Competitiveness Forum Raises Uruguay's Profile in the Americas

Ambassador Baxter and Uruguay delegation have successful meetings in Atlanta
By Leigh Miller

The second annual Americas Competitiveness Forum held August 17-19 in Atlanta, Georgia, was an opportunity for Uruguay to raise its profile as an innovation center in the Americas, according to U.S. Ambassador Frank Baxter.

Baxter and Uruguay Industry, Energy & Mining Minister Daniel Martinez led a Uruguayan delegation to the event, which brought together public and private sector actors from the Western Hemisphere to discuss strategies for innovation and economic growth. More than 1,000 attendees from business, government, academia and non-governmental organizations in at least 25 countries attended the forum, which was organized by the U.S. State Department.

“This was an opportunity to learn about best practices for competitiveness from peers in other countries,” Baxter said in an interview following the conference. “Sure, there’s competition, but the market is so broad that there is room for learning from each other about how to succeed in the world economy.”

Ambassador Baxter stressed that the development of human capital “should be the No. 1 priority for any country or entity that wants to be competitive,” adding that the Atlanta conference highlighted the importance of educational partnerships between universities and private industry.

He said that developing such academia-industry relationships is one area in which Uruguay has room to grow. One of his meetings in Atlanta, along with Minister Martinez and U.S. Embassy Political Officer Jack Doutrich, involved a discussion with the Georgia Institute of Technology, the University of Georgia and the Georgia Energy Innovation Center about potential cooperation with Uruguay for renewable energy projects.

Although Atlanta-based Southern Co., the world’s eighth-largest utility company, has divested its international holdings, Ambassador Baxter said his meeting with company representatives proved useful for learning about the potential for Uruguay to further its cellulosic biofuel power generation capabilities.

“There are so many opportunities out there, but you have to look for them. Uruguay has to initiate the conversations,” Baxter said, adding that it was encouraging that such a substantial delegation from Uruguay attended the Atlanta forum.

Several Uruguayan business and government officials spoke on discussion panels at the forum, and met with counterparts from U.S. states and other countries to share best practices on technology transfer, economic development and small business innovation.

Rodolfo Oppenheimer, senior partner of Prosperitas Capital Partners, a financial management company that established the first venture capital fund in Uruguay, participated on a panel about the development of venture capital in Latin America.

Uruguay has begun the process of creating venture capital markets to support Uruguayan entrepreneurs and small businesses, Mr. Oppenheimer said, by following the U.S. model that first develops seed capital, then angel investors, followed by venture capital funds and, finally, mature capital markets. “Now we just need to allow our VC companies to mature,” he said in an interview after the Atlanta conference.

“I think we are headed in the right direction. We need to talk about it day in and day out. The U.S. ambassador [Baxter] is doing a fabulous job of bringing the right individuals from the U.S. to talk to Uruguay about creating capital markets,” Mr. Oppenheimer added.

He said that the Atlanta conference was useful for talking with policy makers from around the hemisphere about strategies that his company can use to develop the right environment for the growth of venture capital in Uruguay. Montevideo-based Prosperitas invests in small- and medium-sized companies with technologies for the information technology, service and agribusiness industries.

Isidoro Hodara, vice president of Zonamerica, a business park in Uruguay, attended the Atlanta forum to learn about developing closer relationships between universities and entrepreneurs. “In addition to networking, the usefulness of this forum lies also in learning what other countries are doing to increase their competitiveness. This gives us a much better position from which to judge what to do in the future,” he said. Dr. Hodara is also an international affairs professor at Universidad ORT Uruguay in Montevideo.

Miguel Brechner, president of the Uruguay Technological Laboratory, a government-funded, privately operated organization, spoke at the forum about the country’s innovation in public-private partnerships. Among other projects, his lab is handling the roll-out of the international “One Laptop Per Child” program, which provides a laptop computer to each public school child in Uruguay.

Santiago Sotuyo, director of Uruguay's National Ports Administration, and Fernando Brun, head of the country’s National Research and Innovation Agency, also attended the forum with Ambassador Baxter and Minister Martinez.

Baxter noted that Uruguay is hoping to host a second annual Americas Innovation Forum in April 2009. The first innovation forum, held in Punta del Este at the end of March, drew attendees from Latin America to discuss strategies for innovation. It was modeled after the inaugural the Americas Competitiveness Forum in Atlanta in 2007.

The third annual Americas Competitiveness Forum is to be held in Chile in 2009.

Visit www.competitivenessforum.org for more information about the event.

