Uruguay's plan to attract foreigners and repopulate the "little country" of 3 million inhabitants

One of the first plans announced by President-elect Luis Lacalle Pou, who takes office on March 1, is to try to increase the size of the Uruguay population, and part of his plan includes facilitating the entry of foreign residents.

Despite recent problems of insecurity, Uruguay is still considered one of the best places to live in Latin America. Photo: Pxfuel
Despite recent problems of insecurity, Uruguay is still considered one of the best places to live in Latin America. Photo: Pxfuel

The center-right politician announced a few days ago that he will launch a package of measures to relax the current residence rules, both bureaucratic and fiscal, in order to attract foreigners to the country.

"Uruguay has always been a country with open arms for countries that are expelling their people, Venezuelans, Cubans, and others," the president-elect said previously.

And he added: "But it is also a place for people who are not having a bad time to say that here it is a place where investment is respected, where it is good to bring your family to live and where there is legal certainty.

For his part, the president of Argentina, the Peronist Alberto Fernández, also spoke of the efforts of the Frente Amplio governments to stop Uruguay from "being a tax haven" and from "being favored with money obtained spuriously elsewhere.

On the plan to attract Argentines in particular, former President José Mujica said: "Instead of bringing 100,000 Argentine cagadores (fraudsters), let's worry about having our own invest here.

"We have about US$24 billion scattered around the world, why don't we try to get some of that money to come into the country," he added.

Other critics said that Lacalle Pou intends to attract "mainly the rich" in order to stimulate the Uruguayan economy.

President Tabaré Vázquez said it was "not easy" to implement his successor's initiative, but said "it would be much better to have six million people" as an economic engine.

What kind of foreigners are they looking for?

In an interview with BBC Brazil, future tourism minister Germán Cardoso said Uruguay is inspired by European Union (EU) countries, especially Portugal, to increase its population and "activate" its economy without "damaging" the country's fiscal integrity.

"We do not want illicit capital, but families and investors who show their resources, who want to live and prosper in our country," Cardoso said by telephone.

According to him, Uruguay can be defined as "an island of prosperity and tranquility" because it offers "quality schools and universities," as well as "higher public security rates than the countries in the region," and good quality of life.

Currently, Uruguay asks a foreigner who wants to obtain residency to invest approximately US$1.8 million in an Uruguayan property or business, and stay in the country for at least six consecutive months.

For Cardoso, such requirements "make it difficult" to attract residents from other countries.

The minister says there is a set of bills that will be sent to Parliament with a priority request to expedite their processing.

A foreign resident, he explains, must still prove that he wants to invest and settle in the country, but without the obligation to spend six months without traveling abroad and with a lower amount of investment.

"We believe we can reduce this level to the levels of Portugal, for example, which is around US$500,000," Cardoso says.

Other ties will also be considered for granting residencies, such as if a family enrolls its children in Uruguayan schools or universities.

"The current rules make it difficult for us to attract more residents. What we want is for it to be more flexible, without harming international principles and with clear rules," the minister said.

"Here in Uruguay, we have the characteristic of respecting the rules, even with changes in the government's ideological line. What we want to do is facilitate the arrival of more inhabitants," he said.

"More cows than people"

Uruguay's intention to expand its population is not new, as noted by historians and analysts interviewed by BBC Brazil.

In the country, called a "paisito" by its inhabitants, there are even "more cows than people", as the proportion is more than three cattle per inhabitant.

As the organizer of the Uruguayan population study programme, Uruguayan historian Adela Pellegrino, a retired professor at the University of the Republic, highlighted some of the factors that would explain the country's low population density.

"Uruguay followed a path similar to the European one, which we call demographic transition. When mortality starts to decrease, fertility eventually decreases and the population becomes stable (and older)," she explained.

"In addition, the level of education contributes. In the case of Uruguay, we understand that the training of women, both in terms of education and citizenship, ended up contributing to lower fertility", she continues.

According to the expert, it is "intriguing" that Uruguay has attracted immigrants in a trajectory similar to that of Argentina in the 19th century, but did not have a population increase like the rest of Latin America, a region that had one of the highest population growth rates in the world.

This is not the first time that an Uruguayan government has tried to attract migrants, she recalls: "Our small population and its effects are a reality. And every government that arrives has a project. But many have not been efficient. We'll see what happens now," says Pellegrino.

