Uruguay vs Panama Revisited
Sorry about that but, I believe that I got it wrong when I predicted that the financial crisis in Argentina would make a huge impact on living standards and the economic growth rate in Uruguay.
Uruguay appears to have weathered this “second potential Argentinian bond default” with considerable aplomb. In addition, the new transparency banking standards implemented in Uruguay for foreign deposits have significantly reduced Argentinian deposits. A double economic whammy which seems to have been accommodated.
Economist Country of the Year
On a totally different front, the “The Economist” assigned its first “Country of the Year” award in 2013 to Uruguay primarily for its bold legislation on legalizing the consumption AND production of marijuana in a dramatic strike against the global “war on drugs”. Many other governments have seriously considered drug legalization but “wimped out” when it came time for action always leaving it to the “next administration”. Cutting out the criminal “middle man” is probably the only logical solution to winning the “drug war”. Panama, of course, has a greater exposure to drugs than Uruguay. It comprises an integral section of the infamous “drug trafficking corridor” to North America from Columbia, Bolivia and now Peru.
Panama vs Uruguay
Back to the Panama vs. Uruguay issue. Where is it potentially more interesting to live and retire? Panama seems to always claim the top spot with Uruguay quite low on the list with several organizations such as International Living and Live and Invest Overseas.
Here is yet another “check list” for comparison purposes on these two countries:
1. You may find the weather a bit too hot in Panama whereas Uruguay offers “San Diego” type coolness with summers somewhat warmer than San Diego and winters a bit cooler at night with temperatures rarely dipping below 40 degrees.
2. The cost of living in Uruguay is virtually the same as in Panama now that the Peso has declined against the dollar by almost 20% in the last three years. Of course some items such as the cost of purchasing a car (and gas) are considerably higher while other items are lower such as quality medical insurance and housing. Owning your own house with a $30,000 per annum budget is more than ample without denying any pleasures. A per annum budget of $20,000 to $25,000 is also very feasible except in the highest priced areas.
3. The economy of Uruguay remains strong and diversified in spite of the Argentinian and Brazilian slowdowns. Real estate prices have continued to increase. Uruguay has the highest per capita income in Central and South America. According to the latest figures of the World Bank, the per capita income for Uruguay for 2013 was USD$16,351 and for Panama it was $11,037 or virtually 50% higher. The Public Debt ranking by Mecometer based on the percent debt of GDP places Uruguay #45 and Panama #90 (http://mecometer.com/topic/public-debt/).
4. Taxes in Panama and Uruguay are relatively similar and rather low. No inheritance tax, no capital gains tax. Generally no tax on income earned outside the country. In Uruguay there is a flat 12% tax on income derived from real estate. Uruguay still has an annoying global wealth tax but it is being phased out by 2016.
5. It is comforting to note that the same day you are accepted as a “potential permanent resident” of Uruguay (papers not yet approved which can take 3-6 months) you have the “right to work” and the right to receive universal health care (which is ranked better than Panama) and with no pre-existing conditions.
6. In 2014, the World Health Organization rated the quality of health care in the USA at 39, Uruguay at 66 and Panama at 95.
7. A married couple is also eligible for Uruguayan citizenship after only three years of residency. A single person has to wait five years. In Panama a “pensionado” visa is essentially a “glorified tourist” program without rights to citizenship although they now have a new visa leading to citizenship if you come from a “friendly country” and start a business and/or have a University degree and get a job. Never underestimate the value of full citizenship in a country.
8. Educational levels are substantially higher across the board in Uruguay with free university tuition to the PhD level.
9. Cultural activities are more common and sophisticated in Uruguay than in Panama with financial support for cultural activities an integral part of the constitution. For example the famous “Teatro Solis” was opened in Montevideo in 1856 and continues with daily productions to this very day. There are many other “teatros” in Montevideo.
10. The corruption level in Uruguay is ranked #19 (2014) which is exactly the same as the USA. The corruption level in Panama for 2014 was #102.
11. If “not standing out in a crowd” is of any interest to you, Uruguay has a 95% European population primarily from Spain, Italy, France and Portugal.
12. The homicide rate per 100,000 population (2014) in Uruguay is approximately one-third that of Panama (7 vs 19).
13. In Panama, one has to adjust to a permanent “party atmosphere” with very loud music.
14. Garbage pollution along the highways and is much lower in Uruguay than in Panama with a direct impact on the incidence of dengue.
15. The highway/road infrastructure is noticeably better in Uruguay than in Panama.
16. The UN Human Development Index (2014) ranks Uruguay at #50 and Panama at #65.
17. The 2014 Index of Economic Freedom ranks Uruguay at #36 and Panama at #71.
18. Panama is much closer for travel purposes to North America (and Europe) than Uruguay, however, the approximate $500 extra for a round trip ticket and perhaps 6-8 hours of extra transit time is usually not a major stumbling block for most people.
19. Uruguay offers the perfect excuse to visit North America or Europe in the May to September period when the temperatures plunge to an average high of 60-70 and a low of 40-50. Great tennis and biking weather but not great for swimming.
20. Panama offers several excellent locations for permanent living (Panama City, Coronado, Altos del Maria, Bouquete etc) but none have remotely the pizzazz of Punta del Este during its 4-5 month high season and its calmer 7 month off-season still only 1.5 hours from Montevideo pleasures.
21. Montevideo ranks #1 in Latin America for “quality of living” by Mercer.
22. By 2015, Uruguay will produce/consume 50% of its energy from renewable energy resources (wind, solar, geothermal, and biomass) which is one of the highest percentages in the world. Germany was at about 28% in 2014 and the USA at around 13%.