As expats, we often need to change our money from one currency to another—usually from U.S. dollars to Uruguayan pesos, but also, when we take a trip to a neighboring country, we need to change our U.S. dollars or our Uruguayan pesos to Argentinean pesos or Brazilian reals.

We can do these exchanges at a bank, but most people prefer to do it at a cambio. Cambios are conveniently found everywhere in Uruguay. They have exchange rates prominently posted, and it pays to shop around as the rates certainly vary. Some cambios have an internet site that you can check ahead of time to see whether or not your local cambio is giving a good deal.

Before a recent trip to Argentina, we checked the rates at both our cambio and our bank. On that particular day, the bank offered slightly better rates than the cambio, so that is where we exchanged some U.S. dollars to Argentinean pesos. It is a very easy process at either the bank or the cambio. You give them the U.S. dollars; they give you the currency desired and a receipt of the transaction. And that’s it.

On another occasion, while in Jujuy in northern Argentina, we found we needed some more pesos. While out the evening before, I had looked for a cambio, but did not find one along the peatonal or around the central plaza. The next morning I enquired at the hotel desk. The manager said he could exchange my U.S. dollars but that a bank would give a better rate than he could offer. He was not aware of any cambios.

After standing in line at the first bank I found, I learned that they only exchange money for their own customers. They directed me to a nearby Banco Colombia. After another lengthy wait, I got my turn. I gave the teller two U.S. $100 bills. He scrutinized them and immediately rejected one as it had a tiny pen initial on it, something commonly done by banks and cambios when counting money. He would change only $100. Reluctantly, I agreed. That was just the start of the process.

First, I was asked for my passport, but presented instead my Uruguayan cedula. Next came the questions: When did I enter Argentina? How long did I plan to stay? Where did I stay last night? Where did I plan to stay tonight? Where was I born? Where do I live? What is the address? All the answers were duly recorded on his computer. Several forms were churned out of a printer. I had to sign one of them and then finally received pesos for my dollars. Wow! What a difference from the simplicity of the process in Uruguay.

The next day in Salta, I decided I would try again to change the flawed one hundred dollar bill. I had spotted a cambio on the central plaza. However as it was the Thursday before Easter weekend, it was closed. A cleaning person inside opened the door briefly to say that it would reopen on Tuesday next week and that all banks were closed for the long weekend.

Nearby, a man on the street corner quietly asked if I wanted to exchange money. I asked the rate. He offered better than Banco Colombia had given the day before. I quickly took out my flawed bill and handed it to him. With barely a glance, he put it into one pocket and extracted a thick wad of pesos from another. He counted off the amount promised and that was it. Quite the difference in process.

Now that I’m back in Uruguay, I appreciate the convenient and safe places to exchange money. It may take a bit longer than that street exchanger, but somehow it feels safer than somebody standing on a street corner. And, it certainly does not have the overly inquisitive, detail-oriented process of the bank in Argentina. And, by the way, the best exchange rate I received was from the bank in Uruguay!

Despite the international economic climate, part of the GDP growth is attributable to the increase in exports of goods and services by 2.5% showing the strong position of Uruguayan exports on the international market. Beef exports alone were up by 27% over the financial year to March 2010, according to analysts at Meat and Livestock Australia. Uruguay’s largest beef export increases were to Russia, up 90%, Asia, up 122%, and the EU, up 34%. These increases offset a decrease in exports to the U.S. of 28%, as Uruguayan beef exporters seek out other countries that are willing to pay higher prices.

The GDP benefits also from a strong domestic demand brought about by a domestic employment rise. Importantly, this trend is expected to continue with further economic growth of  4% to 5% forecasted for 2010.

Fiscal debt was up to 2.1% of GDP at the end of 2009, from 1.4% the year before, its highest figure since 2003. This was caused by higher energy generation and import costs. However, a return to stability in energy costs has seen this figure for the year ending end of Jan 2010 decrease from 2.1% to 1.8% of GDP. Analysts predict this figure to further decrease to 17% for the 2010 calendar year.

