At a time when Latin America is experiencing tensions, mainly due to the military escalation of the United States against Venezuela, in Uruguay “democracy is stable”, celebrates Gabriel Oddone (Montevideo, 62 years old), Minister of Economy and Finance of the country. In an interview given Tuesday at Casa América, in Madrid, Oddone acknowledged that Uruguay and all of Latin America face the problem of inequality, which he calls “a great challenge” for the continent. The leader admits that the country “has not achieved any results” in the fight against child poverty, which according to Unicef affects 32% of children under six. The minister is part of the government of the Frente Amplio, the party of the iconic and recently deceased José Mujica, who managed to keep this country away from the right-wing turn experienced by neighboring Argentina. In the midst of a visit to Spain which will also take him to France, Oddone assures that he will speak with the authorities about the trade agreement between the European Union and Mercosur, which the minister hopes can be signed by the end of 2025.
Ask. It gives the impression that Uruguay is a stable country in a volatile context. What are the keys to this behavior?
Answer. Our political party system handles dissent well. I would say this is the key. Citizens recognize the ability of Uruguayan politicians to represent them. And this makes democracy stable, it ensures that public debate has levels of quality that are not frequently observed in other places.
Q. How do you deal with the new American administration?
R. We have a close and close relationship with North American authorities, as we do with most countries in the world, especially those relevant to Uruguay. We are approaching the rate increase very carefully, but the increase was significantly lower than that experienced by our competitors.
Q. Regarding the trade agreement between the European Union and Mercosur, when do you estimate it will finally be signed?
R. The scheduled date, or at least managed by the authorities, is December 20th. However, we are aware that there are still several outstanding issues, but we hope that this agreement will be signed by the end of 2025.
Q. What guarantees have the Mercosur countries established to deal with the rejection of the European agricultural sector?
R. There are never guarantees in an agreement of this kind and obviously for the European agricultural sector this is a challenge. I predict that the European agricultural sector will progressively focus on specializing in certain types of niche products. Furthermore, this agreement will also affect some sectors of activity in the Mercosur countries.
Q. The International Monetary Fund estimates that Uruguay will grow by 2.5% in 2025. What are the economic prospects managed by the Government?
R. We expect average GDP growth for the next five years of 2.6%. It is an ambitious estimate but we believe that, despite international uncertainty, Uruguay has the conditions to attract investments. Furthermore, some relevant investment projects are being developed which will generate a good level of activity.
Q. And what are the main challenges facing the Uruguayan economy?
R. First, they must accelerate the long-term growth rate, which is crucial to being able to finance our social protection model and strengthen our investment attraction schemes. Secondly, advance in aspects related to energy and ports, to generate attractive investments.
Q. They are about to approve the budgets. What are the main new features it includes?
R. First, it introduces a more transparent and stronger commitment to fiscal matters because it establishes a very clear debt ceiling. Secondly, some tax changes are introduced, as the tax is introduced on multinational companies turning over more than €750 million per year, in line with the OECD. Furthermore, capital increases on income from movable and real estate assets coming from abroad will begin to be taxed. These elements will help maintain tax revenues and consolidate the debt trajectory.
Q. Will they introduce a tax to tax the richest 1% of Uruguayans as the PIT-CNT union has proposed?
R. We celebrate that the debate is ongoing, we believe it is a good debate, but it is not one of the priorities or ideas that the government wants to promote.
Q. Unicef assures that child poverty in Uruguay is double that of adults. How should we address this problem?
R. I would say it is Uruguay’s main problem and we need to present solutions. We are placing emphasis on strengthening the transfer system for vulnerable families where poor children and adolescents live. We also need to strengthen the scholarship regime so they can spend more time in the school system.
Q. Do you think inequality is the main challenge facing the continent?
R. I think it’s a big challenge for the continent, poverty levels are a big challenge that we face. The region’s economies are not poor, yet income distribution offers enormous opportunities for improvement across all our economies. In the case of Uruguay, the system has been well resolved to address poverty among the elderly, where the other end of major poverty is usually found in America, but where we have not been able to achieve good results is in childhood and adolescence.
Q. What results do you expect from your trip to Spain?
R. We have a very close bond, culturally and politically, with Spain. President (Yamandú) Orsi, in fact, has a very important closeness with the president of the Spanish government, Pedro Sánchez. Spain is the main investor in Uruguay, so we will pay attention to what the Spanish Executive is interested in regarding Spanish companies located in Uruguayan territory and, in turn, we will talk about the issues of the European Union-Mercosur agreement and some other issues on the bilateral agenda.
Q. What is the position of the government of Uruguay regarding the escalation between the United States and Venezuela?
R. We are a country with a strong vocation for peace and the peaceful resolution of conflicts and differences. Naturally we see this with concern, like every inhabitant of Latin America where, fortunately, conflicts are quite low.
