Introduction: Montevideo, founded by the Spanish in 1726 as a military stronghold, soon took advantage of its natural harbor to become an important commercial center. Claimed by Argentina but annexed by Brazil in 1821, Uruguay declared its independence four years later and secured its freedom in 1828 after a three-year struggle. The administrations of President Jose BATLLE in the early 20th century established widespread political, social, and economic reforms that established a statist tradition. A violent Marxist urban guerrilla movement named the Tupamaros, launched in the late 1960s, led Uruguay's president to cede control of the government to the...

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Economic Overview: Uruguay's economy is highly dependent on agriculture and the economic cycles of its close trading partners, Argentina and Brazil. Uruguay was severely affected by the crises in Brazil (1999) and Argentina (2001) and faced a painful recession in 2002-2003.

Membership of regional trading bloc Mercosur provides Uruguay with preferential trade access to the markets of Brazil, Argentina, Paraguay and Venezuela (in addition to Chile, Colombia, Ecuador, Peru and Bolivia, which have associate membership of Mercosur). However, Uruguay has expressed dissatisfaction with the trading benefits that Mercosur has provided, and has ...

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