The Uruguayan manufacturing sector did experience a decrease of 3%, and some experts remain pessimistic about industrial exports due to the appreciation of the Peso. However, there was better news in the retail sector. An increase in sales of 3.8% has been attributed to lower unemployment rates, wage increases, and the UYO Peso appreciation. The unemployment rate currently stands at 6.3% and is not expected to decrease in the short term due to wage increases of 11.4%.

Uruguay had a record tourism industry year in 2009. According to MercoPress, 2.1 million visitors came to Uruguay during the year and spent almost 1.5 billion U.S. dollars, proving that even in the face of a dropping dollar and rising real estate and rental prices, Uruguay remained a sought-after vacation destination.

Two other Latin American countries that have weathered the global turndown were Bolivia, which grew by 3.7%, and Colombia, which expanded by 2.5%. Chile’s economy contracted by 1.5%, Venezuela’s by 2.9%, and Paraguay’s by 3.8%. Mexico was the worst hit showing negative growth of 6.5%.

Uruguay’s 2009 inflation rate of 5.9% was the fourth highest in the region. Venezuela had the highest inflation rate at 25%, a decrease on last year’s rate of 30.9%. Apart from Argentina, all countries saw a decrease in inflation in comparison to last year, and some even reported a deflation rate (Chile had a negative rate of 1.4%), further evidence of the global turndown.

Since his inauguration last month, Mujica has said that he will continue the economic policies of the previous government, which have increased foreign investment and lowered unemployment rates, and has pledged to focus on Uruguay’s long-term growth and competitiveness.

While we could plan a trip for ourselves, we decided we would like someone else to do it for us. There are a lot of travel agencies and tour companies in Uruguay. There is a fine one right here in Atlantida, where we live. However, we decided to try Geant Travel, an adjunct of the large Geant supermarket.

Why Geant? Well, I guess it’s advertising mostly. Over the past few months there have been a couple of television ads featured repeatedly. In one of them, a pleasant middle-aged travel agent approaches a hotel seeking a good rate for his clients, an anxious but enthusiastic family, who are standing in the background. After much friendly negotiating with the hotel manager, he procures the lodging for a fraction of the quoted price. In the other commercial, the same agent negotiates successfully with an airline. The commercials are humorous while effectively presenting the message that Geant can get you the best deal. This message sounded good to us.

We checked the offerings posted on their Internet site and found one that appealed to us a lot. It is a ten-day bus trip to the region around Salta in northern Argentina. You spend two nights on the bus, which has seats appropriate for sleeping and excellent services including meals, and seven nights in hotels. The hotels, which we also checked online are all fine quality and include breakfast. Your other meals while not on the bus are extra. The tour package was an amazing $614 per person. We quickly made the decision that this was the tour for us and went to the office where Pamela, a most pleasant agent, made the booking and accepted our deposit of $200. The receipt promises el precio mas bajo para viajar, the lowest price for travel. For this trip for sure, that is true. By the way, making the commitment early is also a good idea. The package cost now, closer to the departure date, has risen to $675 per person. Still a great deal, but we like our deal better.

We were excited about our plans and soon shared them with another expat couple living in Atlantida. They were so impressed that they immediately booked to come on the same tour. We are happy to enjoy the experience with friends. We can hardly wait until the departure date, near the end of March.

If the trip works out as well as advertised, we just might try one of their other offerings, like a nice package tour to tropical Brazil in July, as an escape from part of the cool Uruguayan winter. Our holiday escape of the moment, however, will be Argentina.

Easy access to interesting neighboring countries like Argentina or Brazil or Chile or Bolivia is just one of the many wonderful things about life in Uruguay.

“This represents a record both in the number of tourists and revenue for the country,” stated Tourism Minister Hector Lescano during a press junket featuring the country’s 2009 tourist data. Even more impressive is that these record numbers do not even include cruise visitors, which Lescano adds is “a booming industry.”

