Economy of Uruguay
The economy of Uruguay is characterized by an export-oriented agricultural sector and a well-educated work force, along with high levels of social spending. After averaging growth of 5% annually during 1996–98, Uruguay's economy suffered a major downturn in 1999–2002, stemming largely from the spillover effects of the economic problems of its large neighbors, Argentina and Brazil. In 2001–02, Argentine citizens made massive withdrawals of dollars deposited in Uruguayan banks after bank deposits in Argentina were frozen, which led to a plunge in the Uruguayan peso, causing the 2002 Uruguay banking crisis.
History
In the 19th century, the country had similar characteristics to other Latin American countries: caudillism, civil wars and permanent instability, foreign capitalism's control of important sectors of the economy, high percentage of illiterate people.José Batlle y Ordóñez, President from 1903 to 1907 and again from 1911 to 1915, set the pattern for Uruguay's modern political development and dominated the political scene until his death in 1929. Batlle introduced widespread political, social, and economic reforms such as a welfare program, government participation in many facets of the economy and a new constitution. Batlle nationalized foreign owned companies and created a modern social welfare system. Income tax for lower incomes was abolished in 1905, secondary schools established in every city, telephone network nationalized, unemployment benefits were introduced, eight-hour working day introduced, etc.
Claudio Williman who served between Batlle’s two terms was his supporter and continued all his reforms, as did the next President Baltasar Brum. Around 1900 infant mortality rates in Uruguay were among the world's lowest, indicating a very healthy population.
The number of trade unionists has quadrupled since 2003, from 110,000 to more than 400,000 in 2015 for a working population of 1.5 million people. According to the International Trade Union Confederation, Uruguay has become the most advanced country in the Americas in terms of respect for "fundamental labour rights, in particular freedom of association, the right to collective bargaining and the right to strike.
Currency
Uruguay has a partially dollarized economy. almost 60% of bank loans use United States dollars, but most transactions use the Uruguayan peso.Sectors
Agriculture, Textiles and Leather
Throughout Uruguay's history, their strongest exporting industries have been beef and wool. In the case of beef exports, they have been boosted since Uruguay joined the Mercosur agreement in 1991 and the country has been able to reach more distant markets, such as Japan. In the case of wool exports, they have not been doing so well in recent years suffering from other competitors in the market like New Zealand and the fluctuations of its demand during the 2008/09 recession in the developed world. At the same time with timber refining being kept within the country, forestry has become a growth industry in the recent years.Energy
Uruguay imports crude and refined oil from other countries. It produces different types of petroleum products.Uruguay is endowed with renewable energy resources and the country produces 95% of its electricity from alternative energy sources. The country is likely to benefit greatly from the global transition to renewable energy and is ranked no. 6 among 156 nations in the index of geopolitical gains and losses after energy transition.
Mining
Although this is a sector that does not make substantial contributions to the country's economy, in recent years there have been some activity in gold and cement production, and also in the extraction of granite.Plastics
Due to two major investments made in 1991 and 1997, the most significant manufactured exports in Uruguay are plastics. These investments laid the way for most of the substantial exports of plastic-based products which has taken a very important role in Uruguay's economy.Telecommunications
In spite of having poor levels of investment in the fixed-line sector, the small size of Uruguay's population has enabledthem to attain one of the highest teledensity levels in South America and reach a 100% digitalization of main lines. Although the telecommunications sector has been under a state monopoly for some years, provisions have been made to introduce liberalization and to allow for entry of more firms into the cellular sector.
Travel & Tourism
In 2013, travel and tourism accounted for 9.4% of the country's GDP. Their tourist industry is mainly characterized for attracting visitors from neighboring countries. Currently Uruguay's major attraction is the interior, particularly located in the region around Punta del Este.Specialties of Uruguay
- Cattle were introduced to Uruguay before its independence by Hernando Arias de Saavedra, the Spanish Governor of Buenos Aires in 1603. Beef exports in 2006 amounted to around 37% of Uruguayan exports.
- Wool is a traditional product exported mainly to America, followed by the UK and India.
- Milk and dairy products. Conaprole, National Cooperative of Milk Producers is the main exporter of dairy products in Latin America. The area of the country dedicated to the dairy food is located mainly in the south west.
- Rice. Fine varieties are produced in the lowlands in the east of the country close to Merin lake on the Uruguay-Brazil border. The national company Saman claims to be the main exporter in Latin America. Countries it exports to include Brazil, Iran, Peru, South Africa, Chile, Senegal, Argentina, Paraguay, Bolivia, Ecuador, USA, Canada and China.
- Tourism: Several seaside resorts, like Punta del Este or Punta del Diablo in the south-eastern departments of Maldonado and Rocha, regarded as a jet set resort in South America, are main attractions of Uruguay. International cruises call at Montevideo from October to March every year. Also, Uruguay hosts many year-round international conferences.. Montevideo is home to the headquarters of , the Common Market of the South, whose full members are Uruguay, Argentina, Brazil, Paraguay and Venezuela, associate members Bolivia, Chile, Colombia, Ecuador and Peru.
- Software and consulting. Uruguay's well-educated workforce and lower-than-international wages have put Uruguay on the IT map. A product named GeneXus, originally created in Uruguay by a company called ArTech, is noteworthy. Other important developers and consultants include De Larrobla & Asociados, Greycon and . Tata Consultancy Services has its headquarters for the Spanish speaking world in Uruguay. Many of these companies have established in .
"With a population of only three million, Uruguay has rapidly become Latin America's outsourcing hub. In partnership with one of India's largest technology consulting firms, engineers in Montevideo work while their counterparts in Mumbai sleep." - The New York Times, Sep 22, 2006.
