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Uruguay's economy is characterized by an export-oriented agricultural sector, a well-educated workforce, and high levels of social spending, as well as a developed industrial sector. After averaging growth of 5% annually in 1996-1998, in 1999-2001 the economy suffered from lower demand in Argentina and Brazil, which together account for nearly half of Uruguay's exports. Despite the severity of the trade shocks, Uruguay's financial indicators remained more stable than those of its neighbors, a reflection of its solid reputation among investors and its investment-grade sovereign bond rating — one of only two in South America. In recent years Uruguay has shifted most of its energy into developing the commercial use of IT technologies and has become an important exporter of software in Latin America. While some parts of the economy appeared to be resilient, the downturn had a far more severe impact on Uruguayan citizens, as unemployment levels rose to more than twenty percent, real wages fell, the peso was devalued, and the percentage of Uruguayans in poverty reached almost 40%. These worsening economic conditions played a part in turning public opinion against the free market economic policies adopted by the previous administrations in the 1990s, leading to popular rejection of proposals for privatization of the state petroleum company in 2003 and of the state water company in 2004. The newly elected Frente Amplio government, while pledging to continue payments on Uruguay's external debt, has also promised to undertake a crash jobs programs to attack the widespread problems of poverty and unemployment. |
Uruguay Information: Inside
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