Population: 3.3 million

Date of Independence: August 25, 1828

Area: 176,215 sq km

Climate: Warm temperate

Major Industries: Agriculture, Cement, Fishing, Meat Processing, Oil Refining

Currency: Peso (UrP)

History:

The only inhabitants of Uruguay before European colonization of the area were the Charrua Indians, a small tribe driven south by the Guarani Indians of Paraguay. The Spanish discovered the territory of present-day Uruguay in 1516, but the Indians’ fierce resistance to conquest, combined with the absence of gold and silver, limited settlement in the region during the 16th and 17th centuries. The Spanish introduced cattle, which became a source of wealth in the region. Spanish colonization increased as Spain sought to limit Portugal’s expansion of Brazil’s frontiers.

Montevideo was founded by the Spanish in the early 18th century as a military stronghold; its natural harbor soon developed into a commercial center competing with Argentina’s capital, Buenos Aires. Uruguay’s early 19th century history was shaped by ongoing conflicts between the British, Spanish, Portuguese, and colonial forces for dominance in the Argentina-Brazil-Uruguay region. In 1811, Jose Gervasio Artigas, who became Uruguay´s national hero, launched a successful revolt against Spain. In 1821, the Provincia Oriental del Rio de la Plata, present-day Uruguay, was annexed to Brazil by Portugal. The Provincia declared independence from Brazil in August 25, 1825 (after numerous revolts in 1821, 1823, and 1825) but decided to adhere to a regional federation with Argentina.

The regional federation defeated Brazil after 3-year war. The 1828 Treaty of Montevideo, fostered by the United Kingdom, gave birth to Uruguay as an independent state. The nation’s first constitution was adopted in 1830. The remainder of the 19th century, under a series of elected and appointed presidents, saw interventions by neighboring states, political and economic fluctuations, and large inflows of immigrants, mostly from Europe. Jose Batlle y Ordoñez, president from 1903 to 1907 and again from 1911 to 1915, set the pattern for Uruguay’s modern political development. He established widespread political, social, and economic reforms such as a welfare program, government participation in many facets of the economy, and a plural executive. Some of these reforms were continued by his successors.

By 1966, economic, political, and social difficulties led to constitutional amendments, and a new constitution was adopted in 1967. In 1973, amid increasing economic and political turmoil, the armed forces closed the Congress and established a civilian-military regime, characterized by repression and widespread human rights abuses. A new constitution drafted by the military was rejected in a November 1980 plebiscite. Following the plebiscite, the armed forces announced a plan for return to civilian rule. National elections were held in 1984. Colorado Party leader Julio Maria Sanguinetti won the presidency and served from 1985 to 1990. The first Sanguinetti administration implemented economic reforms and consolidated democracy following the country’s years under military rule.

Sanguinetti’s economic reforms, focusing on the attraction of foreign trade and capital, achieved some success and stabilized the economy. In order to promote national reconciliation and facilitate the return of democratic civilian rule, Sanguinetti secured public approval by plebiscite of a controversial general amnesty for military leaders accused of committing human rights violations under the military regime, and sped the release of former guerrillas.

The National Party’s Luis Alberto Lacalle won the 1989 presidential election and served from 1990 to 1995. Lacalle executed major structural economic reforms and pursued further liberalization of the trade regime. Uruguay became a founding member of MERCOSUR in 1991 (the Southern Cone Common Market, which includes Argentina, Brazil and Paraguay) . Despite economic growth during Lacalle’s term, adjustment and privatization efforts provoked political opposition, and some reforms were overturned by referendum.

In the 1994 elections, former President Sanguinetti won a new term, which ran from 1995 until March 2000. As no single party had a majority in the General Assembly, the National Party joined with Sanguinetti’s Colorado Party in a coalition government. The Sanguinetti government continued Uruguay’s economic reforms and integration into MERCOSUR. Other important reforms were aimed at improving the electoral system, social security, education, and public safety. The economy grew steadily for most of Sanguinetti’s term, until low commodity prices and economic difficulties in its main export markets caused a recession in 1999, which continued into 2003.

The 1999 national elections were held under a new electoral system established by constitutional amendment. Primaries in April decided single presidential candidates for each party, and national elections on October 31 determined representation in the legislature. As no presidential candidate received a majority in the October election, a runoff was held in November. In the runoff, Colorado Party candidate Jorge Batlle, aided by the support of the National Party, defeated Frente Amplio candidate Tabare Vazquez.

Batlle’s 5-year term began on March 1, 2000. The Colorado Party and National Party (Blancos) continued their legislative coalition, as neither party by itself won as many seats in either chamber as did the Frente Amplio. The formal coalition ended in November 2002, when the Blancos withdrew their ministers from the cabinet, although the Blancos continued to support the Colorados on most issues.

