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interesting article about our country

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carlitos
  5/29/2015 07:41 EST

http://www.globalpost.com/dispatch/news/regions/americas/140107/uruguay-downfall

Allwewantispeace
  5/30/2015 21:57 EST

Hi Carlitos,

Interesting article. Thanks for the link. I've been trying really hard to understand Uruguay and why it is the way it is. I hesitate to post this message because i don't live there and my opinions are based on the things I learned over the Internet. Please read this as a conversation starter. Please don't think I'm trying to tell you about your country.

Uruguay: 8 reasons not to move there:
1 weather. It's chilly and rainy, then hot. I say "Big deal". No hurricanes, tornados, volcanos, earth quakes, three foot blizzards, or floods, wild fires... Count your weather as a blessing. Just my opinion after three terrible winters in a row in the northeast of the u.s.

2 trash. Pick some trash up. Ghandi says you need to be the change you wish to see. My son and I pick up trash along our road as a game.

3 pot laws. Do lots of people smoke pot? Why were 60% of the people opposed to the new law? Is 40 grams of pot a month not enough? Anyone smoking pot before the law change was breaking the law already. How does making some pot legal make Uruguay a bad place? I don't get the problem on this one. How is legalizing pot going to help anything except more income for the government?

4 food. Not spicy enough. Spice can be added and not removed. Bring your spices with you. I see this problem as an opportunity. Any restaurant with good spicy food should catch on. Are we prohibited from purchasing spices online? Grow some peppers.

5 prices: this problem is very interesting. Why are prices high? Limited supply, or high demand? The import taxes are holding the country back and contributing to these high prices. This explains why cars are so expensive, but there must be more to this...

How can wages be low and everything else be so expensive? Letting foreigners who have no intention of moving to Uruguay buy real estate seems like it could be a factor. These investors are parking their cash and creating a giant real estate bubble. The inflow of money is nice, but it's not a good long term policy when people cannot afford housing.

Other countries have natural resources to export which creates industry. Uruguay's primary exports are agricultural products which really translates to low wages. If the Uruguayans enjoyed higher wages, then their exports would diminish... Unless their agricultural products were noticeably superior, like their grass fed beef. That may be the solution... Uruguay needs an international marketing campaign to promote the exceptionally high quality of their exports.

6 bureaucracy. This must be an employment scheme. They are trying to create jobs, but this is a terrible way to do it.

7 slow internet. This is a serious problem. Uruguay should make this a top priority. The computer laptop project is commendable.

8 education. People must feel that if there are no challenging jobs, then why care about Education? Challenging jobs will not arrive in mass until there is a talented workforce, so it's the chicken and the egg scenario. If we focus on the children in school right now, this problem might solve itself within 25-40 years, but If the kids are all brilliant then they will move away for high paying jobs and that would also be terrible.

Problems 2,4,5,6,7 & 8 all revolve around a lack of industry which is rooted in socialist employment policies. The relationship between worker and employer must be perfectly balanced. 50% in favor of the workers rights, safety, good pay and 50% in favor of the employer being able to hire and fire and to make a real profit without being punished.

In the u.s. Our employment system is called "at will". The employer chooses to employ someone at the will of the employer. That means they employ the worker as long or as short as they want. The worker has the same rights. He or she works somewhere "at will". When they don't want to work somewhere anymore, they can leave.

In this at will situation, the pay rate is the key. If you don't pay enough, the workers leave at their will. It sounds really simple and it is. Neither party is allowed to manipulate the other. Free markets work themselves out. As soon as a government gets involved with lots of regulations, the entire system suffers - even the people the regulation was intended to help.

Remove the employee/employer regulations and 75% of uruguay's problems start to diminish.

Again, I'm just guessing with my comments. I don't claim to know anything, but understanding these things is really important to me. Maybe someone has some insight into these issues? I'm here to learn.

Thanks,
W.

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EdNewYorkCity
  5/31/2015 00:43 EST

Allwewantispeace this is my contribution with personal views.

