Uruguay
Responsible Business Conduct (RBC) is a key element of a healthy business environment – one that attracts quality investment, minimises risks for businesses, ensures stakeholder rights are respected and ultimately leads to broader value creation. This chapter reviews Uruguay’s policies to promote RBC and their alignment with the OECD Guidelines for Multinational Enterprises. It also summarises Uruguay’s plans for establishing a National Contact Point (NCP), a key mechanism allowing the government to promote and implement the Guidelines and providing a mediation and conciliation platform for resolving practical issues that may arise.
The Investment Policy Review of Uruguay assesses the investment climate in Uruguay and discusses the challenges and opportunities faced by the government. Capitalising on the OECD Policy Framework for Investment, the Review takes a broad approach to investment climate reforms in Uruguay and its continuous transition towards higher levels of development and well-being. Individual chapters are devoted to the overall economic performance and foreign investment trends, the reform of the state and state-owned enterprises, foreign investment regulations, the legal and institutional framework for investment protection, tax policy, investment promotion and facilitation, and policies to promote and enable responsible business conduct (RBC).
Uruguay has long acknowledged the long-term benefits of an open and non-discriminatory international investment environment. As such, the country retains very few restrictions on establishment and operations of foreign-owned enterprises. This chapter examines the openness of Uruguay’s investment regime in relations to barriers to entry of foreign-owned firms and exceptions to national treatment. It also benchmarks the openness of Uruguay’s FDI regulatory regime against OECD and various other emerging economies through the OECD FDI Regulatory Restrictiveness Index, showing the level of openness far above the average encountered in developing countries and even most advanced economies.
Uruguay sigue destacándose en América Latina y el Caribe (ALC) con respecto al desarrollo de una sociedad y economía digitales inclusivas. El país ha hecho esfuerzos significativos para mejorar el acceso digital de todos sus ciudadanos. Ha aumentado el número de usuarios de Internet y de suscripciones activos a servicios de banda ancha móvil y fija en la última década. Uruguay mejoró en el índice de desarrollo de gobierno electrónico del 0.56 en 2008 al 0.79 en 2018, una evolución superior al promedio de ALC (0.65) pero inferior al promedio de la OCDE (0.82). El índice de comercio electrónico B2C de la UNCTAD indica que el apoyo de la economía a las compras por Internet sigue estando por encima del promedio de ALC. Este resultado positivo se atribuye en parte al desarrollo de la banca digital en el país.
Uruguay can legally issue the following type of ruling within the scope of the transparency framework: cross-border unilateral APAs and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles
Uruguay was reviewed as part of the 2017/2018 and the 2018/2019 peer reviews. This report is supplementary to those previous reports (OECD, 2019[1]) (OECD, 2018[2]).
Uruguay continues to stand out in Latin America and the Caribbean (LAC) in terms of shaping an inclusive digital economy and society. The country has made considerable efforts to enhance digital access and use for all. Internet users, active mobile broadband and fixed broadband subscriptions increased in the last decade. Uruguay rose in the E-Government Development Index from 0.56 in 2008 to 0.79 in 2018, which is above the LAC average (0.65) but below the Organisation for Economic Co-operation and Development (OECD) average (0.82). The UNCTAD B2C E-commerce Index shows that the economy’s support for online shopping is still above the LAC average. This positive result is partly attributed to the development of digital banking in the country.
This peer review covers Uruguay’s implementation of the BEPS Action 5 transparency framework for the year 2018. The report has four parts, each relating to a key part of the ToR. Each part is discussed in turn. A summary of recommendations is included at the end of this report.
En las décadas pasadas Uruguay mejoró considerablemente sus resultados en materia de desarrollo. El país tiene un buen desempeño en comparación con otros países de América Latina y el Caribe (ALC) en diversos indicadores, como educación, reducción de la pobreza, salud, sostenibilidad ambiental, corrupción y seguridad ciudadana. El porcentaje de la población que vive con menos de 5.50 USD al día (PPA de 2011) disminuyó más de cuatro veces, de 17.1% a 3.7% en el periodo 2006-16. Asimismo, el porcentaje de la población vulnerable que vive con 5.50-13.00 USD al día (PPA de 2011) disminuyó de 38.1% a 23.8% en el mismo periodo. Esta disminución convirtió a Uruguay en el país con mejor desempeño en la región por sus logros en reducción de la pobreza. Además, las tasas de mortalidad materna y de mortalidad infantil ascienden a 15 por cada 100 000 nacidos vivos y 7 por cada 1 000 nacidos vivos, respectivamente. Estas tasas se ubican muy por debajo del promedio de ALC y coinciden con el promedio de la OCDE de 14 y 5.7, respectivamente.