On June 27, 2004 the parties will hold primary elections to select their candidates for the national elections to be held on October 31. The Frente Amplio has already determined that Vazquez will be its candidate and the Colorados have settled on former Interior Minister Guillermo Stirling. Within the Blanco Party there is competition between Lacalle and Jorge Larranaga, a former state governor and senator.

President Batlle’s priorities have included promoting economic growth, increasing international trade, attracting foreign investment, reducing the size of government, and resolving issues related to Uruguayans who disappeared during the military government. His coalition government also has passed laws authorizing the initial demonopolization of the state-owned telecommunications and energy companies, with the latter being overturned by popular referendum in December 2003.

Economy:

Uruguay’s economy is characterized by an export-oriented agricultural sector, a well-educated work force, and high levels of social spending. Following financial difficulties in the late 1990s and early 2000s, economic growth for Uruguay averaged 8% annually during the period 2004-08. The 2008-09 global financial crisis put a brake on Uruguay’s vigorous growth, which decelerated to 2.9% in 2009. Nevertheless, the country managed to avoid a recession and keep positive growth rates, mainly through higher public expenditure and investment, and GDP growth exceeded 8% in 2010.

Mining:

Over the last few years the Uruguayan mining industry has experienced sustained growth. Traditional exploitation of non-metallic minerals for industrial applications has opened the door to the production and processing of granite for export, as well as for semi-precious stones and metallic minerals. Substantial investments have been made in setting up new processing plants and this has brought about an increase in production, the incorporation of new exploitation areas and access to new markets. In 1996, two new projects -one for gold processing and another for cement manufacturing- ranked uppermost in the first of projects declared of national interest in industry because of their significance. From 1995 to 1997, investments in the exploitation of the surfaces under studied have increased threefold, which implies that future development prospects are encouraging. The beginning of gold exploitation which took place in 1997 has taken the number of applications for new prospecting licenses to 70 at the end of the year. However, the true Uruguayan mining potential does not lie in its current production, but rather in its prospects for development. The foremost objectives of the mining policy are to accelerate this exploration process and to strengthen current national output by attracting foreign mining companies to make the most of the promising opportunities the sector has to offer.

Infrastructure and Location:

Covering a surface area of 176,000 km², with a population of 3.2 million inhabitants who live primarily in metropolitan areas, and a temperate climate, Uruguay lies in the south of Latin America, between Argentina and Brazil.

This geographical location is a strategic asset for Uruguay, because it is the natural gateway to this important region as well as being a party state of MERCOSUR, the customs union it has formed with Argentina, Brazil and Paraguay. This agreement allows corporations already installed and those that start operating from Uruguay to have free access to a market made up of 200 million people with a 1.1 trillion dollar GDP, which opens up vast trade prospects for certain minerals such as those required by the construction industry.

This strategic location is supplemented by an excellent infrastructure, and roads, railways, ports, electric power and telecommunications provide easy access to the areas to be explored and a suitable means for the output to be transported elsewhere.

A broad physical communications network links the country with the enlarged MERCOSUR market. The railway network has more than 2,000 km of tracks, and there is a dense road system which, without including rural lanes, covers more than 8,600 kms, 8,000 of which have medium to high quality pavement. The density of its road network places Uruguay at the top of a worldwide list of countries considering the number of kilometres of roads per square kilometre of its surface area.

Moreover, the port system of Uruguay includes Montevideo, which is the deepest natural harbour in MERCOSUR and has great chances of becoming the major regional route for the movement of cargo. This is due to its location, its natural conditions and the efficiency of the services it provides.

Energy:

Uruguay has the largest coverage in Latin America. The electrification rate, defined as the ratio of homes connected to the grid over the total number of homes, is 95%.

Both the mining and the farming sectors have been favoured by an investment policy that targets rural electrification, as a means to give greater support to primary production activities and rise the quality of life of the rural population.

Uruguay has also made large investments in telecommunications and it ranks first in Latin America in technology and coverage. As a result of these efforts, at present it is the only country in the hemisphere, and the sixth in the entire world, to have 100% of its network already digitalized, which ensures full communications reliability.

Telephone density is the highest in Latin America and the cellular telephony system covers the entire Uruguayan territory. Furthermore, the cost of international phone calls is the lowest in the region.

The waterways, formed by a network of rivers with a slight slope, have many ramifications. Additionally, there is groundwater close to the surface which provides Uruguay with abundant groundwater resources and this is another asset for the development of mining activities.