Uruguay is traditionally an agricultural country, mainly focused on livestock farming. Low world demand for the country’s export goods, mainly meat, and high interest rates led to reduced exports in the 1980s. This, together with the burdensome external debt, forced a comprehensive restructuring program in 1990 according to the World Bank’s recommendations. Economic problems in neighboring Brazil and Argentina further undermined the country’s economy.
In 2003, the government initiated a restructuring of the country’s spending and the economy recovered in subsequent years. A contributing reason for this was that the country’s meat exports, including to the US, increased again. Even during the international financial crisis, Uruguay fared better than many expected, and in 2010 economic growth was estimated at just over 8 percent. Since then, however, the growth rate has slowed down, much as a result of increased economic problems for neighboring countries, especially Argentina and Brazil. The country has had a traditionally liberal monetary policy, and the large private banking sector contributes about 20 percent to GDP.
Although only 6% of GDP is agricultural products, rural areas are the dominant sector of the economy. Uruguay is part of the fertile pampas area, and its soil is particularly well suited for the cultivation of fodder plants and for livestock management, Uruguay’s traditional main industry. Of almost 85 percent of Uruguay’s land that is cultivable land, 3/4 is utilized as pasture land. Rice, wheat, maize, oilseeds and barley are grown on the cultivated land (8 percent of the area). Half of the export revenue comes from agricultural products. However, the proportion of labor employed in agriculture has gradually decreased (from 20 percent in 1965 to 13 percent in 2010), which indicates a relatively high productivity in the sector.
Minerals and energy
Uruguay has no economically significant mineral resources. There are coal, but it is of poor quality and expensive to extract. The country’s energy needs are met by imported fossil fuels, which are refined inland, but above all by water energy, which is extracted from dams along the Uruguay River and Río Negro. As a small country with a small industry, Uruguay has become a net exporter of commercial energy (almost 1/3 is exported annually).
Uruguay’s industrial sector is small; it accounts for 24 percent of GDP and employs 14 percent of the labor force. For the main production, the industry that processes agricultural products is responsible for, for example, food, textiles, tobacco and shoes. Oil derivatives, chemical products and transport equipment are also manufactured. Programs to replace imports with domestic production favored industry growth until the 1970s, but were replaced by a decline in a more export-oriented model.
According to Countryaah, Uruguay is traditionally sensitive to demand in the major neighboring countries Argentina and Brazil. Since 1991, Uruguay, together with these, has also been a member of the Mercosur Customs Union, which also includes Paraguay. Main export products are meat, soybeans and cellulose. The increased economic openness with liberalized trade conditions during the 20th century has increased imports and thus the trade deficit.
Tourism and gastronomy
Uruguay is primarily a vacation destination for South Americans. The largest group of the country’s 1.4 million yearly tourists are Argentinians.
The selection of seaside resorts is large. The finely restored small town of Colonia del Sacramento has a well-preserved settlement from the 18th and 19th centuries, city walls, baroque churches and (small) monumental buildings; the city is listed on UNESCO’s World Heritage List. Upstream of the Uruguay River there are a few more colonial cities. There are also the ruins of a Jesuit plant. The capital Montevideo has a number of interesting museums, as well as a large selection of hotels and restaurants.
The food in Uruguay is very similar to that in Argentina and Paraguay, that is, the meat dominates the table altogether. The many barbecue restaurants serve asado (grilled meat), usually with salad and potatoes as an accessory. The country produces good and well-seasoned sausages (chorizos, morcillas, salchichas); The blood sausage morcilla dulce is seasoned with orange and walnuts. Another specialty is mondongo, tripes with beef tomatoes, peppers and chickpeas.
The sea offers many dishes, such as shark (cazón), octopus and mussels. Often the fish becomes a mustard stew (muqueca de peixe). On the streets, fast food is sold in the form of, for example, the media luna mixters, small puff pastry pies with cheese and ham. Common desserts include chajá, jam balls with jam and cream, and massini (a creamy, soft cake).