February 6, 2014 
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In This Week's Issue:

Doing Business from the Uruguayan Perspective  

The Executive Tower

Understand the opportunities, take advantage of government business promotion programs and understand the local character. 

 

The first of a two-part series

 

By Mark Holston 

 

By the numbers and through recent accomplishments, Uruguay impresses. By most authoritative accounts, thanks to its fiscal policies and financial system, the República Oriental del Uruguay (The Eastern Republic of Uruguay), as it is officially known, was one of the few countries in the world not to experience the global recession of 2007. Instead, the nation has seen steady and healthy economic growth during the past decade. Its currency maintains a relatively constant valuation in relation to the U.S. dollar and other hard currencies. Its literacy rate of 98% is higher than that of neighboring countries. The purchasing power of Uruguayans ranks third in South America; according to recent World Bank statistics, annual per capita income is slightly over US$16,000.

 

The nation is also one of the most socially progressive in the Americas. In December 2013, it became the first in the world to legalize every aspect of marijuana possession, from cultivation to selling, purchasing and use. It is also in the vanguard of nations affording full rights to people who are gay and lesbian, including allowing same-sex marriage. In recognition of its progressive policies, the British newsmagazine The Economist named Uruguay its Country of the Year for 2013.  

Leftist Government is Business-Friendly

The administration of 78-year old President José Mujica represents a coalition of leftist parties that strive to continue Uruguay's tradition of supporting a broad network of social programs. It was among the first countries in the world to, in the 1920s, to establish a social security-style program. Mujica, a former anti-government guerrilla who was imprisoned for 14 years by the military dictatorship, leads by example, donating about 90% of his presidential salary to charitable organizations.

 

Streets of Montevideo

Although a political ally of such countries as Argentina and Venezuela, Uruguay has taken a more pragmatic course when it comes to fostering business relations with overseas firms and has not adopted an overtly anti-American stance. However, high taxes, needed to sustain the government's social programs, are an issue for many in the retail sector.

 

International monitoring organizations have given Uruguay high marks in competitiveness (3rd in Latin America), transparency and lack of corruption (2nd in Latin America), political stability (1st in Latin America) and economic freedom (2nd in South America). The country's communications and logistical infrastructure are also tops in the region; Montevideo's port is one of the largest and most efficient in South America, and its new international airport has been ranked among the best in the world. Our sister publication, Latin Business Chronicle, ranks it among the safest places in the region.

 

 

As in any country, two keys to successfully developing partnerships, new offices and new business in Uruguay are taking advantage of available resources and understanding the business culture.

 

Help for International Businesses: Uruguay XXI

In an effort to assist foreign firms and potential investors, Uruguay created a new organization with multi-ministry and agency representation that's designed to provide up-to-date information and help cut red tape. Uruguay XXI, the Investment and Export Promotion Institute, focuses on promoting the nation as "A Reliable Country."

 

The Uruguay XXI website, which includes a summary of laws that govern foreign investment, is available in Spanish, English and Portuguese versions.

 

Montevideo, Uruguay

Uruguayan Business Culture: Western European Roots

Philippe Pinet is the director of Muracciole, a Montevideo consulting firm that represents overseas business interests. He notes that although large U.S. corporations have a presence there, the country's historic economic ties are with Western Europe. "After all," he says, "we are all sons and daughters of Italy, Spain, France and other European countries."

 

Perhaps the most important thing a foreign businessperson should understand, says Pinet, is the national character. "We like to live without stress," he explains of Uruguayans in general. "We are not always chasing money. What's important is having a beach close to where you live, having your mate (herbal tea) when you want it, and spending the evenings with your family. In some ways, it's a poor way of thinking, but in others it's very intelligent. If you have enough to satisfy your lifestyle, there's little ambition to have more. People think differently here. Everyone seems to have time to talk for an hour about life and they're not stressed about needing to rush off to somewhere else."

 

But, Pinet adds, in business matters, it's critical to have a local contact. "You cannot make a deal with a Uruguayan without having a local contact to tell you who's who. It's very important to know how to get into different offices and make contacts. You have to know where and with whom."

 

In Part 2 of this report, a U.S. diplomat in Montevideo and a top educator share their perspectives on Uruguay's business climate.

 

The Executive Tower by Mark Holston; Streets of Montevideo by Mark Holston; Montevideo, Uruguay by Mark Holston

 

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Delta Air Lines appoints director for Brazil: Luciano Macagno responsible for leading commercial operations in world's fourth-largest aviation market

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Tungurahua volcano eruption
Travel News

Volcano, Flooding Updates

Ecuador's Tungurahua volcano erupted several times late last week and over the weekend, leaving behind a cloud of ash that is more than 2.5 miles (4 kilometers) high. Ash has forced some temporary closures of the Cuenca, Ecuador's Mariscal Lamar airport. Tungurahua is nearly 90 miles (140 kilometers) south of Quito; the ash has affected around one-third of the nation's provinces.