1 I love Uruguay’s weather, never too hot, never too cold. When it rains, it rains hard but not for very long. Some people complain of humidity, not me, maybe because there’s always a breeze that keeps the air moving.

2 I don’t think trash is a problem but Montevideo could definitely be much cleaner. Dog poop and recycling people cause most of the problem

4 Uruguayans hate spicy food, It’s in their DNA. Spices are available though but don’t expect spicy food in restaurants unless you specifically order it that way. New Restaurants keep trying and failing over and over, I guess is a culture thing.

5 Prices: so many ideas cross my mind and none of them seem to justify the high prices. I’d venture that foods (produced in the country) are not expensive but imported stuff is very expensive (cars, electro domestics, gasoline, etc).
I don’t think there will be any real estate bubble like in the US, Europe or other places. The reason is very simple, the market uses cash primarily, very little is owed money. The locals build their own houses little by little with the help of friends and neighbors.
Foreigners owning land I don’t think is a problem so far but the influx of people moving to Uruguay lately definitely contributes to the rise of prices (more demand equals higher prices)

7 According to this article Uruguay has the fastest internet in Latin America.
http://farms.uy/2013/09/uruguay-fastest-internet-service-latin-america/

8 Education is another hard to figure out problem. My theory based on my own experience is that somehow the system is too hard and expensive. People get discouraged thinking I’ll never make it thru college so why waste time, I better get a job. I came to the US and went thru college like a genius when in Uruguay I was a sub par student. When I studied in Uruguay, multiple choice tests didn’t exist, was either you know the answer or you don’t.

carlitos
  5/31/2015 07:22 EST

today on the paper: http://www.elpais.com.uy/que-pasa/algo-mas-que-nubes-cielo.html

carlitos
  5/31/2015 08:32 EST

Thanks W and Edy from your thoughts. I run into this article and it does not reflect my thinking at all. I just wanted to share as you did what I think about the items related:

1. The weather.

I love it, specially in the South. I don't recall having lived in a nicest place. I lived some time in South Florida and in the North of Brazil and I really wanted to see 4 seasons and have some cool whether.
2. The trash
Most Uruguayans think if the garbage is not in their cars, home or pocket it is fine as long as someone is cleaning after them. If the Gov does not collect the garbage and hide it they start complaining but they would not collect garbage that are not theirs. They throw anything from their windows. It's cultural and it explains why beaches and rivers are full of garbage.
3. A marijuana law with a big flaw
It is an advance from the previous and surrounding (other countries) reality. It is not perfect but it is something. More needs to be done.
4. I don't eat out so, I don't care what they eat I cook my own food and I plant my own peppers.
5. The prices
Prices are high mostly because people are willing to pay higher prices and they don't complain about it (not the right way). I recently read a comparison between same industrialized products between Argentina, Brazil and Uruguay, and most of the prices here were way higher. Many people think this is due to the lack of scale economy and while is might be true I still think that if something is produced in Argentina and is sold in there for 1 US it cannot cost 2 US on this side of the river unless we all agree to pay that price and we did.
Real state here were always expensive, first because of the Argies but recently Uruguayans were able to save a lot more than previous years and they dump that extra money in real estate. The effect expat is also definitely influenciating on the prices too.
6. The bureaucracy
Uruguayans like to debate a lot before doing something. Sometimes they just talk and think and don't act.
7. The regressive technology
My internet is not as fast as the one I had in the US or in the UK but I don't complain, it is not too bad and I depend on it. May be it should be better in some rural areas or less populated areas but in cities I think is beareable.
8. The schools

I also went to college in the US and have all As all the time and I also had a very hard time in high school and college here. Looks like to me they try to teach their kids here in school, and University to be a bureaucrat, to stick in the very same job they get when they are young no matter what and to look for retirement.

Morell
  5/31/2015 08:47 EST

Just a few comments that came to mind.

Many expats seem to have the view that if only such and such were available here, everyone would want it.
Uruguayans would produce it themselves if they wanted it. Expats coming here thinking they can change things will be constantly frustrated.

