At his inauguration earlier this year, new Uruguayan President Tabare Vazquez was upstaged by demonstrations over the country’s first Oscar winner. The singer-composer Jorge Drexler won the gold statuette for best original song, from the soundtrack to “The Motorcycle Diaries”; however, general sentiment was that Oscar organizers slighted Drexler by not inviting him to sing at the awards ceremony.

Business travelers, however, are more likely to have an eye on the moves of Vazquez than on the movies of native performers. Vazquez is the country’s first socialist president and a champion of social welfare rather than free-market reforms. His policies reflect his belief that increased foreign investment has failed to lessen the disparity between his country’s rich and poor.

Still, pint-sized Uruguay is aiming to position itself as an attractive 21st century commodity. Much of its economy is tied to its bigger neighbors, Argentina and Brazil. Argentina’s recent economic problems inevitably spilled into Uruguay, which now appears to be recovering from the 2002 Argentine economic crisis. Economic growth last year was at 13 percent.

Essentially an agrarian society, Uruguay is blessed with some extraordinary natural assets. Its extensive coastline in particular is attracting both investors and tourists.

More than 200 miles of pristine beaches and wildlife reserves stretch from its capital, Montevideo, north to the Brazilian border. Uruguay’s longtime resort destination of choice, Punta del Este, best described as “Miami meets San Tropez,” is about two hours north of the capital. Long an upscale Argentine playground, Punta (as it is referred to locally) is plagued by overdevelopment. Many visitors and investors now prefer the less developed northern suburbs that lie beyond the high-rise condos, specifically the fashionable La Barra. Here, elegant homes and inviting small hotels, such as Posta del Cangrejo and L’Auberge, make for a more comforting, less daunting environment. Development is continuing to move still farther north, toward the less populated Jose Ignacio, a fishing village and hot celebrity getaway. The town is known for its top-notch restaurants and beautiful sunsets.

Perhaps more interesting is Carmelo, a sleepy town along the Rio de la Plata, across from Buenos Aires and due west of Montevideo. New investment here includes the Four Seasons Resort Carmelo (www.fourseasons.com/carmelo), which has bolstered Uruguayan tourism to an unprecedented level of luxury. This plush operation is a sophisticated, yet low-key, property that attracts monied Argentines and North Americans who would never previously have considered a winter getaway to Uruguay. Built along the river, amid pine and eucalyptus trees, the resort has 44 well-appointed bungalows and duplex suites with wood-burning fireplaces and deep soaking tubs, a full-service spa and one of the best golf courses in Latin America. Nearby, guests discover opportunities for sailing, kayaking, canoeing and even horseback riding to a nearby winery.

Carmelo is about 2 1/2 hours by car from Montevideo. However, it’s best to travel there by ferry from Buenos Aires, which takes about two hours. A Four Seasons car will pick you up at the dock in Colonia, about an hour from the resort. North Americans familiar with the Four Seasons properties often combine Carmelo with a stay at the Four Seasons Buenos Aires, the hotel group’s other luxury South American property. Alternatively, you can fly to Carmelo in about 20 minutes. The proximity to Argentina and reasonable prices have made it an attractive investment for Argentineans who are buying property and building vacation homes. Nearby Colonia, a UNESCO World Heritage site, is also experiencing a growth spurt, with a new Kempinski Hotel and a soon-toopen Sheraton resort with an 18-hole golf course.

Uruguayan Tourism Minister J. Pedro Bordaberry is hoping to lure more overseas business to lessen his country’s dependency on the Argentine market. Tourism accounted for $640 million last year, with a 30 percent increase in travel from the United States. Bordaberry is developing attractions beyond sun and sand, enticing tourists to stay at estancias (ranches), take horseback trips around the country and watch for whales. The minister, whose father was a past president, is quick to point out some of his country’s advantages, such as low crime, no public health problems and a high (97 percent) literacy rate. In light of the weakened dollar, Uruguay is gaining recognition among Europeans and North Americans for its low prices and high quality of life.

Uruguay has earned a reputation as a first-rate financial center due to its total freedom of capital, the absence of personal income tax and a tradition of banking secrecy. The U.S.-Uruguay Bilaterial Investment Treaty signed last October is designed to foster an economic partnership between the two countries, while raising confidence among U.S. investors. The treaty provides a means to resolve investment disputes and ensures that all investment procedures are transparent. U.S. exports to Uruguay in 2003 were $326 million, up 57 percent from the previous year. Key export products include machinery, optic and medical instruments, cosmetics and plastic. U.S. imports from Uruguay include meat, hides and skins, dairy, fish and seafood. In the first seven months of last year, Uruguayan exports increased 164 percent. Forestry, hotels, agroindustry and information processing are commercial ventures of particular interest to U.S. investors.

An “open skies” agreement with the United States allows airlines to make commercial decisions with minimal government intervention — a decided advantage for investment and tourism. At the moment, American Airlines and United Airlines operate daily one-stop service to Montevideo through Buenos Aires. American also offers nonstop service from Miami three times a week, while United has daily nonstop flights from Washington, D.C. Uruguay’s national airline, Pluna, operates domestically and to nearby countries. During a recent 25-minute flight from Punta to Buenos Aires, Pluna flight attendants managed to serve ice cream to 200 passengers.

Montevideo, home to 50 percent of the country’s 5 million people, is looking forward to the opening of a new airport in 2007. The much-anticipated facility comes at a time when recent economic woes have left Montevideo in need of a face-lift. Some of the city’s downtown area, such as the colonial neighborhood of Ciudad Vieja, has already been restored. Farther afield, the upscale Carrasco neighborhood is a beautiful residential area, home to most foreign embassies and close to the beach and the airport.

A word of advice: Should you be traveling from Argentina, and carrying Argentine pesos, be sure to exchange them. The Argentine peso is worth about 10 times the value of a Uruguayan peso.

Business Resources

Entry Requirements

A passport is required. U.S. citizens do not need a visa for a visit of less than three months.

Embassy of Uruguay
1913 1 St. N.W.
Washington, D.C. 20006
tel 202 331 1313
fax 202 331 8142
www.uruwashi.org

U.S. Embassy
1776 Lauro Muller
Montevideo, Uruguay
tel 598 418 7777
fax 598 418 8611
uruguay.usembassy.gov