Uruguay has made strong improvements in development outcomes during the last decades. The country performs well compared to other LAC countries on a range of indicators, including education, poverty reduction, health, environmental sustainability, corruption and citizen security. The share of the population living on less than USD 5.5 a day (2011 PPP) decreased by more than four times from 17.1% to 3.7% over 2006-16. The share of vulnerable population – those living on USD 5.5-13 a day (2011 PPP) – also decreased from 38.1% to 23.8% over the same period. This decrease made Uruguay the best performer in the region for its achievements in poverty reduction. Moreover, the maternal mortality ratio and the infant mortality rate are 15 per 100 000 live births and 7 per 1 000 live births, respectively. These rates are well below the Latin America and Caribbean (LAC) average and in line with the OECD average of 14 and 5.7 respectively.
Uruguay was first reviewed during the 2017/2018 peer review. This report is supplementary to Uruguay’s 2017/2018 peer review report (OECD, 2018[1]). The first filing obligation for a CbC report in Uruguay commences in respect of periods commencing on or after 1 January 2017.
Uruguay is the only country in the world which has a five-year budget. A budget is prepared by each new government taking office and voted within 6 months of its swearing in, for the whole five-year government term. Each year, an annual revision (“budget update”) takes place, where the government reports budget implementation to the Parliament and some adjustments to the coming year’s budget can be made. Uruguay has done significant improvements in budget management in the last decade since 2005, achieving great results in terms of financial stability and funding predictability for spending institutions. The governance of the budget process has shifted, with the leadership for the budget process being now in the National Budget Unit and the Macroeconomic Assessment Unit (both located in the Ministry of Economy and Finance), and the Office of Planning and Budget (located in the Presidency) developing planning functions. While the new roles and responsibilities seem quite clear today, they are not yet institutionalised. This budget review aims to provide a detailed description of how Uruguay’s budget institutions work today and present roles and responsibilities of each actor in the budget process. It also analyses Uruguay’s budget practices in the light of OECD countries best practices, and proposes policy recommendations for further modernising Uruguay’s budget process, in particular in the areas of aligning the budget with medium-term strategic planning and measuring results.
EL codes: H50, H61, H80
Keywords: Uruguay, Five-year budget, Budget process, Strategic planning
Most of the difference in GDP per capita with highest countries at the OECD is explained by labour productivity. Although significant fluctuations over the past decade, it represents close to 57% lower than the top 17 OECD economies in 2014. Total factor productivity is currently the main driver of the labour productivity gap with respect to the United States.
El sistema educativo en Uruguay logró buenos progresos en educación inicial y primaria. En educación primaria se logró la universalización. Además, el acceso a la educación inicial es bueno entre niños de 4 y 5 años, con tasas de cobertura considerablemente superiores al promedio de la región. No obstante, las tasas de culminación del primer ciclo y segundo ciclo de educación media siguen siendo insatisfactorias. La proporción de alumnos de 15 a 24 años que finalizaron la educación media es una de las más bajas de la Latinoamérica y logró muy pocos avances durante las últimas décadas en comparación con otros países de la región (un 29,7% en 2010 comparado con un 22,4% en 1990). Uruguay presenta también tasas de repetición muy elevadas en comparación con la región y a nivel internacional, lo que produce una gran cantidad de alumnos con extraedad. No obstante, la tasa de repetición de las escuelas públicas de educación primaria disminuyó desde 2002 y se redujo casi a la mitad para 2013. Por su parte, los logros de los estudiantes en las evaluaciones internacionales disminuyeron, pero se mantienen por encima del promedio regional. Una de las principales preocupaciones es la significativa proporción de alumnos con bajo rendimiento en educación media. En la prueba PISA 2012, el 55,8% de los estudiantes obtuvo bajos niveles de rendimiento en matemáticas en comparación con el promedio de 23,0% de la OCDE.