Even in the face of a dropping dollar and rising real estate and rental prices, Uruguay remained a sought-after vacation destination. “We must be proud of what was achieved since the tourism industry in Uruguay actually advanced several percentage points when overall in the region it was down by 5%”, said Lescano.

The numbers of Argentine tourists dropped by 3% but this decrease in numbers was counterbalanced by an influx of Brazilian tourists whose currency is strong. According to the national paper, El Pais, the 2009 summer season showed a 10% to 12% increase in foreign visitors on 2008. Over 950,000 people came to Uruguay to vacation, including a number of important regional and international celebrities. Colombian superstar Shakira keeps a home in Jose Ignacio and regularly summers in the area. American movie-stars Kevin Bacon and Bruce Willis joined the summering crowds in Jose Ignacio. Kevin Bacon supposedly even took to drinking yerba mate, the national drink of choice.

To give perspective to how important tourism has become to Uruguay, consider this: Tourism revenue in 2009 was higher than income generated by Uruguayan meat sales, the country’s main export item.

Numbers are expected to further increase in 2010

Thanks to a slew of new visitors and an increase in cruise ships docking in Montevideo and Punta del Este, these record-setting numbers are likely to be even higher in 2010. El Pais reported that 10,000 more vehicles crossed into Rocha this January compared to 2009, and nearly 20,000 more than in 2008. Argentineans and Uruguayans made up 95% of all visitors, with 68% being nationals. Of the total number of tourists to Rocha, 30% were first time guests.

Along with new visitors, the 2010 cruise ship season has been a busy one. Just this past week, four cruise ships docked in Montevideo at once, unloading 4,000 visitors to the old city. Each guest spent an average of US$60. The majority of the guests were Brazilian, while 19% were from the U.S. Last year cruise ships brought nearly 250,000 people (and consequently, US$15 million) into Uruguay. The great thing about cruises stopping in Montevideo is that though the visit is short, it often inspires a future return, or a consideration to buy a second home.

Along with cars and cruises, planes also brought thousands of extra tourists into the country this year. Thanks to the Open Air agreement, combined with increased services from Pluna and Aerolineas Aregentinas, nearly 15,000 people flew through Punta del Este’s airport. That is an increase of nearly 42% compared to last year.

Whether by air or sea, boat or bus, people are flocking to Uruguay in record numbers, and  the country merits this new-found attention. It is safe, beautiful, and from December to March, is a delightful retreat from the North American winter blues.

Read more here on MercoPress.

Written praise was coupled with revelations of new investments. Argentine businessman, Alejandro Bulgheroni, one of the key investors in Uruguay for more than 15 years, met privately with President-elect Mujica on Wednesday and announced new investments of over USD70 million.

Bulgheroni told the Uruguayan paper, El Observador, that he is very satisfied with the tone of President-elect Mujica and Vice President Danilo Astori. “I spoke to Mujica about how Uruguay is generally deficient in energy production. I believe the government is rightly oriented in seeking alternatives to resolve the problem.”

In Argentina, Bulgheroni specializes in petroleum. In Uruguay he has invested in energy, including in Petrobras and Ancap. His newly announced investments will likewise be directed to areas of new energy production.

Similary, Juan Carlos López Mena, President of Buquebus spoke to the Argentine newspaper, Perfil, praising the new government’s tone. He stated that Uruguay has a climate of, “reliability, transparency, and legal certainty.”

In the agriculture sector, Executive Director of the Argentine Rural Society, Marcelo Fielder, highlighted that one benefit of investing in Uruguay is that there are no state retentions, alluding to a controversial tactic employed by Argentine President Cristina Fernández.

“Here there are no retentions. If you invest in soy, you own the profits,” he told journalists at the event. In Argentina there is a flat fee of roughly 35% on all soybeans sold. These “retentions” support social programs in Argentina. Additionally, growers also pay sales taxes. Fielder added that although Uruguayan farmland might not be quite as good as in Argentina, the difference in governmental tax policy is value-added. He called Mujica a man of pragmatism, and added that the Uruguayan political scene is much more stable than Argentina’s.

