You are working for a computer manufacturer that is planning to set up an assemb

Question

You are working for a computer manufacturer that is planning to set up an assembly unit in Uruguay to serve the region. Since this would involve importing parts from other countries and then exporting the finished products throughout Latin America, top management has requested information on the trading practices of Uruguay. In particular, these managers want to know: 1) the average time to clear both imports and direct exports through Customs; 2) the percentage of losses from direct export due to theft, as well as, breakage; and 3) the percentage of firms identifying Customs and trade regulations as a major constraint. Using Enterprise Surveys, a site provided by the World Bank, that measures business perceptions of the investment climate, prepare a brief executive report summarizing your findings. How does Uruguay compare to other countries in Latin America on these measures?

Explanation / Answer

1)

After going through the world bank site, http://data.worldbank.org/indicator/IC.CUS.DURS.EX, approximaely, average time of 6 days would be consumed clear exports and 9 days to clear imports through Customs.

2.

As per the website, tps://openknowledge.worldbank.org/bitstream/handle/10986/20908/924660WP0Box380PUBLIC00Uruguay02010.txt?sequence=2, the percentage of losses fron direct exports due to theft would be 0.3% , 0.8% for brekage and spoilage.

3.

Nearly 3% of firms are identifyin Customs and trade regulation as a major constraint, as per the website, https://www.enterprisesurveys.org/~/media/GIAWB/EnterpriseSurveys/Documents/Profiles/English/uruguay-2010.pdf

The brief executive report is listed below:

Uruguay seems to have a more favorable and conducive environment for doing business when compared to other countries in Latin America. The incidence of graft index is 1.3 in Uruguay while it is a whooping 6.0 for Latin America. In terms of regulations, taxes, and other business licensing indicators, Uruguay fares well. For example days to obtain import licence is 10 days in Uruguay, compared to the Latin America figure of 24 days. The average time to clear imports and exports through customes is also lower for Uruguay than the Latin American average.

In terms of crime and informality indicators, Uruguay seems to offer a better control on crimes. Security costs for organizations as a percentage of sales was 0.5% for Uruguay and the Latin American figure is 1.4%.

The country seems to be lagging slughtly in terms of innovation. The percentage of firms with internationally recognised quality certification are 10.8%, lower than the Latin America figure of around 16%.

Overall, Uruguay seems to be a good place to start business, compared to othet Latin American countries.

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