United States at “Turning Point” as Voters Go to Polls November 4

Major shifts in U.S. society suggest 2008 election particularly significant

By Eric Green

The 2008 U.S. presidential election campaign will reflect dramatic changes in American society, political analysts tell America.gov.
Iowa State University political science professor Steffen Schmidt said the 2008 vote will be a “watershed, seriously important election.”
The election would be important, he said, even without a global terrorism threat, or that the presumed presidential nominees are Republican John McCain and Democrat Barack Obama, who could be the first African-American U.S. president.
Important elections occur “when there is a general shift in the paradigm [basic structure] of society,” Schmidt said Examples in U.S. history include the 1861-1865 Civil War and the Great Depression of the 1930s.
Schmidt said 2008 is a “threshold year when the full impact of globalization is making itself felt in full force, and the U.S. economy has now shifted so that most Americans are no longer working in stable lifelong jobs.” Instead, Schmidt said, “we are becoming a very fast-moving, innovative and novel economy -- the first 21st century economy.”
The election, he said, marks the “end of the cheap energy period and the need to shift to new energies and technologies which can be accelerated or slowed by good or bad national government policies.”
These challenges face “whoever becomes U.S. president in 2008,” Schmidt said.
Schmidt said older Americans will be “critically important in 2008 simply because their numbers are huge and they are facing the economic [income, job and pension] and health consequences of the 21st century economy and they are very concerned” about those issues.
The candidate who “can see what the next 50 years will require to keep us competitive, wealthy, and strong and who can articulate that to voters will win the election,” said Schmidt.
UNITED STATES FACES ENORMOUS CHALLENGES
Allan Lichtman, a history professor at American University in Washington, said 2008 ranks “among the most important elections in U.S. history because America is at a turning point today.”
“There are enormous challenges abroad with two wars raging” in Iraq and Afghanistan, and the United States faces an “enormous challenge in terms of how we get off the fossil fuel economy and ensure our children a future,” said Lichtman, who will be in Russia September 15-30 for the State Department’s U.S. Speaker and Specialist program. Lichtman will “impersonate” Obama in the staging of up to five U.S.-style presidential debates to heighten Russian awareness of the American election process.
The presidential election will show the conflicting pressures older voters face in casting their votes, Lichtman said. Many older voters, he said, identify with McCain because the Arizona senator is 71, but have views on the issues more compatible with those of Obama, who will be 47 when the election occurs. Lichtman said the Illinois senator showed during the Democratic primaries that he can motivate younger voters “but the open question is whether they will show up at the polls and vote where they haven’t in the past.”
Young people “are the hardest voters to turn on and the easiest voters to turn off,” said Lichtman.
OBAMA CAMPAIGN OF HISTORIC SIGNIFICANCE
Cary Covington, a political science professor at the University of Iowa, said the election is important on at least two levels.
“First, and most obviously, the symbolism of an African American running for the highest office in the country is, regardless of whether he wins or loses, of historic significance,” said Covington.
On a substantive level, Covington said, the country’s choice between McCain and Obama will be “critical to foreign affairs. Differences between the two candidates on domestic issues are, of course, important. But presidents cannot determine our path in domestic affairs the way they can in foreign affairs.”
Covington said presidents can use their leadership role in foreign affairs to pressure the U.S. Congress to “endorse their preferred policies in ways that they cannot do in domestic policy.”
McCain is more attuned to President Bush’s “unilateral approach to foreign policy” and his “reliance on ‘hard’ foreign policy tools like the military,” Covington said.
Obama, in contrast, “appears to prefer to act multilaterally, much like” the first President Bush as he prepared for the 1991 Gulf War, Covington said.
He added that Obama also seems “inclined to lead with the ‘soft’ foreign policy tools of diplomacy and to rely on military force only if the diplomatic efforts fail.”
This difference, Covington said, is “important because the rest of the world is likely to respond quite differently to a continuation of the Bush approach than to the change embodied by Obama,” who will give U.S. allies a “sense of inclusion and a stake in outcomes.”
Covington said the differences in the approaches of McCain and Obama are likely to influence foreign policy more significantly than domestic policies.
For information on the foreign policy positions of McCain and Obama, see “Candidate McCain Aims to Revitalize U.S. Global Standing” and “Obama Emphasizes Multilateral U.S. Foreign Policymaking.”

Donation of Books on Honing Debate and Language Skills

Each of the 250 public high schools in Uruguay will receive a set of books
250 sets of three English books --Discussion, Discover Debate and Getting Ready for Speech-- by Michael Lubetsky, Charles LeBeau and David Harrington, intended for each of the 250 public high schools in Uruguay were presented to a group of English teacher trainers from across the country on July 30, 2008. The books will allow implementation of American English-based debate and speech courses in Uruguayan schools. Students will learn how to examine, question, defend and refute opinions, improve grammar, vocabulary, and listening skills along with speech delivery and organizational skills.

Remarks by Ambassador Baxter at Marketing Management Association Luncheon

Uruguay-U.S. Bilateral Relations: Constructing a New Reality?
Remarks by U.S. Ambassador Frank E. Baxter
Asociacion de Dirigentes de Marketing del Uruguay (ADM)
Montevideo, Uruguay

July 30, 2008

(begin transcript)

Muchas gracias. Es un honor y un privilegio para mí dirigirme a tan selecto grupo de líderes uruguayos. Y también lo hago con mucha humildad. Los uruguayos parecen ser excelentes oradores por naturaleza. Con frecuencia, mientras miro las noticias en televisión, me asombra ver a los uruguayos que son entrevistados en la calle. Todos parecen ser Cicerón. Nunca seré Cicerón, pero puedo ser un poco mejor en mi lengua materna, de modo que continuaré en inglés. Les agradezco me disculpen.

I have been asked whether Uruguay and the United States are constructing a new reality. My answer is a resounding and positive yes. I think our relationship is advancing economically, politically, socially and culturally. Further, I think that citizens of both of our countries are benefiting and will benefit more from this evolving reality. Today, I would like to talk about that evolution.

To discuss this subject, it is very appropriate to be addressing a group dedicated to marketing. Marketing is essential to a free society and a global economy. Every individual and every group, including every city, region and country has a brand. A quick definition of a brand is that it is the perception that others have about an individual, a group, or a product. Companies spend millions in advertising in order to improve their brand and have customers think favorably about them. In our global economy, it is essential to continuously manage your brand. It is necessary to be clear about target audiences and to constantly sharpen the message. Uruguay has been working on its brand with the “Uruguay Natural” campaign and considerable outreach. Our embassy has sponsored at least 10 delegations to trade fairs over the last year. Your profile has been raised around the world and especially in my country. However, there is more to be done. I have heard you described as a secret paradise. I am sure that you can still be a paradise without being such a secret.