“It makes me a little envious. Mujica raises the expectations of the business community so that Uruguay will be competitive with Chile, Brasil, Peru, all of which want to be in the first world. They are not content to stay in the third,” stated Héctor Méndez, CEO of the Industrial Union of Argentina. He added, “The day we lose hope [in Argentina], we will come and live in Uruguay.”

Translated in part from: http://www.observa.com.uy/Actualidad/nota.aspx?id=92942

Francisco Piria first saw the potential for this place back in 1890; he began purchasing land and building a Mediterranean-style seaside resort with subdivided lots for sale. It was the beginning of a golden era later characterized in Europe as la belle époque. In 1904, Piria completed the Grand Hotel, which featured Italian stylings and furnishings. By 1910, he had added the charming French-style Hotel Colon, in the very center of Piriapolis. The outbreak of World War I in 1914 marked the end of la belle époque in Europe, but Piriapolis had just commenced a train service to bring visitors to the resort spa and beaches. It was thriving. Piria’s biggest hotel, completed in 1930, was the grandly luxurious Hotel Argentino. Pirapolis would easily remain the best seaside resort of Uruguay into the later half of the twentieth century. 

Later in the century, nearby Punta del Este was the rising attraction. Still, the majority of Uruguayans and Argentineans went to Piriapolis to vacation. However, well before the end of the century, Punta del Este was clearly the premier resort of Uruguay and Piriapolis seemed but an aged ancestor.

And what of Piriapolis in the twenty-first century?

While the international jet set and the high rollers from Argentina and Brazil, along with thousands of others with cash and aspirations flocked to Punta del Este following the economic crisis in Argentina, a renewed interest in Piriapolis began; more specifically, in Piriapolis’ surrounding area. To the west are Playa Verde, Las Flores, Bella Vista, and Solis; and to the east, Punta Fria, San Francisco, and Punta Colorada; all serviced by Piriapolis.

There has traditionally been a strong British representation among the expats who reside in the string of communities to the west of Piriapolis. The numbers of year-round residents is growing. All these communities feature proximity to the sea and large lots. Real estate is relatively inexpensive. One resident commented: “We chose Solis because…we liked the area best and we have a…yard and the homes are not so much on top of each other as in Piria.”

The area to the east of Piriapolis is the favored place for upper-middle class Uruguayans who prospered after 2003. Spacious and well-built houses front small but beautiful beaches. Punta Colorado is particularly charming. Some have likened it to a fishing village; others to a small Californian beach town. Because ocean frontage is limited, the price of land has skyrocketed—a 1,100-square-meter lot that’s not even on the waterfront at Punta Colorada is listed for $130,000, while at San Francisco, there’s a waterfront 2,160-square-zmeter lot listed for $410,000, and a 700-square-meter lot on the waterfront for $80,000. Prices are better away from the water.

The new arrival of scores of expats to the Piriapolis area is relatively recent. Generally they come for the attractive affordability of the area. Uruguayan numbers are increasing too. Many of those already living in the department of Maldonado are moving to Piriapolis because of growing tourism, good transportation, and better value. One local entrepreneur noted, “the prices in [the city of] Maldonado are really very expensive for this type of neighborhood”. Retired Uruguayans are also choosing to come here. Furthermore, Uruguayans returning from abroad (as many as 20,000 Uruguayans are expected to return home from places like the U.S. and Spain in 2009 due to the world’s financial crisis) are flooding into the area. An American resident told me he knows of dozens who have returned just from Australia.

Great Summer Rental Potential

As a seaside resort, Piriapolis also holds great rental potential. Naturally, it attracts huge numbers of summer time visitors. Peak season runs from mid-December until 1st March when typical rental prices often reach double off-peak prices ($600 to $1,300 per month).