Uruguay, in fact, has a 2008 law that, also to attract people from abroad, facilitated residency procedures, says Luciana Méndez, an economist and researcher at the University of the Republic.

"Uruguay is a country that is very open to immigrants and the residency procedure is simple and agile, and it is necessary to prove basic things, such as not having a criminal record," says Méndez.

"The 2008 law establishes, for example, that residents who arrive from abroad have the same rights as Uruguayans to access health and public education and to work, since with the provisional identity card you can now enter the labor market," she explains.

However, she believed that the new government's migration policy should also take into account that approximately 13 per cent of the Uruguayan population lived abroad.

"There are many qualified people, with doctorates and other skills, who left the country during the military dictatorship in the 1970s, or were somehow expelled due to the economic crisis in 2001," she said.

"A comprehensive and serious immigration policy should include them as well, whether in terms of economic or academic ties," Mendez added.

Insecurity

Public security is one of the biggest concerns of Uruguayans today, especially those living in the interior of the country, said Gerardo Caetano, a professor of political science at the University of the Republic.

Cardoso, the future tourism minister, tells BBC Brazil that although the "deterioration" in the area of public safety was one of the reasons behind Lacalle Pou's election, the country "is still very safe, compared to others in the region, and addressing the problem is a government priority.

According to official data, Uruguay ranks fourth in South America in terms of the number of homicides, with a rate of 11.8 per 100,000 inhabitants, behind Venezuela, Brazil, and Colombia.

However, other international rankings, like that of the Mercer consulting firm, point to the Uruguayan capital as "the best place to live" in Latin America.

WHY HAVE THERE BEEN ONLY 3 MILLION URUGUAYANS FOR MORE THAN 30 YEARS?

Uruguay is "a country on the verge of extinction," then-President José Mujica said in late 2011.

At the time, the national census was in full swing and its results would not be known until 10 months later, but Mujica already was convinced that "the sad news" would come that, for the first time in history, Uruguay's population would not have grown. However, his prognosis failed.

The study by the National Institute of Statistics (INE) found that the country had 3,286,314 inhabitants, 45,311 more than in 2004, the date of the previous national census.

The figure, received with optimism in the local political arena, may cause surprise in the context of Latin America and the Caribbean, a region that even became the one with the highest population growth in the world.

To give an idea, Uruguay managed to surpass the 3 million mark for the first time in 1985, according to the latest Demographic Observatory of the Economic Commission for Latin America and the Caribbean (ECLAC).

That same year, also according to ECLAC, the countries in the region with similar populations were Nicaragua (3.7 million) and Costa Rica (2.7 million).

Today, Nicaragua has 6.2 million inhabitants and Costa Rica is about to reach 5 million, while in Uruguay, a country large enough to contain these two Central American nations, the population still does not reach 3.5 million.

But how can it be that Uruguayans have been 3 million for more than 30 years?

More cows than people

Part of the explanation for why Uruguay is demographically small lies in its origins, demographer Wanda Cabella, coordinator of the Population Program at the Faculty of Social Sciences of the University of the Republic (Uruguay), told BBC Mundo.

The "little country", as its inhabitants affectionately call it, has a rather more derogatory name in the history books: "Plugged-up State".

The creation of the Oriental Republic of Uruguay with British mediation at the beginning of the 19th century, in truth, sought to prevent the giants of Argentina and Brazil from having control over the strategic port of Montevideo.

That's why, when the boundaries of their territory were defined, nobody seemed to care that the place had more cows than people.

In fact, according to the well-known Uruguayan historian José Pedro Barrán, extensive cattle-raising (the production method that has characterized the country) is another factor that influenced the scarce population.

After all, little labor is needed to control the cows and sheep that graze freely in the countryside.

Another factor was the fact that the indigenous population, already scarce in numbers, was annihilated barely a year after the first constitution was sworn in, in 1830.

The country was then populated with immigrants, especially Europeans, whose ideas and culture prevailed, Cabella said.

These immigrants, she added, influenced Uruguay's early modernization in the late 19th century, with universal health and education, and advanced ideas that birth control can be done and you don't have to have "all the children God sends you.

