Uruguay

Paso de los Toros, Uruguay

Integrated Policy and Programming

Innovation and Learning

Shifting the economic base from extractives to knowledge

In July 2019, Uruguay and the Finnish multinational UPM signed a US$3.3 billion agreement to build a greenfield eucalyptus pulp mill near the city of Paso de los Toros. This is the largest foreign direct investment in the country's history, estimated to bring thousands of new jobs and boost GDP. However, with such major investment comes the possibility of negative externalities - and lost opportunities. UNDP is supporting the country to leverage the momentum around the investment to lay out a more sustainable future, one that focuses on economic diversification, local knowledge and sound environmental policies.

UNDP'S Response

Borrowing from the Finnish Innovation Fund Sitra and its studio approach, UNDP is supporting Uruguay to rethink its development track and pivot towards systemic change. In December 2019, UNDP deployed a team of eight people with expertise in strategic design, impact investment, social protection and climate economics, to devise a strategic vision for the country and identify a top 10 list of implementable opportunities – to shift the economic base from extractives to knowledge. UNDP is currently working with the new administration to implement the proposals. These include boosting citizen engagement around the investment through a co-design process, creating a fund for women's economic empowerment to help transform the country's economy ('Mujeres Innovadoras'), and designing an 'architecture of solutions' for children and youth to tackle urban inequalities in the areas impacted by the new pulp mill. Learn more about the proposals here.