Friday, June 30, 2006


Old Cars

Before my first trip to Uruguay, I'd heard stories about the antique cars used as daily drivers. My wife had visited earlier and remembered cool cars from the 1920's, 1930's, 1940's and 1950's everywhere. In 1998, when I visited, there were still some on the streets but not many.

Some writers try to explain this using Uruguay's economic trajectory-- a rich country that became poor and could no longer afford to import new cars. As an economist, I know it would be cheaper to import a newer used car than to continuously retrofit cars for 70 years.

Trade policy is a more believable explanation. Make it illegal to import any cars in a country that doesn't produce automobiles and you have the incentive for a national auto-restoration industry and a living auto museum.

Relaxing that policy allowed new cars into the country. Owners of the classic cars could then sell them to overseas collectors and purchase a modern reliable auto. Eventually the government put restrictions on exporting the antiques.

Classic cars, once common throughout Uruguay, dot the cobblestone streets of Colonia del Sacramento's old Portuguese quarter San Francisco Chronicle Oct 2005

Sleepy Uruguay races to rescue its vintage cars
Motoring Feb 2005

Uruguay's Treasure Trove on Wheels
Los Angeles Times May 1998

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Wednesday, June 28, 2006


Background on Uruguay

From Wikipedia

Uruguay, officially the Eastern Republic of Uruguay or the Republic East of the Uruguay (River) (Spanish: República Oriental del Uruguay; pron. IPA [re'puβlika oɾien'tal del uɾu'ɣwaj]), is a country located in southern South America. It is bordered by Brazil to the north, the Uruguay River to the west, the estuary of the Río de la Plata (literally "River of Silver", but commonly known in English as "River Plate") to the southwest, with Argentina on the other bank of both, and finally the South Atlantic Ocean to the southeast. About half of its people live in the capital and largest city, Montevideo. The nation is the second smallest independent country in South America, larger than only Suriname (it is also larger than French Guiana, which is not independent), and is one of the most politically and economically stable.

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Monday, June 26, 2006


Uruguay's Economy

From the CIA World Factbook
Economy - overview:

Uruguay's well-to-do economy is characterized by an export-oriented agricultural sector, a well-educated work force, and high levels of social spending. After averaging growth of 5% annually during 1996-98, in 1999-2002 the economy suffered a major downturn, stemming largely from the spillover effects of the economic problems of its large neighbors, Argentina and Brazil. For instance, in 2001-02 Argentina made massive withdrawals of dollars deposited in Uruguayan banks, which led to a plunge in the Uruguayan peso and a massive rise in unemployment. Total GDP in these four years dropped by nearly 20%, with 2002 the worst year due to the banking crisis. The unemployment rate rose to nearly 20% in 2002, inflation surged, and the burden of external debt doubled. Cooperation with the IMF helped stem the damage. A debt swap with private-sector creditors in 2003 extended the maturity dates on nearly half of Uruguay's then $11.3 billion of public debt and helped restore public confidence. The economy grew about 10% in 2004 as a result of high commodity prices for Uruguayan exports, a competitive peso, growth in the region, and low international interest rates, but slowed to 6.1% in 2005.
GDP (purchasing power parity):

$32.96 billion (2005 est.)
GDP (official exchange rate):

$13.24 billion (2005 est.)
GDP - per capita (PPP):

$9,600 (2005 est.)

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Friday, June 23, 2006


Still In Kalamazoo...

My classes are finished and my grades are done, but our travel arrangements to South America haven't been finalized. We'll leave for Uruguay sometime in August. I'll be posting comments and observations about my trip here, so bookmark this site if you're interested.

We'll be based in Montevideo for the academic year 2006-7. I expect to do some travel in neighboring countries as well. We'll be back in Michigan for the start of school, Fall 2007.



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