-FOMIN-WB Expertise Incentives and Penalties Design and Incentives Mechanisms Selection Process Auction Theory + Competitive Dialogue Adjudication Criteria CND–IADB-FOMIN-WB Expertise Risk Management Risk Matrixes Financing International Expertise plus IADB-WB Guarantees International Expertise plus IADB-WB Monitoring and Accounting CND–IADB-FOMIN-WB Expertise MEF Design/Evaluation/Incentives: CND Role Key Successful Factors CND Role: Guarantee the Key factors are achieved Design and Evaluation Design contracts and do the needed studies: feasibility, social impact, value for money, etc.