Relocation expert and Uruguay specialist, David Hammond has the scoop on recent changes to tax law in Uruguay, “Uruguay Tax Proposal Rocks the Boat?”:
Uruguay made headlines all over the world this last week, with news of a proposed tax bill that could result in a weakening of Uruguay’s banking privacy and tax the offshore assets of Uruguayan citizens and foreign residents. Continue reading
Is Uruguay first world living at third world prices, as some of the less accurate newsletters will tell you?
Don’t believe it.
In some cases, you’re paying less than US prices, but remember that that’s cheap only to dollar holders. People who make the average Uruguay salary- about a quarter of what they’d earn in the US – aren’t going to find it cheap at all. In other cases (supermarket processed food, for example), you’re actually paying more than in the US. In the case of electronics or clothes, you’ll be paying considerably more.
To give you an idea, here’s a link to a site (in Spanish), where you can see uptodate prices.
It’s at the Ministerio de Economía y Finanzas –Sistema de Información de Precios al Consumidor
Eggs, as you can see, are expensive – equal to or higher than in the US. In a country of farms that’s a bit of a mystery to me. Chips, crackers, cereal and orange juice are also expensive.
However, if you go to the street stalls and buy vegetables, you’ll find them cheaper.
Services in general are cheaper. Which means what? I hate to tell you. It means that labor is overpaid in the US – relative to the world market, at least.
Spring is here. I walked the four miles or so to the Old Town (Ciudad Vieja) and renewed my visa. The office is at Misiones 1513, a few blocks from the sea. In Plaza Libertad there were people strolling around sight-seeing and buying food, though street food isn’t the way of life it is in India or Malaysia or Morocco.
Actually, you don’t need a visa with a US passport. But I was told I’d have to leave the country and reenter after 90 days, so I’d been planning on making the boat trip back to Buenos Aires. That would have been about $70. Fortunately, I googled and found that all you need to do is show up at Immigration and ask to extend your stay. That cost was roughly $15.
Moral of the story: Sometimes the information on the web is wrong and you need to talk to people to find out the real deal, Other times, people are repeating misinformation and you need to verify from the web.
The whole thing took about an hour, mainly because I had to go out and change money. The Uruguayan peso has strengthened a bit recently, trading at 21 and 22 (compra and venta). So I didn’t want to change any more than I absolutely had to. The man at the cambio seemed to understand my cheese-paring mentality. No problem, he said in good English, as I handed him a hundred. I’ll change twenty for you.
It’s what I like about people here. They seem to understand the notion of “making do.” It’s not a shame. In the US, at least until the market-crash wised people up, a lot of my friends would consider this unseemly haggling.
So far, things have turned out much as I expected, except for rent (higher than expected) and food (much higher than expected). The weather really is temperate. The environment really is pristine. The people really are easy-going. The roads really are safe and good. And it’s not crowded or scruffy or polluted or noisy, as parts of Buenos Aires are. (It’s also not as much of a party scene).
Electronics are expensive – but I expected that. Few places in the world are as cheap as the US for electronics.
My one gripe is keeping in touch with everyone. Skype is relatively inexpensive but the sound isn’t great. I keep calling landlines in the US and in India and getting all sorts of background noise and distractions. The connection disappears. And sometimes it takes ages to get through. If this is the replacement for telephones, I’m not impressed.
The Indian government and a number of private companies have got around to Latin America and are investing in land here. The idea is to produce food more cheaply than can be done in India, even after adding shipping costs.
So maybe Indian pensioners and retirees won’t have to spend their entire savings on food and water in the future, as I’ve been afraid they might.
Maybe also, India won’t be destabilized by the bombing in Afghanistan…
Maybe China and India will be able to see eye to eye on their riparian disagreements…maybe…
Maybe…
But I’m not holding my breath.
The Pentagon, among others, has made the point that riparian disputes are going to be at the top of the agenda in global politics in the coming years. Water is essential to survival and central to border disputes between China and India, Pakistan and India, and even in Latin America, where water is abundant.
In this case, Uruguay’s construction of two paper mills on the River Uruguay has set off a dispute with Argentina, which claims the construction is in violation of a long-standing treaty and is polluting the river as well as the Argentina tourist town on the other side of the border. The two countries have taken the dispute to the Hague, which is now hearing the case.
