Posts Tagged ‘economy’

Not so much news, but news. Nothing here changes, except for the worse.

I came here to fix my bank account and renew my cedula. You see, Uruguay does not believe that a bank is a place where you should put your money and let it sit unmolested for long periods of time. If you do not log in to your account online or move your money in some way, shape, of form, within 90 days, they will suspend everything.


So I arrived early enough to get to the bank at 1pm when it opens, and went in, and got the ghoul behind the desk to reset my account. Supposedly. “Check in an hour and see if you can log in.”

And so I did. Problem not solved. I checked again later. Problem not solved.

By this time I am in Punta del Este, where I cannot re-fix the problem I fixed once already, because you cannot fix or re-fix a given problem with your bank unless you go to the branch where you opened it, which in this case is not where I am staying. It matters not the fact that it is a national bank with branches everywhere; you still have to make face time. To fix a thing that should have been fixed when you fixed it with the first fix.

Fuck this place. A thousand times. I want to burn it all to the ground. But it’s all too soggy and moldy to light. And I am willing to bed that the sad, grey-faced people lack the ambition even to combust properly.

In good news, I did manage to get my cedula renewed in a single day. Now they have a chip and everything, and finally the cedula fits in your wallet like a normal card should, and looks like it might survive getting sent through the washing machine a few times. They still had like 5 people in the process to print out a single card, lest they make the critical mistake of allowing efficiency to come with automation. Those offices are made to house pointless workers, after all! Now advertising paid government jobs: Openings for Senior and Assistant Mouse clickers, Person who Removes Cedula from Printer, and Person who Passes Cedula to Client from Person who Removes Cedula from Printer.

Not sure how I feel about that. I kinda liked the old ones that looked like a preschooler put them together with paste and construction paper.

In other bad news, it is disturbing the number of people I knew here who are now dead.

And the number of people I knew here who have split up from their spouses.

And the number of people I knew here who have been robbed or mugged or burglarized.

Also in other bad news, the government of Uruguay, in its infinite wisdom, has shut down the duty-free border zone in Chuy, forcibly closing down the shops of perfectly decent merchants, and denying Uruguayans access to untaxed goods, because they believe it is better to force everyone to use existing monopolies that are whining about lost profits because the economic downturn is so bad. If things suck so bad for Uruguayans that they are willing to drive all the way up to the border with Brazil (in most cases a 5-hour drive, with probably more than US$30 in tolls and US$100 in fuel) in order to buy their stuff… well, maybe you should rethink your import policies? Just saying…

I’ve only been here a couple of days and can’t wait to get the F out of here. I’d rather spend this time living showerless in week-old clothes, in the airport in Sao Paulo.

“No big deal with inflation, I grew up in a country with 70%/80% inflation” ~Pepe Mujica

As it is often said, when Argentina gets sick, Uruguay catches a cold. It’s become quite evident over the past couple of years as Uruguay has suffered from Argentina’s inflation.

Not to worry, though, because the Supermen of Central Planning (TM) are on their way to fix it.

““There’s no big deal with inflation, it can be reined in and we are going to fix it. I grew up in a country with 70% and 80% inflation,” says Pepito. This statement lends yet more evidence to the fact that he was not “of the poor and for the poor” as the character he has invented for himself portrays. Inflation hits the poor the worst. I have often wondered how Uruguayans can afford to feed themselves, and the situation is getting worse for them through inflation.

According the the Supermen of Central Planning: Gabriel Frugoni, Jeronimo Roca, and Pedro Buonomo (from the Planning and Budget Office) say that “the main challenge for the Uruguayan economy is “competitiveness” because of the depreciation of the US dollar and strength of the Uruguayan Peso and its impact on non commodity exports with added value.”

Some solutions to this problem might be: reduce import taxes, simplify import/export procedures, and eliminate import monopolies.

The official solution: “drastic cuts in outlays or an increase in taxes” according to Andres Masoller, head of the Macroeconomic Department at the Ministerio de Economia y Finanzas, after declaring Uruguay’s fiscal situation to be “delicate.” 24 hours later he recanted, denying that any form of adjustment is necessary to constrain Uruguay’s growing budget outlays, explaining that “this does not imply a serious situation,” despite an 8.7% official (ie: low estimate) inflation rate and a budget deficit which looms over their heads as 2.8% of their GDP.

That’s in addition to a system with 60% import duty, 22% VAT, BPS, wealth taxes, land taxes, city taxes, and other miscellany which pretty much guarantees that 100% of every peso spent in Uruguay is eaten up by the government.

Another offered solution: higher taxes on companies’ profits and luxury goods. As if businesses in Uruguay can even make a profit if they follow the law to the letter. And luxury goods? EVERYTHING is a luxury good in Uruguay because nothing is made there beyond sad matchstick furniture and leaky-roof housing.

And the icing on the cake: “to keep advancing in wealth distribution” because that will certainly bring money and competitiveness to Uruguay. Because clearly it worked great for Lenin, Stalin, Adolf, Mao, Pol Pot, Kim Il Sung, Kim Jong Il, and the rest of the Crazy Brigade.