 

Heavy rains throughout Bolivia have caused flooding and landslides, particularly in the country's northern and eastern regions. Travel disruptions, including airport closures, are likely. Check in advance before traveling to or around the country. 

 

New Airline Routes and Route Changes

Mexico

Several airlines have cut flights to Venezuela in the wake of the government's reduction of the rate at which airline are reimbursed for ticket sales in Bolivars. Aeromexico reduced flights from Mexico City to Caracas to five weekly flights, down from seven. In March, Air Europa will end one of its weekly flights between Madrid and Caracas, leaving it with five. Air Canada will reduce its weekly flights between Toronto and Caracas to four in February and three in May (down from five currently).

 

Central America

United Air Lines will end its service between Washington, D.C.'s Dulles International Airport and San Salvador, El Salvador after March 14.

 

Caribbean

Seaborne Airlines will expand its service between Punta Cana, Dominican Republic and San Juan, Puerto Rico to daily beginning February 14.

San Juan, Puerto Rico

 

Seaborne Airlines will begin daily flights between Luis Muñoz Marin International Airport in San Juan, Puerto Rico and Santiago, Dominican Republic (Cibao International Airport) on March 15. That same day, Seaborne will also expand its service between San Juan and La Romana, Dominican Republic to daily (from Tuesday and Sunday).

 

Airline Alliance News

Copa Airlines Colombia and United Airlines launched codeshare operation on service between Panama City and the Colombia cities of Barranquilla, Bucaramanga, Cali, Cartagena, Cucuta, Medellin and San Andres Island.

 

Other Airline News

Seaborne Airlines became the first Caribbean-based airline to allow passengers to use portable electronic devices from "gate to gate."

 

The United States Federal Aviation Administration announced that India's civil aviation oversight no longer meets the standards of the International Civil Aviation Organization, and downgraded its status from Category 1 to Category 2. That means India-based airlines can still fly to the U.S., but cannot start new routes into that country. India recently approved hiring 75 more full-time aviation inspectors, and is working with the FAA to regain its Category 1 rating.

 

Southwest Airlines began serving New Belgium's Fat Tire craft beer on all flights, priced at US$5 per can. It joins U.S. carriers Frontier and Alaska Airlines in offering craft beer onboard.

Delta Sky Club Entrance

 

Between mid February and late April, Delta Air Lines is testing a variety of new complimentary foods and services in several Delta Sky Clubs in the U.S. Services being tested include complimentary shoe shines, manicures and chair massages. Foods include pancakes and "upgraded bagels" for breakfast, hot soups and sandwiches during lunchtime and hors d'oeuvres, antipasti and dessert during the evening.

 

Airport News

San Francisco International Airport (California, U.S.) opened its renovated Terminal 3, including the new Boarding Area E. T3E, as the airport calls the boarding area, is a major United Airlines point of departure and arrival, and includes new restaurants and retail, as well as free Wi-Fi, 375 power outlets, nine workstations and a yoga room.

 

Hotel News

The Hilton Curaçao has finished renovating its 196 guest rooms, which now include executive floor rooms and an executive lounge.

 

The 330-room Crowne Plaza JFK Airport New York City opened after multi-million-dollar renovation. The full-service InterContinental Hotels Group property is one-quarter mile from New York's John F. Kennedy International Airport and has both a free 24-hour airport shuttle and free parking. It also has free Internet access, a 24-hour market, a full-service restaurant, a fitness center and a "zen room" for yoga and meditation. It also offers 5,000 square feet of meeting space in nine meeting rooms, as well as a Presidential Suite.

 

The 401-room Hilton Garden Inn New York/Central Park South-Midtown West opened five blocks south of Columbus Circle in Manhattan. The hotel has complimentary Wi-Fi throughout, as well as remote printing, a 24-hour snack shop and an Empire Steak House. Two meeting rooms offer a total of 1,300 square feet of space.

Rio de Janeiro, Brazil

 

Hotel Pipeline

The Trump Hotel Collection expects to open its first South American property, the 171-room Trump Hotel Rio de Janeiro, in 2016. The hotel, which will include 10,000 square feet of meeting and event space and a pool deck with private cabanas, will be in the Barra de Tijuca district.

 

Best Western International plans to open 29 new hotels in Mexico, Central and South America during the next two years.

 

Hotel Loyalty Program Updates

From February 1 through April 30, Hilton's HHonors program is offering 1,000 bonus points for every eligible weeknight travelers stay at a participating hotel, as well as 5,000 bonus points for Thursday through Sunday stays of two or more nights. Registration is required, and many Hilton properties are not participating in the program.

 

IHG Rewards (formerly Priority Club Rewards) has a new list of 140 PointBreaks hotels, which can be booked for 5,000 loyalty points per night through March 31; normally, booking reward travel requires at least 10,000 loyalty points per night. 

 

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