International Development written question – answered on 30th March 2006.

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Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Shadow Minister (Foreign and Commonwealth Affairs)

To ask the Secretary of State for International Development what steps his Department is taking to assist Uruguay to diversify its trade.

Photo of Gareth Thomas Gareth Thomas The Parliamentary Under-Secretary of State for International Development, Party Chair, Co-operative Party

As a middle income country, Uruguay receives a relatively low share of international development assistance. DFID does not provide direct bilateral assistance to Uruguay. DFID's main financial contribution to Latin America is through the UK's contributions to multi-lateral organisations such as the European Commission (EC), the Inter-American Development Bank (IADB) and the World Bank, whose programmes include support to Uruguay's development.

The EC's present country strategy paper (2001 to 2006) for Uruguay, with indicative funding of €18.6 million, includes an €8.4 million (45 per cent.) component for economic reform. This is aimed particularly at helping Uruguay to diversify its industrial base beyond the production and export of commodities. Furthermore, the Commission is continuing to negotiate with Mercosur, of which Uruguay is a member, for a new EU-Mercosur free trade agreement. If successfully achieved, such an agreement, with appropriate complementary policy measures in place, could be expected to contribute to Uruguay's trade diversification.

The World Bank's country assistance strategy for Uruguay, which projects assistance of up to US$800 million between 2005 and 2010, includes the promotion of sustained and broad-based growth. New loan projects, such as a $70 million project to upgrade the country's transport infrastructure, can be expected to help facilitate access to markets and diversification of economic activity.

The Inter-American Development Bank (IADB) country strategy for Uruguay (2005 to 2009) includes the objective of enhancing the regional and international competitiveness of national outputs and promoting private sector investment. Within this, the strategy aims to strengthen Uruguay's access to export markets and the internationalisation of its business and industry.

As part of its regional assistance plan for Latin America, DFID is also providing £7.5 million over four years (2005 to 2009) to strengthen the effectiveness of the World Bank and the Inter-American Development Bank in reducing poverty in Latin America through activities related to markets and international trade. While aimed primarily at those countries in the region with lower incomes and greater poverty, the programme could bring benefits to Uruguay in terms of the improved effectiveness and operations of the World Bank and the Inter-American Development Bank.

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