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Assessing the opportunities: (l-r) Carlos Loaiza, Secretary General and Advisor to the Chamber of Free Shop Entrepreneurs of Uruguay; Uruguay’s Under Secretary of Foreign Relations Luis Porto and ASUTIL Secretary General José Luis Donagaray |
LATIN AMERICA. Duty free border shops’ contribution to state revenues and job generation was a key theme at the first Annual Border Meeting on Wednesday in Rivera, Uruguay.
Co-organised by South American Duty Free Association ASUTIL and the Chamber of Free Shop Entrepreneurs of Uruguay, the event attracted industry representatives from Uruguay, Argentina and Brazil, as well as leading government authorities and investors.
Uruguay’s Under Secretary of Foreign Relations Luis Porto said that economic activity in the border regions is essential for building bilateral relations between the neighbouring countries. Given the importance of Uruguay’s relations with Argentina and Brazil, the government official remarked that “the borders are the gateway to the future”.
Speakers stressed the importance of duty free shops for the Uruguayan economy in general and the Uruguay-Brazil border region in particular.
Carlos Loaiza, Secretary General and Advisor to the Chamber of Free Shop Entrepreneurs of Uruguay, noted that the duty free stores on the Uruguay-Brazil border account for 13% of Customs revenues, and as much as 7% of those of the Tax Office (DGI) in some provinces along the border. He said the sector has a positive impact not only on tax raising but on employment, generating more than 5,000 direct jobs plus indirect jobs in associated services in the area.
ASUTIL Secretary General José Luis Donagaray highlighted the importance of industry investments in the north and northeast border regions of Uruguay. These include recent developments from Siñeriz Duty Free and the Melancia shopping mall in Rivera, as well as new Neutral and La Riviera shops, plus the upcoming construction of a mall and a hotel in Rio Branco announced by Duty Free Americas.
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The event attracted strong interest from the industry and the investment community |
Meanwhile, the analysts who participated said that all three of the countries in this border region were heading for big economic changes.
Santander Brazil Senior Economist Tatiana Pinheiro said that national elections in Brazil would prompt changes over the next 18 months.
“The government will not let spending and credit decline during election time, but these figures will be adjusted later on. Regardless of the election results, the economic situation in Brazil is bound to change”, she anticipated. She forecast a -7% depreciation of the Real against the US Dollar for next year.
CPA Ferrere Partner Gabriel Oddone indicated change was coming in Uruguay. “The cheap Dollar, low interest rates and capital inflow have come to an end. The good news is that the nation is prepared to face the new scenario and avoid dramatic situations,” he stated.
Finally, Argentine economist Carlos Melconian remarked that his country “will definitely have to take economic measures between 2014 and 2015”, and noted that the recent legislative elections “marked the end of a cycle”.