It’s a happy coincidence that today is also the 61st birthday of my friend Arnold Schwarzenegger. I mention Governor Schwarzenegger because besides being a good friend, he is also an inspiration. He represents many of the values and opportunities that have made the United States such a great country over the last two centuries. He arrived in the United States at the age of 21 with but a dream. Forty years later, he has become one of the most successful public figures in the United States He has said: “If you work hard and play by the rules, this country is truly open to you. You can achieve anything.” I believe that, and I know that most Uruguayans feel the same about your country.

In my 20 months as U.S. Ambassador to Uruguay, I have gotten to know many of you, and have often said that you are the nicest and kindest people in the world. Your hospitality and kindness to my wife, Kathy, and me have been incredible. Mi esposa y yo nos sentimos como en nuestra casa, tanto en Montevideo como en cualquier lugar del interior. Gracias, gracias y muchisimas gracias! While officially I represent the President, in reality we both represent the people of the United States. The strength of our country is not so much its government as it is its people. We, like you, are a nation of immigrants. It is always important to remember that we are really some 300 million different persons with some important common values. It is impossible to accurately generalize about us. Generalizations about both of our countries are usually more misleading than enlightening.

Since I represent the people of the U.S., Kathy and I have wanted to get to know the people of Uruguay as much as we can. In order to do that, we have tried to visit every part of your country. By next month we will have been to all 19 departments, many more than once. Some generalities about you that I feel comfortable with are that you are the nicest people I have met. You are very creative in the arts and music, but also in businesses like software and animation. You have a stable society. And you certainly have a beautiful country.

The world is changing rapidly, and my country is no exception. Soon we will have a new President and Congress. Regardless of who emerges victorious, I expect a continuation of the very positive view of Uruguay that Washington now has.

Another change is that we are presently experiencing some economic challenges. Our financial sector has been too exuberant and leveraged in financing homebuilding, and is suffering huge capital losses. Many new homebuyers have been unable to pay their mortgages. The concurrent drop in home prices has resulted in weakness in the retail sector. Petroleum dependent businesses have also been having a hard time. There is little consensus among economists. In the latest Wall Street Journal poll, slightly over ½ of them thought that the U.S. is in recession. In fact, parts of our economy remain strong. This is especially true in export industries. Our government and central bank have instituted very proactive fiscal and monetary policies addressing the weaknesses in our financial sector, stimulating the economy, and helping troubled home owners. The economy has been the number one topic recently in the presidential race.

Although I make no claims to be a forecaster, I don’t expect the difficulties in our financial sector to travel to Uruguay. Your banks do not appear to have anywhere near that kind of leverage.

One area which both countries need to carefully watch is the increasing prices of some commodities. Inflation impedes growth and is especially hard on working people.

For the longer term, I am very optimistic about our economic future. Businesses in our economy learn from setbacks, and emerge stronger than ever. Some of the doomsday scenarios we hear don’t strike me as very realistic. However, since forecasting isn’t especially reliable, it is always wise to be prepared for anything. It is also wise to remember that, in finance, hope is not a strategy.

There are also changes in our military. For more than a century, we been active in disaster relief around the world If there is a flood, a tsunami, an earthquake, or a fire it is likely that our military will be there assisting. Today, much more emphasis and resources are being devoted to preparation for and anticipation of disasters. We feel that an essential part of peace keeping is to reach out to friendly nations to help in training, including building medical and educational infrastructure. In our training exercises in the region, we have been able to provide lasting benefits such as schools and clinics.

Here I would like to applaud Uruguay for its inspiring leadership in peace keeping. Your contribution to United Nations peace keeping programs is an example for the world.

Despite all of the recent controversy about immigration in my country, it remains as one of the most open countries to legal immigrants and non-immigrants in the world. For instance, hundreds of thousands of people whose heritage is Latin American become U.S. citizens every year. Many of those new citizens continue to support their native countries with remittances and in other ways.

We are very open in many ways. We import over $6 billion in goods and services every single day. We educate hundreds of thousands of students from foreign lands. We welcome artists, politicians, government officials, teachers and others from all over the world. We have welcomed millions of refuges. We are a leading tourist destination. The lower dollar makes us a real bargain. Incidently, our consulate approves over 90% of all non-immigrant visa applicants.

The relationship between our countries has flourished for a long time. General Artigas expressed approval of our constitution, and there were communications between him and the U.S. government during the early part of the 19th century In 1817 our President Madison sent sailors from Baltimore to fight on the General’s side against a Portuguese blockade. When the general had to go into exile, President Monroe offered him a place to live and a pension, although he decided to stay closer to Uruguay by moving to Paraguay. In 1852, Uruguay and the United States signed a Treaty of Friendship, Commerce and Navigation in which we pledged “perpetual friendship between the U.S. and its citizens on one part, and Uruguay and its citizens, on the other part.” Our pledge still stands today. At the height of the 2002 crisis, the U.S. granted Uruguay a 1.5 billion dollar bridge loan and pressed the IMF hard to negotiate a long-term plan with Uruguay. We reopened our market to Uruguayan beef in record time. And our relationship continues to be very robust today.

