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Background information

The high-income country Uruguay is the second smallest in South America after Suriname. The free market economy is highly dependent on the export-oriented agricultural sector. Next to food processing, electrical machinery and transportation equipment industries are important. The well-educated workforce is increasingly employed in the software sector. The integration in regional trade networks makes the small country dependent on the economic performance of its neighboring countries.

It is estimated that two third of the nation’s mostly low-lying grassland is occupied for meat or sheep farming. Most of the agricultural products such as soybeans, rice, wheat or meat are produced for export, most of which Uruguay holds a dominant position in. Farms are often family-managed and represent the main source of income. Approximately 10% of the labor force is engaged in farming activities, and the share of child labor in rural areas is declining. Overall, Uruguay is a major cereals exporter.

Uruguay ranks high across South America in terms of most of the development indicators. It is known for a widely secular and liberal society with a good educational and health system, providing for instance free university education. Economic crises in the past led to emigration of parts of the young and educated workforce, leaving an ageing population behind. Despite the overall good indicators, inequality remains high. Almost every tenth child below the age of five is stunted and every fifth young adult aged 15-24 is unemployed.