When we first saw Piriapolis in 2006, we were immediately impressed with the many kilometers of walks along the water constructed with the care of an earlier era, the dominating Cerro San Antonio, and the many boats in the splendid, sunny harbor. Here’s a more complete description from a resident: “In regards to Piriapolis I only have great things to say. I came here over five years ago to reside and it’s been marvelous. Like any beach town in Uruguay it has its peak time in summer and is a beautiful little town in the winter. It has all the necessary services without the huge chains like in other parts of the country. Only half an hour away from Punta del Este and the best restaurants, hotels, golf, casinos, etc., but far enough to not be involved in it. It’s the only place in Uruguay where you can find hills, ocean and several different types of beaches.” Yet, another resident has enthused, “Without question, this is the most beautiful place in the country.”

Whether as a delightful summer retreat or as an affordable, peaceful seaside home, Piriapolis has met the requirements of many. As we near completion of the first decade of the century, it seems the future of Piriapolis will be a fulfillment of the legacy began by Francisco Piria.

For a time, the jurisdiction over the island was shared by both countries. However, a treaty signed between them in 1973 established the island as Argentinean territory. Still, drones of Uruguayans come to visit each year due to its history and nature, and for its many attractions—the theater and cinema, the old prison, the museum, the ancient lighthouse, the nature trails, the political history of the region, as well as the most deliciouspanettones baked at the old island bakery

Martín García Island is located on the Río de la Plata in the mouth of the sandy Uruguay River. Even though it belongs to the Republic of Argentina, it lies closer to Uruguay than to the port of Tigre, in Argentina, which lies 35 kilometers away across the river.

It was discovered in February, 1516, by Juan Díaz de Solís, who came across the fresh waters of the Río de la Plata while searching for a passage between the Atlantic and the Pacific Oceans. Seeing that the sea had such a low concentration of salts, Solís referred to it as the “Mar Dulce” (Sea of Fresh Waters). It was during these explorations that the island was found. One of the most beloved members of the crew died during this expedition coming from the high seas. As a tribute to him, the newly found island was called “Martín García”.

The 1,800 million year old island lies 27 meters above sea level, and is humid enough to shelter many rare species of vegetation. The rainforest is in the shape of a gallery and it is inhabited by the typical wildlife of the littoral area.

In colonial times, when a trip to the island took days, it was used to hold the most dangerous prisoners from the cities of Montevideo and neighboring Buenos Aires. No one could escape, as the surrounding Río de la Plata in this area is intolerant and extremely wide, and it is impossible to swim across it.

The prisoners used to work in the granite quarries (today flooded by a beautiful lagoon teeming with aquatic plants). The cobblestones were dumped into large carts that reached the island pier through a system of reels, and then loaded onto boats.

These first cobblestones gave origin to the streets located in the area known today as the historical district of Montevideo, both in the port lanes and in the old city markets.

Martín García island witnessed countless battles in the river over the domination of these waters. It watched Almirante Brown flee toward Montevideo and then saw him invite the Spanish troops to sink in the place known as Bajos del Temor (feared shallow waters). It was a leprosarium and quarantine port during the cholera and yellow fever epidemics that hit Montevideo and Buenos Aires. And it was home to poet Rubén Dario.

There are regular river services leaving from the cities of Colonia del Sacramento, Carmelo, Nueva Palmira, and the port of Tigre (Argentina) taking visitors down to the island. If you wish to visit the island on your own, Martín García has a huge pier to moor sport watercrafts. Visitors must hold updated passport or the corresponding Uruguayan identification card.

The information in this article has been reproduced here with the permission of www.welcomeuruguay.com.

Partly a result of Argentina’s instability, and partly a result of Uruguay’s fiscal restraint, today’s recessionary climate is something of a boon for Uruguay, which according to a February issue in The Economist, “is better placed to mitigate recession than it’s neighbour” (http://www.economist.com/PrinterFriendly.cfm?story_id=13061792).

Why?

Think back to 2002, when the Argentine economy all but withered up and died. As a result, Uruguay watched its own banking system shrivel into oblivion as investors bailed out on the region altogether. Fortunately, however, tomorrow was another day.

So how did each country respond?

Well, as The Economist reads on, “While Argentina defaulted on its debt, nationalized foreign businesses and imposed price controls, Uruguay quietly reached an amicable rescheduling agreement with its creditors.” In other words, Uruguay stayed true to its financial obligations. In the eyes of bondholders, this did wonders for Uruguay’s reputation.