In the past four years we have signed four important agreements:

1. In 2004, we signed an Open Skies Agreement to improve the air linkages in both our countries. It allows for extending flight frequencies and destinations.
2. In 2005, we signed a Bilateral Investment Treaty, known as the BIT, to protect and to promote bilateral investments.
3. In January 2007, we signed a Trade and Investment Framework Agreement, the TIFA. The TIFA is an excellent instrument for achieving substantial progress in many trade areas. Some 11 working groups are in constant communication, and their work has already yielded concrete results. The opening of the $180 million blueberry market to Uruguay was negotiated under the TIFA and we are also working on certifying de-boned lamb and in the longer term, citrus. We expect that later this year we will be signing agreements under the TIFA concerning the environment, e-commerce and business development.
4. As a result of the TIFA, in May of this year, we signed a Bilateral Science and Technology Cooperation Agreement. The new agreement provides a mechanism through which the United States and Uruguay can broaden cooperation in all scientific and technology fields, and move forward in areas of collaboration such as energy, health issues, science and technology education, engineering, sustainable development, agriculture, and natural resources. It will support government-to-government exchanges and scientific partnerships between private, academic, and non-governmental entities.

To follow up on the Science and Technology agreement our Undersecretary of State for Democracy and Global Affairs, Paula Dobriansky recently brought a blue ribbon delegation of scientists and doctors to Uruguay to discuss possible exchanges and joint projects.

In the last eighteen months Uruguay has been host not only to our President, but to the most important four members of our cabinet (Labor, Treasury, Commerce and State). In addition, U.S. Trade Representatives, Congressional Delegations, and several high-ranking officials from other Departments have visited the country. President Vazquez and many cabinet members have visited the U.S.. There is activity between most of our Cabinet Departments and commensurate Uruguayan Ministries.

As Ambassador I have made seven trips to Washington on Uruguay business, I have been with President Vazquez on his visit to California, where he had a successful meeting with Governor Schwarzenegger. I have also had two other meetings with a number of California businessmen. I have been to Montevideo, Minnesota, where they celebrated General Artigas’s birthday, and I have visited the partners of Uruguay in Minneapolis. I was with the Uruguayan delegation to the Americas Competitiveness Forum in Atlanta, which was the forerunner of the incredibly successful Americas Innovation forum held in Punta del Este in March. We have had scores of important visitors from all walks of life from the U.S. In our residence we have hosted over 6000 people from all over the world as well as Uruguayans. I know that many of you have been there. Mi casa is su casa.

The United States has a strong interest in constructive relationships with countries that respect fundamental democratic values and the rule of law. We will work closely with any government, regardless of its ideological persuasion, as long as it is committed to our shared principles and the well-being of its citizens. Therefore, Uruguay is very important to the United States. Economically, we see you as a valuable example of a stable, well-managed economy governed by sound market principles. Politically, you have the values, and the institutions needed to sustain a vibrant democracy. Socially, you are an example of rationality in a sometimes volatile region. I like to use a boxing analogy about you which is that you punch above your weight! My friend Arnold has said: “Strength does not come from winning. Your struggles develop your strengths. When you go through hardships and decide not to surrender, that is strength.” We see a Uruguay that has gone through recent struggles, a Uruguay that in spite of it all did not surrender, a Uruguay that is now much stronger and much better prepared to take on any hardships, as well as opportunities, that the future may bring. You know that falling is not failure. The only failure is when you don’t get up again. We love that attitude.

We share beliefs that are essential to a free society:

• The belief that democracy, backed by free press, regular and transparent elections, and the rule of law, is the most effective and moral form of government.
• The belief that the free market, under the rule of law, with universal education, and effective support for the less fortunate are the best ways to develop economies and reduce poverty.
• The belief in the role of civil societies in the formation and policies of modern democracies.

In terms of commerce, we recognize that Uruguay has an excellent environment in which to do business. You enjoy many conditions which are unequaled in Latin America. You boast one of the best telecommunications systems in the region, You have good infrastructure and transportation networks which you are striving to improve. Montevideo has a world-class natural port and Uruguay’s secondary ports give access a waterway that flows deep into South America. Your port expansion plans are very creative and exciting. The new Airport terminal plus the expansion of Pluna will make you an even more important logistical hub.

You have a creative population, highly literate and capable, which, with the right training, can be able to adapt quickly to the technological changes that are required to compete today. You have the most even income distribution in Latin America, which is attractive to businesses and investors. You have a transparent business environment. Additionally, you show economic prudence, reliability, and an independent legal system.

The U.S. is already a major investor in your country, with a stock of direct investment of over $600 million, according to our Department of Commerce. Over 100 U.S. companies work here, especially in forestry, tourism, transportation, telecommunications, services, and agriculture. Just four U.S. companies - Weyerhaeuser, the Conrad Hotel, McDonald's, and Sabre - generate approximately 3,000 high-quality direct jobs. Sabre already employs over 900 people, some of whom are Uruguayans who have been recruited home from abroad. Its campus looks like Silicon Valley. These are high-paying, high-value-added service jobs. Weyerhaeuser employs over 1,000 people in the interior. It makes special efforts to ensure its projects work hand in hand with nearby communities. It has changed the face of Tacuarembó, and I encourage you to go and see for yourselves the positive impact that it has had on that Department. The McDonald’s chain of restaurants employs over 1,000 young people across Uruguay, which is the first job for many of them. The Conrad Hotel employs approximately 900 people during the low season and 1,500 during the summer. I think you know the very positive effect the Conrad has had not only in Punta del Este but in Uruguay as a tourism destination as a whole. I am sure you also know the very positive impact on Uruguay from American Airlines’ direct Montevideo to Miami flights. I was recently on one of those flights in which American Airlines was hosting 11 travel agents in order to develop more tourism business. Both of these U.S. companies are increasingly helping position Uruguay as an easily-accessible and affordable international tourist destination.

I strongly believe that you have an attractive environnment and that much more investment can be available, under the right conditions. Investors from the U.S. as well as other nations are looking for opportunities around the world. Uruguay is very interesting because of its safety, its stability, its climate, and its time zone. To date your focus has been on Direct Foreign Investment including buying and/or developing existing resources such as timber, infrastructure, and agriculture. You are taking steps to make Uruguay significantly more important.