Emplyment and labour laws here are very complex, half the country seems to work for the government in one way or another and the jobs are highly prized. Unions are extremely strong, there seem to be strikes almost every week over some little thing and practically all wages are regulated, from agricultural workers, to house cleaners to teachers.

I asked a Uruguayan neighbour about an article posted in the paper about nurses who were on strike. An RN makes around $800 US a month. I said how can he/she live on this? He replied - they can't, they all take another job and work 60 - 80 hours a week in order to get by.
He is a high school physics teacher and his wife teaches English in the school system but they also do extra coaching often late into the night and on weekends. To him it is perfectly normal to only get Sunday free.

People here are not into the type of consumption you see in the US. Homes are small, they buy much less and they keep things longer. You will find many businesses that repair, recover, repaint, etc. Nothing is wasted that can be used. The garbage here really is garbage and unfortunately in some places is terrible.

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focus
  5/31/2015 10:45 EST

Hi Morell,

Right on, man! (woman?) - human! If foreigners try to import their view of the way life should be they will live a miserable existence here.

I experience this attitude often in real estate. Americans cannot get over the fact that houses so small cost so much. I don't have an answer for them. But I explain that people here do not want large houses, and many foreigners cannot accept that. For example, I point out that my neighbor with two teen-age daughters lives in about 800 sq ft. In telling this to Americans, they smile as if to pity the poor people in their stupidity. Yeah, well they just bought another house in Las Piedras so if they wanted a bigger house they could damn well afford one, but they don't! That's life here. Accept it or be miserable and one day return home to where things are more predictable for you.

Life here is what you make it.

crazyfarmer
  5/31/2015 12:02 EST

>Many expats seem to have the view that if only such and
>such were available here, everyone would want it.
>Uruguayans would produce it themselves if they wanted it.
>Expats coming here thinking they can change things will be
>constantly frustrated.

I think there are definitely some americans coming here with this attitude. But when I hear a lot of new arrivals saying this, I think they're just looking for a business opportunity. But I think you're right. If they don't have something here, it's usually not because they don't know about it, but because they don't want it, especially with food. They like what they grew up with, which unfortunately for us, is really limited from our perspective. I grew up eating at mexican, japanese, chinese, and indian restaurants. So maybe I'm the one with brain damage.

>I asked a Uruguayan neighbour about an article posted in the
>paper about nurses who were on strike. An RN makes around
>$800 US a month. I said how can he/she live on this? He replied
>- they can't, they all take another job and work 60 - 80 hours a
>week in order to get by.

It's starting to go this way in the US also. It's no way to live.

>People here are not into the type of consumption you see in
>the US.

I think they would if they could. Everyone likes nice things. Cars for example are nicer in the US for the same money. If the import duty on cars suddenly disappeared, I don't think they'd keep driving the same car and save their money. Some might like their old car. But I think most would trade up and keep paying the same. People in the US would do this also.

>Homes are small,

They were small in the US in the 50s and 60s also. I think as financing becomes commonplace, the houses will get larger.

>they buy much less and they keep things longer. You will find
>many businesses that repair, recover, repaint, etc. Nothing is
>wasted that can be used.

I think they have this attitude out of necessity. If the cost of living vs salaries didn't suck so bad, and if it weren't so expensive to import things, they'd opt for nicer newer things.

>The garbage here really is garbage
>and unfortunately in some places is terrible.

I think that picture in the article was from a garbage strike. This happens in US cities also. I've complained about that article on other forums before. Oh look! A storm cloud! Look how bad the weather always is everywhere in Uruguay!

Outside the city, they often dump garbage at the edge of town in the drainage ditches on the side of the road, then set it on fire every friday night, burning plastic and all. Fun stuff.

