IDB supports Uruguay’s international strategic positioning

The Inter-American Development Bank (IDB) approved a $247 million credit to finance the third and last stage of a program that will help to consolidate Uruguay’s international positioning by attracting investments in high value-added sectors, improving the promotion and ease of trade and developing local innovation and technological absorptive capacities. 

The first stage of the Strategic International Positioning Project was approved in March of 2013 with an IDB financing of $550 million, and the second was approved in November of 2014 with a financing of $120 million. This is the third and last stage of this series of programmatic loans, with an option for deferred draw-down, in support of policy changes and is part of the precautionary financial policy undertaken by the country. 

“With this operation we complete a series of interventions to strengthen the regulatory and institutional framework for attracting investments, by simultaneously addressing cross-cutting factors and at the same time moving forward with reforms to improve measures for trade facilitation and access to third markets for the investments that arrive in the country,” said Pablo García, IDB project team leader. 

This third stage puts special emphasis on supporting actions to facilitate trade, such as the institutionalization of the Single Window for Foreign Trade, enactment of the new Customs Code of Uruguay and the training of the National Customs Directorate to carry out the changes in the new code. 

Other actions supported are the mainstreaming of the best international practices on the issue, such as the Single Customs Document, electronic seals, the risk management system and the work of a Qualified Economic Operator. 

The project also will contribute to improving local capabilities for innovation and technological absorption through reforms that will promote investigations, the formation of human capital and business innovation in established enterprises. 

On this issue, one specific part of the program includes activities that favor the development of new and innovative enterprises that can serve as a framework for implementing new ways to expand the population’s entrepreneurial capacity, and support the initial development of innovative undertakings through specialized services for incubation, seed capital and private investment funds. It will also promote links between enterprises and academia by creating or strengthening cooperative networks and sector technological centers. 

The IDB loan of $247 million is for 20 years, with the option of deferred draw-downs for up to three years, renewable for another three years, and an interest rate based on LIBOR. The interest applies only if Uruguay uses the loan.