By 2004, after tiny Uruguay had wriggled itself out of Argentina’s chokehold, it began to grow at an eight percent clip annually through 2008.  

To a lesser degree, the same was true for Argentina. However, in October of 2008, its president, Christina Fernandez de Kirchner, nationalized the country’s private pension system. Thus, many investors opted back into Uruguay, whose banks since then have seen a tremendous upswing in non-resident banking deposits. This will only bolster Uruguay’s 2009 growth potential. Argentina, on the other hand, is likely to shrink in 2009, according to The Economist Intelligence Unit.

On top of its weakening reputation, Argentina has other stability issues to deal with—namely, its coin crisis.

While visiting Buenos Aires in February, a vendor wouldn’t sell me a bottle of coke. This, mind you, after handing the man a five peso note—more than enough to cover the cost of the coke.

The dilemma: the vendor couldn’t offer me back correct change. He didn’t have it.

I soon learned a black market was to blame. By some accounts, the coins retail in upward of seven percent their actual value. Meanwhile, the government continues to fruitlessly mint more coins. Who’s squirreling these coins away? Probably everyone. But I digress.  

Like it or not, Argentina will continue to impact Uruguay for years to come. However, their relationship does appear to be changing. That is, Uruguay seems to be enjoying a continued growth spurt. 

The question at hand: will it outgrow its big brother?

You’ll have your own set of questions depending on what’s important to you, and what your budget is. But to help you along, this week we’re comparing Uruguay and it’s neighbour Argentina, and we’ll be doing the same with Uruguay and other nearby counties in future issues.

Both countries have similar cultures that includes a love of the tango, and a weakess for mate (http://www.olauruguay.com/Issue5d.html), both enjoy a good education system with high literacy rates (around 95%), good health care, a great climate, and both countries are heavily influenced by their European heritage. But there are some areas where one country trumps the other…

Argentina
More cultural activities
Argentina—Buenos Aires in particular—offers more in the way of cultural activities, and in general a better range of things to do. B.A. is ten times the size of Montevideo so there’s a wider variety of great restaurants, shopping malls, theaters, and markets

Livelier nightlife
Again, B.A. is a big city so if a great nightlife is important to you, this might be the place for you. Clubs party on ‘til the early hours, and the variety or bars and clubs here means there’s a watering hole for every taste.

Easier to get to
You can fly to Buenos Aires from most major cities in the U.S., whereas direct flights to Montevideo are run only from Miami. However, once in B.A. you can get to Uruguay easily by ferry or a short flight.

Uruguay

More laid back
Life here is generally more slow and relaxed than in Argentina. Of course life pace varies depending on whether you are in an urban or rural area, but Uruguayan people are quieter and more laid back than the Argentineans, so on the whole, if you want an easy-going lifestyle, Uruguay should be top of your list.

Safer
While you’ll still get the odd purse snatching or burglary, a low level of petty crime is really the most you’ll have to contend with in Uruguay. In Buenos Aires violent crime is on the rise and this city’s once “safe” reputation is starting to tarnish.

Lower cost of living
It’s cheaper to live in Uruguay than Argentina.

Better quality of life
We believe that Uruguay offers a better quality of life than Argentina—a low cost of living combined with great natural foods, parks and facilities for an active life, a secular culture where all religions and spiritual beliefs are accepted, welcoming and easy-going people, and a laid-back lifestyle, all create a happy and healthy life here.

More business friendly 
Uruguay provides a more pro-business environment than Argentina. There is very little red tape and when it comes to conducting business here foreign investors are treated equally to local investors. One hundred percent foreign ownership of corporations is permitted, investors are free to transfer capital and profits, from their investment, out of Uruguay, and business transactions can be carried out in any currency.

We know that’s a lot to take in, but if have a good idea of what you want…one of these countries should seem like an obvious choise. Our advise—live in Uruguay, and visit Argentina…often.