First, you are focusing more on human resources. You know that human capital is the most important capital in the 21st century. This is the key to having state of the art businesses locate here. U S high tech companies are looking for trained workers. You know that to be a more serious competitor you must produce more business people, engineers, computer specialists, technologists etc. Our Embassy is helping by being involved in the training of 20,000 young Uruguayans to learn English, which is an essential tool to compete in this. We are also soliciting scholarships from U S business schools for Uruguayan students. Our joint efforts through the Fulbright Commission to exchange scores of teachers and other experts produces a signficant contribution to your human capital. We support DESEM Junior Achievement which is teaching hundreds of young people how to be entrepreneurs. Project CEIBAL is an indication of your serious desire to be a competitor with high quality workers.

I also applaud your current focus on demographics. Recruiting and retaining talented Uruguayans must be be an important part of your human resource strategy. This is such a beautiful place to live, and today it isn’t necessary to leave in order to have a fulfilling career. Today, trained people can live anywhere and offer their services to the world. I like to say that today you can export your brain without sending your body along.

Looking at polls, it is clear that most Uruguayan youth do not want to pursue a business career. Instead they would rather be in a profession such as medicine or law. I can identify with them. Ever since I was very young, I had wanted to be a lawyer. I envisioned myself using the law to fight for right and equality – but whether we like it or not, our lives are mostly the result of random events. It is said that if you want to make God laugh, tell him your plans. An important random event for me was that shortly after I finished high school, I joined the Air Force, instead of going on to university as I had planned. I hasten to add that I wound up flying typewriters rather than jets. While there, I met an airman slightly older than me who was trading in the stock market. I worked with him, for no pay, as he looked for investment opportunities. I became excited by the dynamics of finance and its role in creating value. In university I studied economics rather than law, and since have had a series of jobs as a trader, institutional salesman, investment banker and eventually running an investment banking firm. Because of a random set of events, I believe that I have been able to give more to society than if I had followed my original plan. In my former firm and the firms that we served, thousands of good jobs have been created. We also designed new processes that made financing more cost effective. I have been able to contribute significantly to education, health care, and the arts. I hope that more Uruguayan youth will take a look at business as a path to be creative, fulfilled and to make a contribution to society. Jose Pedro Varela, the father of Uruguayan free education started as a businessman. He said: “It is to the young people that I am speaking; from young people I expect everything.” Business is a very good way to meet those expectations. Bill Gates is an example of someone whose creativity has changed the world, and who now is using his resources to improve health and education around the world.

You are also beginning to address another necessary component for significant growth. That is the development of more sophisticated capital markets, and particularly revitalizing your stock market. As I mentioned before, direct investors are coming into Uruguay buying Uruguayan firms, and developing existing resources, such as timber and real estate. However, institutional investors, such as pension funds and mutual funds-which have the bulk of the world’s capital-, are also looking for ways to invest in this wonderful economy. Rather than running businesses themselves they want to buy shares in businesses. They need the vehicle of capital markets to invest in Uruguayan businesses, both existing growing companies as well as new ones. A liquid stock market provides many other benefits such encouraging risk capital for start ups and new ideas. Young people would be more anxious to stay home if they would have a better chance to develop their ideas here. A stock market also provides opportunities for existing business owners to liquefy without entirely selling out, thereby retaining their skills in Uruguayan businesses. In short, it will be impossible to achieve your full economic potential without viable capital markets. Having some background in this area, I stand ready to be of any help you wish.

Exports will always be a very major component of your economy. Over the last few years you have managed to diversify the variety and destination of your exports. The fact that your exports are shattering record after record is an excellent indication that your products are considered of excellent quality and price in markets world-wide. In 2007, the U.S. was the second largest buyer of Uruguayan products, purchasing just under half a billion dollars, or 11% of your total exports. Our total imports from you this year are way down, because other countries are willing to pay higher prices for your meat. This is a cyclical phenomenon which will change. For now, I feel lucky to have access to asados every day. Besides the traditional agricultural products, the U.S. purchased over three hundred different types of Uruguayan products including several non traditional exports such as gasoline (13% of the total exports to the U.S.), plywood, parts and accessories for motor vehicles, honey, and even floor tiles.

In fact, in 2007 the United States was the number one export destination of almost one hundred different Uruguayan products. Among these were:

• Sawed wood: taking almost 50% of the total exports (14.4 of 29.7 million dollars);
• Brake linings and pads: taking again almost 50% of the total exports (2.5 in 5.4 million);
• Live horses: again almost 50% of the total exports (1.6 in 3.3. million);
• Woven labels and badges: 22% of the total exports (.7 million in 3.2);
• Medical implants, mainly gastric stimulators, cardiac valves and parts for pacemakers: 55% of the total exports (0.8 million in 1.5);
• Breads and pastries, (HTSUS 1905), 26% of Uruguay’s total exports go to the U.S.. (1 in 3.9 million);
• Motorcycles and cycles fitted with an auxiliary motor: 62% (400,000 in 645,000)

I believe that we have only begun to tap the potential for more commercial activity.

The U.S. is the world’s largest market. As I mentioned previously, every day, we import over $6 billion in goods and services. The potential for Uruguay is virtually unlimited. As you know, the world economy is rapidly switching from an industrial economy to an information economy. Most of the employment growth in advanced developing countries and developed countries is in information technology and services. Actually, commodity and industrial employment is decreasing world wide. Uruguay has tremendous potential to take advantage of this trend. To capitalize, you will need to focus more on exporting molecules, bytes and services. These don’t face as many barriers such tariffs and quotas. Such a focus would be another factor in retaining your best talent.

