Uruguay was inhabited by the Charrúa people for approximately 4000 years before the Portuguese established Colonia del Sacramento, one of the oldest European settlements in the region, in 1680. Montevideo was founded as a military stronghold by the Spanish in the early 18th century, signifying the competing claims over the region. Uruguay won its independence between 1811 and 1828, following a four-way struggle between Spain, Portugal, Argentina and Brazil. It remained subject to foreign influence and intervention throughout the 19th century, with the military playing a recurring role in domestic politics until the late 20th century. Modern Uruguay is a democratic constitutional republic, with a president who serves as both head of state and head of government.
Uruguay is ranked first in Latin America in democracy, peace, lack of corruption, e-government, and is first in South America when it comes to press freedom, size of the middle class and prosperity. On a per-capita basis, Uruguay contributes more troops to United Nations peace-keeping missions than any other country. It ranks second in the region on economic freedom, income equality, per-capita income and inflows of FDI. Uruguay is the third-best country on the continent in terms of HDI, GDP growth, innovation and infrastructure. It is regarded as a high-income country (top group) by the UN. Uruguay is also the third-best ranked in the world in e-Participation. Uruguay is an important global exporter of combed wool, rice, soybeans, frozen beef, malt and milk. Nearly 95% of Uruguay’s electricity comes from renewable energy, mostly hydroelectric facilities and wind parks.
The Economist named Uruguay “country of the year” in 2013, acknowledging the innovative policy of legalizing the production, sale and consumption of cannabis. Same-sex marriage and abortion are also legal, leading Uruguay to be regarded as one of the most progressive nations in the world, and one of the most socially developed, outstanding regionally, and ranking highly on global measures of personal rights, tolerance, and inclusion issues.
The Uruguayan armed forces are constitutionally subordinate to the president, through the minister of defense. Armed forces personnel number about 14,000 for the Army, 6,000 for the Navy, and 3,000 for the Air Force. Enlistment is voluntary in peacetime, but the government has the authority to conscript in emergencies.
Since May 2009, homosexuals have been allowed to serve openly in the military after the defence minister signed a decree stating that military recruitment policy would no longer discriminate on the basis of sexual orientation. In the fiscal year 2010, the United States provided Uruguay with $1.7 million in military assistance, including $1 million in Foreign Military Financing and $480,000 in International Military Education and Training.
Uruguay experienced a major economic and financial crisis between 1999 and 2002, principally a spillover effect from the economic problems of Argentina. The economy contracted by 11%, and unemployment climbed to 21%. Despite the severity of the trade shocks, Uruguay’s financial indicators remained more stable than those of its neighbours, a reflection of its solid reputation among investors and its investment-grade sovereign bond rating, one of only two in South America.
In 2004, the Batlle government signed a three-year $1.1 billion stand-by arrangement with the International Monetary Fund (IMF), committing the country to a substantial primary fiscal surplus, low inflation, considerable reductions in external debt, and several structural reforms designed to improve competitiveness and attract foreign investment. Uruguay terminated the agreement in 2006 following the early repayment of its debt but maintained a number of the policy commitments.
In 2010, Uruguay’s export-oriented agricultural sector contributed to 9.3% of the GDP and employed 13% of the workforce. Official statistics from Uruguay’s Agriculture and Livestock Ministry indicate that meat and sheep farming in Uruguay occupies 59.6% of the land. The percentage further increases to 82.4% when cattle breeding is linked to other farm activities such as dairy, forage, and rotation with crops such as rice.
According to FAOSTAT, Uruguay is one of the world’s largest producers of soybeans (9th), greasy wool (12th), horse meat (14th), beeswax (14th), and quinces (17th). Most farms (25,500 out of 39,120) are family-managed; beef and wool represent the main activities and main source of income for 65% of them, followed by vegetable farming at 12%, dairy farming at 11%, hogs at 2%, and poultry also at 2%. Beef is the main export commodity of the country, totaling over $1 billion US dollars in 2006.
In 2007, Uruguay had cattle herds totalling 12 million head, making it the country with the highest number of cattle per capita at 3.8. However, 54% is in the hands of 11% of farmers, who have a minimum of 500 head. At the other extreme, 38% of farmers exploit small lots, and have herds averaging below one hundred head.