In other words, Uruguay "began to incorporate the idea of being an exceptionality within Latin America and that led to it being compared to a European country," said political scientist and historian Gerardo Caetano in an interview with local radio station El Espectador.

Although the country is proud to call itself the "Switzerland of America", behind the nickname are several reasons for its smallness.

"A town of old men"

Beyond the historical reasons, three components in particular must be analyzed to understand why the Uruguayan population is growing at an annual rate of only 0.19%, according to the 2011 INE census.

The first is the low birth rate. While in Bolivia, Haiti and Guatemala women have an average of three children, in Uruguay they barely have two.

These data from ECLAC, which belong to the 2010-2015 period, indicate that the total fertility rate in Uruguay is below replacement level.

Perhaps that's why when last month the sub-secretary of public health announced that 47,049 babies were born in 2016, 1,877 less than in 2015, she felt the need to clarify again and again: "Uruguayans are not going to become extinct.

This is where the second component becomes important, which is also low mortality.

According to a 2016 report by the World Health Organization, life expectancy at birth in Uruguay is 77 years.

Mujica, with his famous eloquence, summed it up better: "We are a people of old men".

But there is a third element.

"From the 1960s until a few years ago, the third factor of low population growth is emigration," Juan José Calvo, deputy representative of the United Nations Population Fund, told BBC Mundo.

These Uruguayans are usually young people of childbearing age, which "leads to slower growth rates and ageing".

The Foreign Ministry estimated in 2016 that there are 550,000 Uruguayans living abroad.

Who pays?

While Uruguay's stagnant, aging population reads positively ("it's the consequence of development, because of high life expectancy and the free exercise of human rights," according to Calvo), it also creates challenges.

As there are fewer people of working age and older adults, financing the retirement and pension system "becomes an issue of concern," Cabella said.

The same is true for health, the care system, and intergenerational integration, Calvo added.

However, Pablo Álvarez, general coordinator of the Planning and Budget Organisation (OPP), told BBC Mundo that studies carried out by the Sectoral Population Commission since its creation in 2010 indicate that this is not a problem for Uruguay.

"The latest analyses show that there would be no financial risk in the medium term," said Álvarez.

Therefore, at this time the government does not plan to raise the retirement age, one of the first (and most unpopular) measures against this demographic reality.

But neither are other impact measures being implemented to have more young people and eventually exceed 3 million.

Few but good

In recent years, political representatives from different sectors have presented proposals that range from making tax deductions for middle-class families with three or more children to creating incentive plans to encourage the arrival of Latin American rural workers.

However, both Cabella and Calvo agree that the country should not consider population growth as a national goal.

In addition to having very little success and involving large investments of money, birth incentive programs raise ethical questions, Cabella said: "Why would the state encourage its citizens to have more children? Why should politics meddle in people's private lives?

The important thing, Cabella and Calvo agreed, is that women who do not want to have children do not have them, and that those who wish to be mothers can achieve it.

According to Álvarez, the current position of the Uruguayan government is to increase the population and improve the quality of life of those who are already there.

With measures such as increases in paid leave for mothers and fathers, or the creation of free childcare centers for children ages 0-3, the state seeks to ensure that children are not a burden to working women, she said.

Álvarez also said that although Uruguay is not promoting itself as a destination for immigrants, 18,000 foreigners, especially from Latin America and the Caribbean, are expected to settle in Uruguay by 2018.

The country maintains an almost "open door" policy for migrants, granting "rights to health, work, social security, housing and education on an equal footing with nationals," according to Uruguayan legislation.

In any case, none of these are "aggressive measures" towards the issue, a sign that it is not a priority for the government.

As Alvarez says, "In Uruguay we are who we are.

Will it ever be 4 million?

Now, the million-dollar question is: will Uruguayans ever make it to 4 million?

The INE projects that by 2050 there will be 3,705,000 inhabitants, but according to Cepal, in that same decade, the population will stop growing as little as it already does. Therefore, that would become the moment with the most Uruguayans in history.

Calvo, on the other hand, said that "from the point of view of what is reasonable to expect, it is estimated that in the next century Uruguay's population will be between 3.2 and 4 million.

In any case, both Calvo and Cabella are convinced that Uruguay was born as a small country and will remain so. And there is nothing wrong with that.

By Mexicanist, with information from the BBC Brazil & BBC Mundo