So long, Uruguay.

You can read more about this stuff here.

Argentina has another nail in its coffin. Price controls in all supermarkets, to be active for 2 months. How much you bet that store shelves start looking empty within a week or two? Or less?

We remind the reader that price controls have never worked. Ever. Throughout all known history. Simply because they are incompatible with simple mathematical and physical reality. And each and every time they have been tried, they end up in shortages. Look no further for a recent example than the glorious Bolivarian revolution in Venezuela to see how this plays out.

“This time will be different!” they think. Well, they can’t really get honest information anymore because they tend to arrest those who tell the truth about how printing too much money results in the loss of value and credibility.

I’ve gone past the point where I wonder if they really believe that they are doing the right thing, and now it’s clear that they know they are destroying their country, and don’t care. And the Argentine people will cart Kristina through the streets in her golden chariot, cheering as she brings the whole place down on their heads.

Read more here.

Also interesting commentary on ZeroHedge, here.

Thanks to SustainableBob for the heads-up.

Uruguayans return to find: expensive country, and little work.

Original article here on El Pais. Thanks to Beelzebob for the link. Awful translation by yours truly with help from The Google.

Gustavo came to stay, but only for seven months in Uruguay. Claudia took a year because she could not afford to buy a ticket to return to Canada. Returnees say they arrived with “false expectations,” and many decide to leave.

“The reality slaps me. Wakes me from this patriotic dream that I had. What was I thinking when I? (…) Today it starts all over again, my second migration (…) Uruguay has perfect sunsets on the Rambla, and then you have a barbecue with friends, mates, the stars of Cabo Polonio, it can be an enjoyable vacation.” This is one of the messages posted on her blog; it summarizes the feelings of many Uruguayans who returned to the country from abroad and clashed with a reality that was not what they expected.

They say that the consulates lied because the country is not better, as they were assured. “What has improved? You might find a job but you have to work three jobs to pay the rent, bills and eat” says Claudia, who lived in Canada for ten years and then came to Uruguay, where she says she is “just surviving “.

“As survival here is appalling, I am making plans to leave,” she says.

Claudia works in a mall, earns $10,000 (USD$500 per month), lives in a “horrible” pension apartment because, she says, it is all she can afford on her salary. She regrets that she made the decision to return. “This is not my country, my country is Canada that gave me everything and opened my doors. Uruguay gave me nothing,” she says with absolute coldness.

The housing and wages are the two major difficulties faced by returnees who come to the Ministry of Foreign Affairs. “For income, the Housing Ministry will ask for a deposit of $60,000 and that your balance is above who knows how many thousands of dollars. It’s Ridiculous,” says Claudia.

Gustavo spent seven months in Uruguay, after living eight years in Spain, and was able to rent an apartment from a former neighbor. “As I lived in that building for my whole life and the owner knew me, I was able to rent it, but it did not meet any of the standards that the State promised me,” he says.

Gustavo returned to Uruguay in January. He left Barcelona because he said his country was “very nice and very good to work in.”

“Then I found everything horrible. Aggressive people, dirty city, a lot of crime, and all expensive. It’s a very expensive country to live in. Food in Barcelona is half cost. You take 50 euros ($ 1,300) to the store and you leave with the car full, “says Gustavo.

His contact with the State was asking for help with housing. And the answer was the same that Claudia received. <the following untranslatable due to some weird bureaucratic Uruguayan thing which makes my brain derail, something about the Montevideo Intendencia and possibly an inheritance?>

“In the Administration, I was told that if the estate had no money, my wife should put a notice in the newspaper offering to work. That was all the advice,” he says.

The inheritance did not last long and the only job he got was as a watchman in a building, which received $ 11,000, less than he needed to pay his rent. Gustavo does not regret having returned to the country. “What happened to us was something we had to do to see for ourselves, and unfortunately Uruguay is lacking in many things. We arrived in late July, and we are here today, installed with all the things necessary for life,” he says.

ORGANIZATIONS. Organizations or groups returned to the country say they have made progress but are missing a lot because Uruguay has no return policy. “There is goodwill but that is not enough. The only place that does anything is the Foreign Ministry, which basically solves emergencies” commented the organization “Retornados a Montevideo” which represents 700 people.

The organizations recognize that the advice we must give today to the Uruguayans abroad is, “if you do not have jobs and money to afford safe housing, do not come.”

“From what we can see, most are leaving; and as many turn to go, because the advice we have to give, some people are angry because they don’t want to hear that in this country”, they say.