Allwewantispeace
  5/31/2015 20:41 EST

Recap:
Weather: not an issue

Trash: not an issue

Pot: not an issue

Spicy Food: not an issue

Prices: still not clear on this subject. Why are prices so high, or wages so low? Crazy farmer says to never hire anyone, but meanwhile lots of Uruguayans are working two jobs? What is the unemployment rate in Montevideo? What is the unemployment rate in rural areas? Is unemployment an issue? Let's get to the bottom of this.

Slow internet: apparently not a major issue

Bureaucracy: not a big deal

Education: both Ed from nyc and Carlitos indicated that college in the u.s. Was not too difficult for them possibly because the Uruguayan public education system did better then expected preparing them? So are the rankings wrong? Maybe the tests are flawed? What's up with this?

Thank you for unraveling the mysteries of Uruguay.

W.

crazyfarmer
  5/31/2015 22:57 EST

>Prices: still not clear on this subject. Why are prices so high,

import duties

>or wages so low?

Government controls, the people are used to it, the high cost of operating a business leaves less to pay the people, probably a lot of other reasons.

>Crazy farmer says to never hire anyone, but meanwhile lots of
>Uruguayans are working two jobs? What is the unemployment
>rate in Montevideo? What is the unemployment rate in rural
>areas? Is unemployment an issue? Let's get to the bottom of this.

There's a big difference between large established uruguayan company dealing with BPS and "rich" american dealing with them.

>Education: both Ed from nyc and Carlitos indicated that college
>in the u.s. Was not too difficult for them possibly because the
>Uruguayan public education system did better then expected
>preparing them?

The quality of education here, both public and private, varies widely. It's possible to get an excellent education here, and possible to graduate barely literate.

>So are the rankings wrong? Maybe the tests are flawed? What's
>up with this?

I wouldn't believe any official numbers, from the Uruguayan government, the US State department, or from globalist associated NGOs.

brian

Morell
  6/1/2015 06:57 EST

An article today on unemployment which is 7% here. There is a lot of age discrimination and those over 45 years have much higher unemployment.

http://www.elpais.com.uy/economia-y-mercado/desempleo-continua-aumentando.html

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carlitos
  6/1/2015 10:52 EST

Loco, are you sure goods produced in Brazil and Argentina pay import duties? I don't think they do, but I am not sure, and still they can cost as much as 2 times more sometimes, sometimes they cost the same and I have seen even when they cost less.

Also, I don't think anyone can graduate here illiterate.

crazyfarmer
  6/1/2015 11:36 EST

>Loco, are you sure goods produced in Brazil and Argentina
>pay import duties? I don't think they do, but I am not sure, and
>still they can cost as much as 2 times more sometimes,
>sometimes they cost the same and I have seen even when
>they cost less.

I'm not completely sure how it works either. I've always heard that the import duty is 60%. But I think that's a maximum. I think the real amount varies depending on what the item is and where it's coming from. Items from China or Brazil seem to have a lower import duty that something from the US. I think farm equipment for example is exempt from the import duty also.

Also, shipping charges factor in. It's probably cheaper to drive something down from Brazil than ship it from China or the US.

And I wouldn't be surprised if certain importers get preferential treatment and have a special deal with customs to get a lower import duty.

And lastly, prices seem to vary widely just in Montevideo. One store might charge a lot more markup (10% vs 100% for example) based on who knows what criteria.

>Also, I don't think anyone can graduate here illiterate.

I've seen quite a few people who can't seem to read properly. But that's outside the city. And I think they didn't finish liceo.

When my daughters went to the liceo in Las Piedras, seemed like a reasonably nice school, they were shocked by what some of the other students didn't know. Also, the primary school down the street from us seems like little more than a daycare center. But the middle school where my son went about 5km away was great. The school and principal are apparently well known, with several families driving their kids to that school every day to get them a better education.

ismael
  6/3/2015 09:47 EST

> They were small in the US in the 50s and 60s also. I think as financing becomes commonplace, the houses will get larger.

Except that financing is and always has been commonplace... yet few can afford a house. It is the low wages I guess...

ismael
  6/3/2015 10:02 EST

> Government controls, the people are used to it, the high cost of operating a business leaves less to pay the people, probably a lot of other reasons.