In addition to information technology, I think the opportunities in tourism (including medical tourism), logistics, and alternative energy are also limitless. The U.S. is a demanding market. To win business, the customer has to come first. Those who want to sell in the U.S. must study the market and adapt to it. Quality, price and reliability are keys. Above all, you must market, market, and market. In my former firm, the motto was you go broke waiting for incoming calls. Marketing is not only for businesses. If academics, hospitals, labs, students or others look hard for opportunities in our country, I guarantee that they will find them. Our Embassy is always ready to be of help, but you must take the initiative.

There is much more to be done. Next month a delegation led by Minister Martinez is going to the Americas Competitiveness Forum in Atlanta. They will interact with businesses large and small, with academics, and with government officials from all over the hemisphere. Uruguay wants to have another Innovation Forum next year. I am sure that would be another big step in making you the innovation center of the Southern Cone or, probably, South America.

These are some of the things that are happening in this new reality. We are expanding our business ties, deepening our engagement, and are working together to improve the lives of the citizens of both of our countries. It is impossible to describe everything that is happening in and between free societies. I am certain that there are as many positive developments below the surface as those that we can see now. It is a very, very exciting time.

A muchos de ustedes les gusta decir que son un paísito. Hoy en día, ser un país pequeño es una gran ventaja. Se pueden adaptar a un mundo que cambia con mucha rapidez. Mi imagen de Uruguay es que es un país pequeño que piensa grande. Nos alegra que tengamos tantos lazos con este pequeño país que piensa tan en grande. Los lazos van en ambos sentidos. Hay un número importante de uruguayos / estadounidenses en cada segmento de la sociedad estadounidense. Muchos de ustedes tienen familiares en los Estados Unidos. Me alegra profundamente informarles que Kathy y yo tenemos una bisnieta nacida en Uruguay, de modo que siempre tendremos un vínculo muy personal con ustedes.

Mis buenos amigos, hemos hecho grandes cosas juntos en el pasado. Estamos haciendo grandes cosas en la actualidad. Tengo plena confianza de que lo mejor aún está por venir. Muchas gracias por todo.

(end transcript)

Virtual Enterprise Competition for Senior Public High School Students

Winning team will travel to the 2009 Free Enterprise Leadership Challenge in North Carolina

DESEM/Junior Achievement and the U.S. Embassy Montevideo are announcing this year's virtual enterprise competition for senior high school students from public institutions across Uruguay.
“Empresas Virtuales” – also known as Management & Economics Simulation Exercise – is a computer simulated program in which different companies must compete in the production and marketing of a product. Each group of students, composed of three participants, must create a company, give it a name, and expose it to competition. The different companies must “elaborate” a revolutionary product that involves a technological advance.
The objective of the program is to introduce 17 year old students from the public sector to the competitive market and to expose them to making business related decisions. The program also aims at providing the participants with the opportunity to interpret and analyze financial reports of a company, put into practice economic and administration concepts and make strategic decisions based on a deep analysis of the information.
The best six teams will compete “face to face” in an event to be held at the U.S. Embassy Montevideo, followed by an Awards Ceremony. The winning team will participate in the 2009 Free Enterprise Leadership Challenge organized by The Jesse Helmes Center at Wingate University, North Carolina.
The program will reach approximately 300 students throughout Uruguay. The competition will be between public high schools across the country through a web page specially designed for this game.
A group of volunteers from the U.S. Embassy will work as assessors giving advice, guiding the participants and transmitting their knowledge and experiences of the business world.
Further information and registration forms are available in Spanish on the embassy website.

