Drought strains Uruguay's economy

Bnamericas Published: Thursday, January 26, 2023
Drought strains Uruguay's economy

Uruguay increasingly has to fend off effects of water scarcity, while authorities are moving to secure provision for human consumption.

ArgentinaChile and Bolivia have taken similar steps.

An agricultural emergency was declared in October and recently extended through April as the situation has not improved, according to a press release by the agriculture ministry.

Since the original declaration, 1,300 producers had requested assistance from an emergency fund, with over half of the applications having been submitted this month.

Other measures include subsidized loans with extended deadlines, agreements with departmental governments to supply water and additional financial assistance for producers, lower electricity bills for those who require irrigation and postponing tax payments.

But human consumption is at risk as well. The head of state water utility OSE, Raúl Montero, said last week that the Metropolitan area, which includes the Montevideo and Canelones departments, has water for only 80 more days, while areas in the east are under even more strain.

He told Radio Carve that OSE was planning to move water from the Metropolitan area to alleviate the situation.

An OSE flagship water project, the US$200mn Neptuno plant plus pipelines, was approved by the utility’s board in late 2022 and would improve water access in the Metropolitan area.

However, OSE workers’ unions and left-wing lawmakers are opposing the project with legal measures because private companies are involved. They claim the project would lead to water privatization and contradict a 2004 plebiscite, which established water distribution and sanitation as public services.

The government defends the project, saying that while the treatment plant will be built by a private party, OSE will be the administrator.

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