- Banking Services. Banking has traditionally been one of the strongest service export sectors in the country. Uruguay was once dubbed "the Switzerland of America", mainly for its banking sector and stability. The largest bank in Uruguay is Banco República, or BROU, which is state-owned; another important state bank is the BHU. Almost 20 private banks, most of them branches of international banks, operate in the country. There are also a myriad of brokers and financial-services bureaus, among them Ficus Capital, Galfin Sociedad de Bolsa, Europa Sociedad de Bolsa, Darío Cukier, GBU, Hordeñana & Asociados Sociedad de Bolsa, etc. Uruguay has fully recovered from the financial crisis that caused a run on its banks.
- Public Sector: The state in Uruguay has an important role in the economy, Uruguay resisted the trend of privatization in Utilities and state owned enterprises in the region. Several Referendums supported the state being in control of the most important utilities and energy companies. Some of the companies have a full monopoly warranted by law, others compete freely with private operators. Most of them are dominant in the local market. There is strong debate in the Uruguayan society about their role, and future. Some of them made a contribution to the Uruguay state treasury.
- *The most important state owned companies are: Republica AFAP, AFE, ANCAP, ANCO, Administracion Nacional de Puertos, ANTEL, BHU, BROU, BSE, OSE, UTE . These companies operate under public law, using a legal entity defined in the Uruguayan Constitution called 'Ente Autonomo'. The government also owns parts of other companies operating under private law like the National Airline Carrier PLUNA and others owned totally or partially by the CND National Development Corporation.
Trade Agreements
Raw Data
The following table shows the main economic indicators in 1980–2017.| Year | GDP in $ | GDP per capita in $ | GDP growth | Inflation | Unemployment rate | Poverty | Government debt |
| 1980 | 12.46 Bln. | 4,240 | 6.0 % | 63.5 % | ... | ... | ... |
| 1985 | 14.41 Bln. | 4,749 | 1.5 % | 72.2 %. | 13.1 % | ... | ... |
| 1990 | 20.33 Bln. | 6,511 | 0.3 % | 112.5 % | 8.5 % | ... | ... |
| 1995 | 27.81 Bln. | 8,616 | −1.4 % | 42.2 % | 10.3 % | ... | ... |
| 2000 | 33.33 Bln. | 9,952 | −1.8 % | 4.8 % | 13.4 % | 17.8 % | ... |
| 2005 | 38.42 Bln. | 11,461 | 6.8 % | 4.7 % | 12.1 % | 29.2 % | 84 % |
| 2006 | 41.23 Bln. | 12,277 | 4.1 % | 6.4 % | 10.8 % | 32.5 % | 76 % |
| 2007 | 45.09 Bln. | 13,425 | 6.5 % | 8.1 % | 9.4 % | 29.6 % | 68 % |
| 2008 | 49.28 Bln. | 14,652 | 7.2 % | 7.9 % | 7.9 % | 24.2 % | 60 % |
| 2009 | 51.76 Bln. | 15,321 | 4.2 % | 7.1 % | 7.8 % | 21.0 % | 63 % |
| 2010 | 56.48 Bln. | 16,627 | 7.8 % | 7.0 % | 7.0 % | 18.5 % | 59 % |
| 2011 | 60.62 Bln. | 17,763 | 5.2 % | 8.1 % | 6.4 % | 13.7 % | 58 % |
| 2012 | 63.92 Bln. | 18,655 | 3.5 % | 8.1 % | 6.3 % | 12.4 % | 58 % |
| 2013 | 67.96 Bln. | 19,756 | 4.6 % | 8.6 % | 6.5 % | 11.5 % | 60 % |
| 2014 | 71.42 Bln. | 20,681 | 3.2 % | 8.9 % | 6.6 % | 9.7 % | 61 % |
| 2015 | 72.47 Bln. | 20,902 | 0.4 % | 8.7 % | 7.5 % | 9.7 % | 65 % |
| 2016 | 74.45 Bln. | 21,395 | 1.5 % | 9.6 % | 7.9 % | 9.4 % | 62 % |
| 2017 | 78.15 Bln. | 22,371 | 3.1 % | 6.2 % | 7.4 % | 7.9 % | 66 % |
- Industrial production growth rate: 12.6%
- Electricity - production: 9,474 GWh
- *fossil fuel: 3.91%
- *hydro: 95.62%
- *nuclear: 0%
- *other: 0.47%
- Electricity - consumption: 6,526 GWh
- Electricity - exports: 2,363 GWh
- Electricity - imports: 78 GWh
- Agriculture - products: wheat, rice, barley, maize, sorghum; livestock; fish
- Exchange rates: Uruguayan pesos per US dollar - 24.048, 24.479, 28.704, 28.209, 21.257
Uruguay in the world
| Index | Source | Rank | Published |
| Quality of Living index | Mercer | 77° | 2018 |
| Human Development Index | UNDP | 57° | 2019 |
| Democracy Index | Economist Intelligence Unit | 15° | 2019 |
| Global Peace Index | Vision of Humanity | 37° | 2018 |
| Prosperity Index | Legatum | 30° | 2018 |
| Corruption Perceptions Index | Transparency | 23° | 2019 |
| Economic Freedom Index | Heritage | 40° | 2019 |
| Global Competitiveness Report | World Economic Forum | 53° | 2018 |
| Cost of Living Index | Expatistan | 45° | 2019 |
| Debt Rating | Moodys | BAA2 | 2017 |
| Debt Rating | S&P | BBB | 2017 |
| Debt Rating | Fitch | BBB- | 2018 |
| Developed Country Recognition | World Bank | High Income | 2018 |
| Developed Country Recognition | United Nations | Very High HDI | 2018 |
| Index of Geopolitical Gains and Losses after Energy Transition | Overland et al. | 6 out of 156 | 2019 |