Maybe, but that doesn't explain why profitable business don't pay well either.

> There's a big difference between large established uruguayan company dealing with BPS and "rich" american dealing with them.

No, actually the difference applies to any company vs a person, and it's a great length of difference on every aspect, but there's a perhaps not so obvious fact: reputation matters, and when it comes to workers, companies are well connected and the "job market" is small and not a free market at all, so you mess up with anyone and suddenly all doors close to you, permanent unemployment guaranteed.

Also, there's a saying that goes like "Hecha la ley, hecha la trampa", roughly translates to "every law has a loophole", I guess. So companies learn to live with whatever laws politicians come up with and workaround the issues... life goes on, and obviously laws never have the intended results...

crazyfarmer
  6/3/2015 13:15 EST

>> They were small in the US in the 50s and 60s also. I think as
>>financing becomes commonplace, the houses will get larger.

>Except that financing is and always has been commonplace...
>yet few can afford a house. It is the low wages I guess...

Not like in the US. Not even close. We had NINJA loans in the US. No Income No Job. People with no income put almost no money into the loans. They were even writing 125% loans for houses.... the bank gives you money to "buy" a house.

We also had loans with promotional rates. The interest rate was 1% for the first three years, then jumped up to 8% afterwards. But the bank qualified them against the lower interest rate, so the payment was artificially much lower. But people had no idea what they were signing. Or they were told they could refinance before the 3 years was out. Only when the time came, they couldn't. So their payments double or tripled, and of course they couldn't pay them.

But because money was so free and easy, housing prices went through the roof. (the same reason education and health care is so expensive in the US now) Government agencies and "experts" claimed this was normal and prices would never crash, so you better get into a house before you're "priced out" forever. Many people made huge amounts of money buying and selling houses on speculation. But far more were financially destroyed. We were renting a house from a guy who never graduated high school. We were renting because we knew a housing crash was coming. He was left holding 17 houses that he couldn't make the payment for. He lost all of them including his $800,000 house.

The same circus could easily happen here. And the way the government and BROU is pushing credit, it makes me think that's the plan. Many people own their properties outright here. And the bankers don't like this. How can they "steal" these properties from people who own them without debt? Well, you get them to do what our neighbor is doing. He's going to finance new house construction priced in "units" instead of pesos or even dollars. So the bank can reprice their loan whenever they want. Of course, their property is the collateral for the loan. What could go wrong? He's totally not worried about this because the government loves him and would never allow them bank to take his property.

crazyfarmer
  6/3/2015 13:21 EST

>> Government controls, the people are used to it, the high
>>cost of operating a business leaves less to pay the people,
>>probably a lot of other reasons.

>Maybe, but that doesn't explain why profitable business don't
>pay well either.

Because they don't have to, which translates into higher profits. If you're a large company, and you can get expensive taxes and regulations passed, but exempt your business, it shuts out all your current and potential new competitors. It's a classic crony capitalism move. It's how the US works.

>> There's a big difference between large established
>>uruguayan company dealing with BPS and "rich" american
>>dealing with them.

>No, actually the difference applies to any company vs a person,
>and it's a great length of difference on every aspect, but there's
> a perhaps not so obvious fact: reputation matters, and when it
>comes to workers, companies are well connected and the "job
>market" is small and not a free market at all, so you mess up
>with anyone and suddenly all doors close to you, permanent
>unemployment guaranteed.

Ah, maybe that's it. They know the american isn't connected and can't ruin their reputation with other employers. That makes a lot of sense.

>Also, there's a saying that goes like "Hecha la ley, hecha la
>trampa", roughly translates to "every law has a loophole",
>I guess. So companies learn to live with whatever laws
>politicians come up with and workaround the issues... life
>goes on, and obviously laws never have the intended results...

That's certainly true. I guess I would be more cynical and say that large corporations work with (bribe) politicians to put the loopholes in for them, but make it difficult for anyone else to use the loophole. I don't think any loophole happens by accident.