Europe 60 Years After Marshall Plan

Transformative program was inspiration for several modern institutions

By Michael Buchanan

Washington -- When President Bush touched down in Slovenia June 9 for his last major visit to Europe, he set foot on a continent that has reinvented itself. From the devastation and division of World War II to the thriving European Union of today, Europe has experienced a renewal that has roots 60 years ago in the American Marshall Plan.
On April 3, 1948, U.S. President Harry Truman signed the Economic Recovery Act of 1948, which became known as the Marshall Plan after a speech given at Harvard University by Secretary of State George Marshall. Soon after becoming law, American aid shipments were flooding into Europe, and European leaders were taking the first steps of coordination that would lead to the formation of the European Union.
By the time the Marshall Plan ended at the beginning of 1952 -- five years after Marshall’s initial speech -- the United States had invested $13.3 billion, and the years 1948 to 1952 had recorded the fastest economic growth in European history.
At the time, British Foreign Secretary Ernest Bevin called the plan “a lifeline to sinking men” and an act of “generosity … beyond belief.” In 1947, Europe survived one of the worst winters in recorded history, and experts were predicting financial and social collapse.
MARSHALL’S SPEECH
“I need not tell you that the world situation is very serious,” Marshall -- a former soldier widely respected for his honesty and administrative skills -- began after a few introductory remarks. He went on to describe dire economic and social breakdowns that were bankrupting the European continent as it struggled to recover from the devastation of World War II.
Two years after the end of the war, Europeans had no products to sell for hard currency. Because of the money shortage, farmers were not able to sell their food. This resulted in a breakdown of economic activity and fear of widespread starvation while families and governments rapidly drained their savings to buy necessities. In Germany, money was so worthless that most purchases were made by trading cigarettes.
“Thus, a very serious situation is rapidly developing which bodes no good for the world,” Marshall said. “The modern system of the division of labor upon which the exchange of products is based is in danger of breaking down.”
Over the next three to four years, Europe required massive amounts of imported food and essential products, but had no way to pay for them.
“It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health in the world,” Marshall said. “Our policy is directed not against any country or doctrine, but against hunger, poverty, desperation and chaos. Its purpose should be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist.”
Marshall’s initial speech offered few details. Before the United States could move forward with large amounts of aid, “there must be some agreement among the countries of Europe” about how to spend the money, he said.
EUROPEAN REACTION
Within weeks, European governments -- led by France and Britain -- began drafting Marshall’s spending plan. The first request, for $29 billion in aid over four years, was rejected by the United States. Eventually, the parties cut the request in half.
Congress funded the first $5 billion for 18 months, with the remaining money appropriated only after careful review. The spending plan actually concluded about six months early, due to the outbreak of the Korean War and to the improving economic situation in Europe.
As European leaders first met to discuss the plan in July 1947, an editorial in LIFE -- an influential U.S. weekly magazine -- stated: “What Americans like about the Marshall Plan is that it points toward the triumph of a rational idea.” While history often is far from rational, it continued, “the Marshall Plan is a reminder that problems do have rational solutions, that some ideas are better than others, and that it is even possible to think them up well in advance of a crisis.”
TODAY’S EUROPEAN INSTITUTIONS
The Marshall Plan’s requirement for economic coordination set in motion a series of events and policy decisions that evolved into the modern institutions of European cooperation.
In March 1948, Britain, France and the Benelux countries (Belgium, the Netherlands and Luxembourg) signed a treaty establishing a military pact, aimed at collective defense as well as fostering cultural and economic integration. They sought more U.S. involvement, and the negotiations led, in April 1949, to the founding of NATO, which continues to integrate the defense of its democratic member nations.
In May 1950, former French Prime Minister Robert Schuman proposed joint management of the French and West German coal and steel industries. The “Schuman Plan” led in 1951 to the formation of the European Coal and Steel Community by West Germany, France, Italy and the Benelux countries. This led, in 1957, to the Treaty of Rome, which established Europe’s first full customs union, the European Economic Community, which is considered the founding organization of the modern European Union.
On the 60th anniversary of Marshall’s speech, the EU encompassed 27 nations and 500 million people, with a combined gross domestic product (GDP) of $14 trillion, exceeding the GDP of the United States.

http://uruguay.usembassy.gov/usaweb/2008/08-289EN.shtml

How Will Candidates Explain Stances on Meeting Hostile Leaders?

Political analysts detail candidates’ likely strategies
By Eric Green
Washington -- Senator John McCain and the man he is expected to face in November for the presidency, Senator Barack Obama, are presenting contrasting philosophies on whether to negotiate with hostile foreign dictators and rogue leaders, with the question becoming which position will be more attractive to American voters, according to a leading political analyst.
Illinois Senator Obama has stated his willingness to meet with Cuba’s Raúl Castro and Iran’s President Mahmoud Ahmadinejad. McCain, a senator from Arizona, opposes such talks, saying Obama’s stance would only embolden America’s “implacable foes.”
Norman Ornstein, resident scholar at the American Enterprise Institute for Public Policy Research in Washington, spoke recently with America.gov.
Ornstein, also an election analyst with the CBS Television Network, said, “What we know is that Americans, in principle, like the idea of talking to others, including adversaries; in that sense, Obama is on the right side of public opinion.”
The issue, said Ornstein, involves whether Obama’s approach -- “direct talks by the president, not surrogates, with no preconditions, only prearrangements -- will be seen as a sign of naiveté and inexperience.”
Ornstein said that to date, it appears Obama “has handled the issue adroitly enough. But more pitfalls remain, including making distinctions between Ahmadinejad” and the Hamas and Hezbollah terrorist groups, “and between Ahmadinejad and other Iranian leaders.”
For McCain, Ornstein said, the question is whether his attack on Obama on this issue looks like President Bush’s “policy of not talking to adversaries,” or whether the attempt to make a distinction between a U.S. secretary of state’s talking to a foreign adversary instead of a president “will resonate at all with voters.”
NBC ANALYST SAYS CANDIDATES USING NEGATIVE STEREOTYPES OF OPPONENT
Chuck Todd, political director for the NBC television network, told America.gov that the two candidates are trying to paint each other with negative stereotypes on whether an American president should meet with hostile foreign leaders.
Todd said the back-and-forth between the two candidates raises the question of which stereotype will prevail with U.S. voters.
Regarding Iran, Obama has claimed he never said he would talk directly with Ahmadinejad, only with Iranian leaders. This parsing of words, said Todd, might lead to a debate about who exactly is the leader of Iran.
In Obama’s campaign for the Democratic presidential nomination, said Todd, the Illinois senator sought to portray his opponent, Hillary Clinton, as “very Bush-like” and wanted to contrast his fresh take on foreign policy with the approach of the New York senator.
Obama “made some commitments that I think he wishes he had back, frankly,” said Todd. But Todd said Obama “thinks he can win” the argument about negotiating with dictators by saying McCain adheres too closely to President Bush’s more unilateral, hard-line foreign policy.
VIRGINIA POLITICAL ANALYST SAYS MCCAIN FACES TOUGH BATTLE
Political analyst Larry Sabato told America.gov that McCain “obviously has a very tough battle under adverse conditions that face any Republican” who runs for elected office in 2008.
McCain’s best tactic against Obama is charging the Democrat with inexperience, “especially as it applies to foreign affairs, the military, defense and national security,” said Sabato, a University of Virginia professor of politics.
Sabato said McCain’s job “is to paint Obama as too risky” and lacking “the experience to make rational and thoughtful decisions in the nation’s interests.”
McCain could employ the word “naïve” over and over again to define Obama, said Sabato, adding that other likely charges include “gullible and too trusting of these evil dictators around the world who would gladly slit our throats if they had the opportunity.”
Sabato said Obama could respond by casting himself in the youthful image of a new generation of leadership similar to that exemplified by John F. Kennedy, who said in his January 1961 presidential inaugural address that America should “never negotiate out of fear, but let us never fear to negotiate.”
McCain’s strategy is to press his argument about not negotiating with hostile dictators in such conservative-leaning states with large numbers of military personnel as Virginia, Sabato continued.
The Arizona senator also could try to make this appeal in Florida, Sabato said, which has conservative voters attached to the state’s many military installations and a large Cuban-American population that objects to talking to Cuba’s communist leaders.
For additional information, see “Candidates on the Issues.”