What’s my interest in this?
Uruguay remains comparatively unpolluted next to its neighbors, but the paper mills, which will boost Uruguay’s exports by 15% are symptomatic of increased development that could very well change that picture shortly. Uruguay’s attraction as a farming country is the relatively cheap cost of good quality soil, abundant water, and a history of organic use . But with multinationals and governments gobbling up land all over the world, you wonder how long that will continue.
The area around the middle of the border with Argentina, especially at the lower end, near Colonia (the Soriano area), has the highest quality soil and is intensively cultivated. Argentines often buy there because of the proximity to Buenos Aires, via the ferry at Colonia. The farming tends to horticulture, with potato farming and dairy well represented. I haven’t looked in that region because of the high prices – a hectare can run to over $8000, and I’ve seen prices as high as $20,000 and more, depending on the improvements and the location of the land.
In the middle of the border area, in the department of Paysandu, land usage runs to cattle farms and wheat.
Further north, in Salto, a pretty university town, citrus farming takes precedence, as the soil isn’t as high in fertility.
All these areas are well watered by rivers, like the Uruguay and the Rio Negro, which cut through the relatively flat, unspectacular land. But these are also the areas where land prices have shot up the most recently because of the influx of Argentines, looking for a safer place for their money and freedom from increasingly onerous agricultural laws….
Adagio en Mi Pais (Adagio in My Country), written and sung by Alfredo Zitarossa.
Zitarossa was a beloved and important Uruguayan composer, poet, singer, and journalist, who was ostracized for his involvement with the Frente Amplio of the left, during the 1970s, at the time when the military junta (with its torturous secret police) came to power in Uruguay. Zitarossa’s songs were banned in the Southern Cone countries and he himself was forced to live in exile in Argentina, Spain, and Mexico. He died young in 1989 at the age of 52. The most characteristic voice of resistance in Uruguay’s second “independence,” he makes a good subject for a post on Independence Day (Dia de la Independencia) , which happens to be today.
Behind every door
my people are alert,
and no one can silence their song,
and tomorrow they will sing again.
In my country we are tough,
the future will show that.
[Here is a complete translation by Yoshi Furuhashi, Monthly Review Press]
A bit of history: Uruguay won its independence from a triangular war between Spain, Argentina, and Brazil between 1825 and 1828. As the second smallest country in South America (after Surinam) it’s still somewhat overshadowed by its giant neighbors, Argentina and Brazil, with whom it shares it western and northern borders respectively.
Uruguay has many things to recommend it to a libertarian temperament. It’s a small country. The culture is unpretentious and laid back. It’s the home of the gaucho, the ferociously independent vagabond cowboy of South America. And the national motto, Libertad o Muerte (Liberty or Death) echoes Patrick Henry’s famous words (“Give me liberty or give me death”) before the Virginia Convention in 1775.
It’s traditional to go out on the night before Dia de la Independencia and I made it to a neighbor’s asado (barbecue). According to the Uruguayans, the asado, mate (the ubiquitous herbal tea that is sipped through a straw), and tango all come from Uruguay, not Argentina. Of course, in Argentina, you hear another story.
The asador did a fine job with the wood fire that cooks the meat. I took a shot at it too. The idea is to spread out the embers as they fall through the grate of the parrilla (grill)* from the log fire. Too many in one place and the meat gets burned. Too few and it doesn’t cook. Most of our guests wanted their meat – the world-famous Uruguayan organic beef – well done, so the asador and I were quite busy. The beef cut is called tira de asado (a cut from the ribs) and is mixed with other kinds of meat, like chorizo (sausage). We served the asado with chimichurri – a relish from oil, oregano, garlic, and chopped belly peppers – and with baguettes and clerico (made by mixing fruit drinks and wine).
*The term parrilla is also used, by analogy, to refer to torture and to the torture-rack, which were wide-spread in the 1970s and 1980s in Argentina, Chile, Uruguay, and Brazil…..
For the role of the US in fostering the routine use of torture in Uruguay, read this piece by Bill Blum.