Morell
  6/3/2015 13:40 EST

I don't think everything should be painted with a US brush.

Just because that is how things went in the US doesn't mean they went like that everywhere else or will go like that here.

ismael
  6/4/2015 11:12 EST

>Not like in the US. Not even close. We had NINJA loans in the US. No Income No Job. People with no income put almost no money into the loans. They were even writing 125% loans for houses.... the bank gives you money to "buy" a house. <...>

Unlikely to happen here anytime soon, since evictions are much harder, and more importantly, there's some legislation against that kind of contract, framing these deals as usury and making them illegal.

ismael
  6/4/2015 11:25 EST

>The same circus could easily happen here. And the way the government and BROU is pushing credit, it makes me think that's the plan. Many people own their properties outright here. And the bankers don't like this. How can they "steal" these properties from people who own them without debt? Well, you get them to do what our neighbor is doing. He's going to finance new house construction priced in "units" instead of pesos or even dollars. So the bank can reprice their loan whenever they want. Of course, their property is the collateral for the loan. What could go wrong? He's totally not worried about this because the government loves him and would never allow them bank to take his property

Except the "indexed unit" value can't be set by the bank, and only very indirectly by economical policies, since it depends on the CPI (not in vain the name...). The other existing "unit" is the "readjustable unit", that is adjusted against salaries, same thing there.

carlitos
  6/4/2015 11:30 EST

Is my opinion that thinking that things wont happen here because this or that law or custom is a very fragile protection.

ismael
  6/4/2015 11:34 EST

> I don't think any loophole happens by accident.

Indeed.

crazyfarmer
  6/4/2015 12:28 EST

>Unlikely to happen here anytime soon, since evictions are much
>harder, and more importantly, there's some legislation against
>that kind of contract, framing these deals as usury and making
>them illegal.

It was illegal in the US too.

crazyfarmer
  6/4/2015 12:40 EST

>Is my opinion that thinking that things wont happen here because
> this or that law or custom is a very fragile protection.

Agreed.

To morel's point, I don't think it will happen here just because it happened in the US. But the bankers who implement these frauds tend to do it in multiple countries because it's hard for people in country A to learn from the bad experiences of country B, especially if the languages are different.

Money is a powerful motivator for politicians anywhere in the world. And since bankers can print money whenever they way, they tend to get what they want. Not always, but most of the time.

So I'm not saying that they'll implement exactly the same mortgages here with flimsy qualification processes. The environment IS different, with different laws, different history, different culture, different level of education and financial sophistication in the general population, a different level of willingness to speak up or protest, etc. But one thing is for certain, the bankers are more than capable of formulating an attack custom made for Uruguay. And you better believe that it would work like a charm. Because they've done it many times before. And they know what weaknesses to look for, how to exploit them, and just where to add money and propaganda.

There is definitely a push on to get the Uruguayan people in debt. And all of us would be smart to take a step back and try to understand how this fact fits into a possible bigger agenda. I can assure you that the push for more credit has nothing to do with the loving kindness of the government and their affection for the people.

I'd look for a raging boom fueled by an easy credit bubble that lasts 4 to 7 years, followed by a fast and unexpected equally large crash. And when the dust settles, the Uruguayan people will be poorer, with a harder standard of living, with fewer property owners, more people living in high rise projects in Montevideo, more people on government assistance, and more wealth and hard assets concentrated into the hands of bankers and the corporations they own.

ismael
  6/4/2015 15:21 EST

>Is my opinion that thinking that things wont happen here because this or that law or custom is a very fragile protection.

Oh, but it will eventually happen, indeed, just not yet, it will take several years until we get to that point. But yeah, things are definitely, albeit slowly, changing towards that direction.

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If you've recently arrived in Uruguay, here are 10 tips for digital nomads living in Uruguay.

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Mobility LC

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Mobility LCMobility LC

We've partnered with Mobility LC to help you with your relocation.
Learn More

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Help others in Uruguay by answering questions about the challenges and adventures of living in Uruguay.

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