This article was written by Gabriela Castro-Fontoura, Director of Uruguay-based consultancy Sunny Sky Solutions (www.sunnyskysolutions.co.uk).
Our President hasn’t really helped things, but it is clear that the rivalry between Argentina and Uruguay extends well beyond football. Don’t get me wrong, we don’t hate each other. It is more like sibling rivalry. I still remember my father supporting (West) Germany against Argentina in the 1986 World Cup final (“never, ever, support them”, were his words of wisdom). Now, I must admit I have soft spot for Argentina (and I might risk losing my Uruguayan passport for declaring this). I think it is one wonderful country with controversial yet amazing people. Buenos Aires is one of my very favourite cities in the world.
But they are not making my life easier now, you see. Economists rank Argentina as one of the most protectionist countries in the world. And that’s not only for those of you in Europe, we are having a right nightmare here, within Mercosur, doing business with Maradona’s country.
So I’ve decided to rise to the challenge and compare Argentina and Uruguay outside the football pitch, for your very benefit, and in just three points. Here we go…
1- Argentina has a population of over 41m, Uruguay of just over 3.5m. So if you are looking for scale, Argentina wins every time.
2- Argentina’s vast natural resources make it a world leader in many categories, including soy, lemons, biodiesel and polo ponies. Now, Uruguay can also boast some impressive records and it does punch above its weight (in football player exports but also in meat consumption, for example) but again, Argentina wins in terms of scale. In terms of land, Argentina has 2,780,400 km2 and Uruguay, well, 176,215. Now, to give you a sense of proportion, Uruguay is actually bigger than England and Wales combined…
3- Argentina is macroeconomically and politically volatile. Recent protectionist policies and measures, from high tariffs to non-automatic import licences, have made it ever so difficult to trade with the South American giant. Regulations change at short notice and the general legal framework is weak, with high levels of corruption. Uruguay, on the other side, is praised for it sensible macroeconomic management, respect for the law and its positive investment climate. And Uruguay is making the most of this imbalance, attracting businesses and investors eager to use it as a platform for Argentina (and Brazil and beyond).
The Uruguay v Argentina rivalry highlights the need for a regional perspective when targeting Latin American countries. Looking at countries as groups helps to think outside the box and envisage market entry solutions that, although sometimes highly complex, can really make a difference to your success in the continent.
My personal evaluation? Uruguay’s best, of course! But, patriotism aside, I will definitely be taking that ferry to Buenos Aires as often as I can. There’s so much business to be done on the other side of the River Plate…
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