The exchange difference with Argentina continues to generate an exodus of people from Uruguay towards the neighboring country, motivated by the cheapest prices in all kinds of products and services, from fuel and grocery items to rent. In that sense, they are 8,800 people who every day, on average, cross from Leap to the Argentine city of Concord.
“The difference is abysmal!”holds Carlos Garcilar to AFP, summarizing in just four words the problems facing the Uruguayan economy in the face of an even more complex Argentine economy. Is that the devaluation of the Argentine peso goes against the strengthening of the local currency; and this, added to a Uruguay structurally more expensive than its neighboring country, it only enlarges a price gap that the eastern residents take advantage of on the other side of the border.
Garcilar is a 65-year-old mechanic who, before retiring, was one of the 8,800 Uruguayans who, on average, cross into Argentina per day —according to data from Concordia-Salto Border Center. Now he rents in Concordia for a fifth of what he would pay in Salto. This housing decision was also made by many people who, although they still work in the coastal city, prefer the trip that high costs of living in Uruguay.
However, with spikes that have reached 14,000 people per day who cross the border —especially on weekends, when the long lines of cars can be seen at the international bridges—, the greatest negative impact is suffered by shops of the coastal departments, which have seen their sales strongly affected.
This, in turn, is reflected in unemployment levels in the area. although in Artigas, Salto, Paysandu and Black river, Employment indices improved between May and June, they continue to be the highest figures in the country, above two figures. In this sense, the last disaggregated report of the National Statistics Institute (INE), Río Negro registered 13.4% unemployment; Paysandú, 11.3%; Artigas, 11.3%; and Jump, 12.8%.
When buying cheap is expensive
Although the exchange difference seems to be in favor of the Uruguayans —while purchases are much cheaper and with the same plant “we buy two, three things”—, the reality is that the national economy feels the daily exodus impactwhich is not only of people but also of internal consumption and of tax collection.
At the local level, the economic strangulation is palpable: “We have had to lay off staff and we have people in the unemployment insurance“, it states Maria Del Carmen Villarowner of the Pasteur Pharmacy. Pharmacy items, especially medicines, are among those most affected by the price difference with Argentina.
For his part, Rodolfo Germano, service station manager stop 19also deplores the drop in sales, even with the tax reduction for fuels in the border area arranged by the government. “There is smuggling of all products, including fuel”, denounces.
For the people of Salta, the situation at the border “is like when the sea recedes due to a tsunami”: “We enjoy gathering little snails that used to cover the ocean, but then the wave comes and destroys it.”
Source: Ambito
