VZCZCXYZ0001
RR RUEHWEB

DE RUEHMN #0108/01 0432036
ZNR UUUUU ZZH
R 122035Z FEB 10
FM AMEMBASSY MONTEVIDEO
TO RUEHC/SECSTATE WASHDC 0226
INFO MERCOSUR COLLECTIVE
RUEAIIA/CIA WASHINGTON DC

UNCLAS MONTEVIDEO 000108 
 
SENSITIVE 
SIPDIS 
FOR WHA/BSC MARY DASCHBACH 
 
E.O. 12958: N/A 
TAGS: EINV PREL PGOV UY
SUBJECT: Uruguay: President-Elect Mujica Courts Business Community 
 
REF: MONTEVIDEO 23 AND PREVIOUS 
 
Summary 
 
------------ 
 
 
 
¶1. (U) On February 10, President-elect Jose Mujica made a dynamic 
and much-applauded presentation on why to invest in Uruguay to a 
large crowd of businesspersons.  Speaking to an international crowd 
in the resort city of Punta del Este, Mujica emphasized that his 
administration would work hard to ensure the continuation of 
Uruguay's open and positive investment climate.  He included a form 
on each table via which potential investors could make arrangements 
to contact appropriate officials in his government, a mechanism 
that reportedly has encouraged over 150 companies to respond 
positively.  End Summary. 
 
 
 
A Promise to Protect Business Interests 
 
--------------------------------------------- ------ 
 
 
 
¶2. (U) President-elect Jose Mujica sent a strong signal to the 
foreign business sector February 10 by issuing a rallying call for 
increased investment and production.  Addressing over 1,500 
international businesspeople during a charity lunch at a resort 
hotel, Mujica, flanked by vice president elect Danilo Astori, and 
with his entire cabinet on stage, emphasized that Uruguay is keen 
to support new investment, and he welcomed investors to come and 
live in Uruguay. 
 
Q 
 
¶3. (U) Mujica's message of fiscal prudence and openness to foreign 
investment drew an enthusiastic response, tamping concerns among 
many in the audience that Mujica may prove vulnerable to the 
ideological currents of the more radical elements of his leftist 
Frente Amplio coalition.  Mujica was typically direct, reassuring 
the attendees that he wanted the country to prosper from what he 
anticipates will be gains in employment and state revenue resulting 
from greater investment, stating "Investment is necessary for 
entrepreneurs to create jobs."  Specifically promising no 
expropriations, he said, "we're not going to take you over or 
double your taxes." He also said that, far from "killing the goose 
that lays the golden eggs," his administration would do everything 
it could to minimize risks while maximizing stability.  In 
explaining his vision of the relationship between state and the 
private sector, Mujica cited his own proposal to revive the 
country's railroads, remarking that "the government has to build 
the rails, but then the private sector takes over." 
 
 
 
¶4. (U) Astori preceded Mujica's presentation by reiterating the 
investment-friendly aim of making Uruguay "more open to the world." 
He also responded to the event's declared theme "Business in the 
National Project of Development and Poverty Reduction" by promising 
that increased investment would support the "network of social 
protection . . . that will create permanent new opportunities for 
those that most need them." In keeping with this aim, the USD 100 
cover charge for the lunch raised USD 102,000 for the local 
hospital. 
 
 
 
Relations with Argentina Already Improving? 
 
--------------------------------------------- ------------- 
 
 
 
¶5. (U) The lunch was arranged by the Uruguay-Argentina Chamber of 
Commerce, but the audience was packed with businessmen and women 
from BraQl, Chile, Paraguay and  Venezuela,  as well as the U.S., 
Israel, Germany  Belgium, Italy, Spain and China, among other 
countries.  Mujica, however, was careful to pay particular 
attention to the 400 Argentines in attendance, and highlighted the 
need to maintain strong links between the two neighbors.  He struck 
an upbeat note regarding the ongoing Botnia pulp mill dispute, 
remarking that "we are willing to solve the situation" and that, 
furthermore, "it will be solved soon."  Mujica also made sure to 
 
reference what many perceive as his special relationship to 
Argentina, declaring that "I never feel I am a foreigner when I 
visit Entre R????os or Buenos Aires."  Also in the audience were high 
ranking officials from the Blanco and Colorado parties, a 
delegation from the Uruguayan PIT-CNT umbrella union, and members 
of the diplomatic corps. 
 
 
 
¶6. (U) The event was not only enthusiastically applauded and widely 
reported, but has also proved potentially productive.  In less than 
24 hours, the future administration has received ovQ 150 requests 
for meetings on possible investment projects.  Among the projects 
under consideration is a proposal by Argentinean businessman 
Daniel Mazzucchelli to construct a USD 20 million high-end hotel on 
Uruguay's popular Maldonado coast, while another Argentine company 
(backed by Spanish investors) has expressed interest in a USD 
100-200 million renewable energy project.  The latter indicated 
that they hope to be talking with the future administration at the 
end of the month. 
 
 
 
Comment 
 
------------- 
 
 
 
¶7. (SBU) Mujica hit a home run, in reassuring the business 
community and reaffirming the message that Uruguay welcomes 
investors.  The strategy of engaging the Argentine private sector 
is a wise one, as it underscores for both countries the importance 
of working out the Botina dispute once and for all.  On the 
cautionary side, while Mujica seemed sincere in his pro-investor 
concepts, implementation may require compromise with less business 
friendly coalition partners-- where that "balancing" with the left 
will show up remains to be seen.  End comment. 
Nelson