“It’s hard to leave but harder to be back in Uruguay, I spent five months and still have no job”


“Whoever says that Uruguay is well, lies; work there does not offer salaries to live”


“This is not my country, my country is Canada that gave me everything. Uruguay did not give me anything”

Web retornados

“Today begins my second migration without the pebble in the shoe to look back and think of Uruguay”


“Living in Uruguay is very expensive. The city is unsafe, dirty and full of aggressive people. I found another country”


“Outside we used to get the basics covered very quickly and with less work”


The capital that saved him


He went to the U.S. with his wife in 2000 and returned to Uruguay eleven years later because he could never get their papers. “I could bring savings and the car, so I took another way to get here,” says William. He bought shares in a cooperative ambulances and so far works there. His wife, however, has no job. The member of the organization “Volviendo al Uruguay” recognizes that if he got his papers he would go back. “Two months ago my daughter told me ‘you never told me why you came here, I miss everyone`. It killed me. ”

Seven fateful months


After spending seven months in Uruguay and returning to Barcelona in July, Gustavo Lopez says he is newly installed in the motherland. “I have my apartment with all my stuff,” he says and claims that the “boom” of Uruguay is a terrible crisis for any European. “Now we are in crisis and I am now as I was before I left,” he says. He insists that Uruguay is a very expensive country to live and that following their experience contacted dozens of people wanting to emigrate again.

El País Digital

According to this announcement, the Ministry of Economy and Finance and the Association of Uruguayan Supermarkets are putting a freeze on prices for over 200 supermarket products, in more than 300 stores, “in order to fight inflation.” Not only will the prices be frozen but they will be discounted 10%.

Our old friend Lorenzo, who scared off just about all the big fish from investing in Uruguay with his proposal and subsequent law to tax foreign holdings of UY residents, now thinks he can fix the problem with price controls. Well, it’s not just his idea; it’s the Association of Uruguayan Supermarkets too. They are “volunteering” to the price freeze. Why, who knows. Probably a political stunt. If they can afford to freeze prices *and* discount them, maybe they’ve been doing a bit of scalping. I’ve suspected this for a while.

Let’s see… every single time, ever, in all of recorded history, whenever price controls are enacted, that creates shortages of those goods and hoarding by those who have them. Why sell when the government forces you to do it at a loss? Those products then suddenly find themselves missing and/or not produced in the first place.

I have a prediction, based on this evidence from all of recorded history: those 200+ items will simply vanish from supermarket shelves and not be replaced. Meanwhile whoever actually produces them will either fill warehouses with unsold merchandise, or just stop production.

I also have a better suggestion to fight inflation: stop inflating the currency supply. All it takes is to do nothing, which Uruguayans are experts at. Doing nothing requires no employees, no printing press, no ledger entries.

I have been wondering for a long time how Uruguayans can afford to feed themselves as these crazy inflated prices. Now we see firsthand. And I don’t think it’s lack of material– there have been absurd prices on things that are sourced and made in-country. My opinion as to the price absurdity: Uruguayan greed. Really there’s no need to charge US$5 for 100 grams of cheese when it’s made in your backyard. Or $5 for a bag of potato chips which contains maybe 5 potatoes which cost a whopping 10 cents apiece from field to fryer?

Thanks to GermanBob for the link.

At the grocery store, while in search for some “quick” snack/lunch type stuff, I decided to throw a box of frozen empanadas into the cart.

6 frozen empanadas cost UY$134. That is 22 pesos each, about US$1.10

Not bad, considering. However the price of a fresh empanada in a “quick” restaurant, grocery store fiambreria, gas station, etc is about 25 pesos.

So, the ones in the box are cheaper. Or are they?

Let us calculate the cost of electricity to preheat the oven for 10 minutes and bake the empanadas for 20. Total 30 minutes used in a 2000-watt oven equals 1000 watts, or 1 kilowatt. Depending on the time of day and amount of total power you have used (it is a progressive scale), 1kw sells between 3 and 5 pesos. Which adds roughly 1 more peso to each empanada, bringing them to 23 pesos.

Considering you also have to keep them frozen and transport them to your house, we can make an educated guess that it probably adds 2 more pesos to the cost of each one, bringing them to equal the price of fresh empanadas. If you keep them frozen for a long time period, they will actually cost you more than getting them fresh at a restaurant.

To add insult to injury, the frozen empanadas rarely turn out right and “optimal cooking” usually makes them burnt at the edges and so soggy in the middle that they fall apart when you remove them from the oven (if they don’t stick to the tray and rip their guts out on retrieval). I could see spending less money on these things for the convenience of having them at home; however, now that I am calculating it in an official capacity, I can clearly see that there is absolutely no point to buying frozen empanadas here. You are paying an equal amount or more for an inferior product.

2 cheap frozen plain cheese pizzas cost UY$214.85, or $10.56. That’s $5.28 each. For the cheap kind. You can get Papa John’s to deliver more, better, fresher pizza to you for less than that. Or Pizza Hut. Regular price, 4 bucks, 4 bucks, 4 bucks. Oh, wait, we don’t have Papa John’s here, or Pizza Hut. Thank the Pizza Police. We only have pizza por metro in various places that cost more than this, for bland pizza that is cheap on sauce and cheese and toppings. One would think that pizza, being made of cheap ingredients, and with a pizzeria in every restaurant and at every corner mom-and-pop store in the country, it might be cheap. But alas, it is not. We need to keep that flavorless pizza culture protected!

In the search for a French Press and coffee grinder, WifeBob went to several places to see what she could find. Devoto Home had them for US$50 each and Bazaar Maldonado had them for US$12 each. Both within about a half-mile of each other. Obviously she paid $24 for both instead of $100 for both.