Famine Early Warning System Can Predict Food Shortages

Guinea-Bissau is a small country in West Africa. Complex patterns can be seen in the shallow waters along its coastline, where silt carried by the Geba and other rivers washes out into the Atlantic Ocean.

U.S. aid agency’s international network uses satellites to spot crop trends
By Cheryl Pellerin
Since 1985, when scientists first used satellites to produce continental-scale images of vegetation and crops across Africa, the U.S. Agency for International Development (USAID) has funded an effort that warns nations and regions months in advance of serious impending food shortages.
USAID established the famine early warning system (FEWS) to help prevent or respond to famine conditions in sub-Saharan Africa by giving decision makers specific information about drought conditions or dwindling crop yields based on satellite remote-sensing data.
Satellite sensors acquire images of the Earth and transmit the data to ground receiving stations worldwide. Once the raw images are processed, analysts can document changing environmental conditions like pollution, global climate change, natural resource distribution and urban growth.
In this effort, USAID partners with NASA, the National Oceanic and Atmospheric Administration (NOAA), the U.S. Geological Survey (USGS) and the U.S. Department of Agriculture in the United States, and collaborates with international, regional and national partners. Chemonics International, a global development firm, implements the program for USAID.
In 2000, the FEWS Network (FEWS NET) was formed to establish more effective, sustainable, African-led food security and partnerships to reduce the vulnerability of at-risk groups to famine and floods.
“At the beginning, it was primarily remote sensing,” Gary Eilerts, USAID program manager for FEWS NET, told America.gov. “It was pretty much looking at rainfall and vegetation and trying to say what we thought was happening in terms of food security.”
IMAGERY AND MARKETS
Today, he said, the program has 23 offices around the world where analysts combine maps, data and imagery with knowledge of local markets and trade in each country, and information about local livelihoods, to determine what food the market can buy locally, what it can bring in and what people can afford.
“Food security is a very complex phenomenon,” geographer Molly Brown, who works for the Biospherics Sciences Branch at NASA’s Goddard Space Flight Center in Maryland, told America.gov. “Just because you have green stuff on the ground doesn’t mean you’re producing anything in the way of food.”
USAID spent $14.9 million on FEWS NET activities in 2007, funding operations in 17 African nations; regional offices in Burkina Faso, Kenya and South Africa; and country offices in Afghanistan, Haiti and Guatemala.
In the field offices, analysts study satellite imagery, local livelihoods, food security and vulnerability, markets and trade, early warning systems and agricultural economics. They also plan contingencies for and responses to food issues.
The USGS employs regional scientists for Central America, East Africa, West Africa and Southern Africa who support FEWS NET activities and strengthen the technical capacity of regional and national institutions.
FEWS NET gets its warnings out through a mix of products that are printed and posted online, Charles Chopak, Chemonics’s chief of party for FEWS NET activities, told America.gov.
These include monthly food-security updates for the 23 countries and three regional offices that are targeted to technical readers in ministries of agriculture, finance and social welfare. Regular food-security outlooks -- maps updated semi-annually -- show projected food insecurity for a country.
“When a situation is emerging or evolving,” Chopak said, “we put out a one-page food-security alert that describes what’s causing the issue and what the impact will be on food security.”
In a typical year, FEWS NET analysts might be able to give warnings five months to six months in advance of a food problem. In a bad year, they might be able to give a one- to two-month warning.
Anyone can sign up for e-mail alerts on the FEWS NET Web site. Audiences for the warnings include local governments, U.N. agencies in FEWS NET countries, USAID missions and embassies, local and international nongovernmental organizations and food-security consultants.
FOOD CRISIS
The average price of rice worldwide has more than tripled since early 2006 and wheat, corn and soybean prices have more than doubled, triggering food riots and threatening to plunge more than 100 million people into deeper hunger and poverty. The causes of the crisis vary, but the result in many places is famine. (See “Multiple Factors Drive Up Global Food Prices.”)
The evolving and increasingly advanced work of FEWS NET becomes even more critical during such a crisis, Eilerts said.
“I spend about 80 percent of my time now dealing with that crisis,” he added. “It’s much more important to know what [food] is [available in countries] and what is not. And it’s much more important to be able to follow the changes over time because this problem will be with us for several more years, if not 10 more years.”
“We’re developing a series of products specifically to respond to people at various [technical] levels who want to monitor and take action on rising prices,” Chopak said.
One product will compare the main staple food of the poor in each country with a likely substitute and try to understand the relative price changes of each. Another product will examine a series of price changes in a region and explain the food-security effect of the change.
FEWS NET is adding to its monthly reports in each country an urban assessment and vulnerability section that discusses food-security issues in urban areas, which may be more vulnerable to food shortages than agricultural areas.
More information about FEWS NET is available at the USAID Web site.
For more about remote sensing systems, see. "U.S. Agencies Moving Forward in Planning Landsat 7 Successor."