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The small country of Uruguay, wedged between its two much larger neighbors, Argentina and Brazil, is home to 3.4 million people and has been on the forefront of many innovative reforms. Uruguay ranks first in Latin America for democracy, peace, lack of corruption, e-government, and press freedoms.
Despite it’s small size, Uruguay has a unique culture and interesting achievements that have inspired Uruguayans to believe that anything’s possible. This attitude may be best epitomized by its national soccer team, which has won two World Cups, two Olympic gold medals, and 15 Copa Americas (more than any other South American country).
Besides football, Uruguay has a great quality of life and was ranked first in Latin America in democracy, peace, lack of corruption, press freedom, size of the middle class and prosperity
Top non-commodity exports to Uruguay are: cellular phones, information technology, medical equipment, chemicals, and medicines.
Uruguay offers good opportunities to serve as a test market for the region, given the small sample size, respect for the rule of law, and stable investment climate.
Uruguay’s economic base is its agricultural sector, exporting products such as meat, dairy, grains, and forestry products. 65 percent of exports are agricultural-based products. About half of all industrial production is dedicated to food processing or the refining of agricultural products. In 2018, cellulose became the number one export product. Uruguay is an attractive market for international companies. It is one of the most politically and economically stable countries in the region and has the ability to serve as a regional distribution hub through its Free Trade Zones.
Uruguay is experiencing the longest expansion in its history, with 16 years of economic growth and sucessful management of regional macroeconomic imbalances. However, Uruguay’s economic growth slowed to an annual average of 1.6% in 2018, negatively affected by a decline in international commodity prices and recessions in Argentina and Brazil — two of Uruguay’s top trading partners.
As of 2018, Uruguay’s top export destinations for its goods were (in rank order): China, Brazil, the United States and Argentina. Uruguay’s top sources of imports of goods in 2018 were China ($1.67 billion), Brazil ($1.63 billion), Argentina ($1.1 billion) and the United States ($697million). In 2018, Uruguay’s goods imports totalled $8.95 billion. Around 60 percent of the total were manufactured products such as machinery and electrical equipment, chemical products, transport equipment and foodstuffs. Between 2014 and 2018, imports fell by an annual average of 3.3 percent.
In terms of trade, Uruguay has “decoupled” from Argentina and Brazil in recent years diversifying away from its MERCOSUR partners. The country has opened to inflows of foreign direct investment from various countries over the last 15 years, reflecting greater confidence in the country’s institutional framework and economic policy. Also, Uruguay’s exports to its MERCOSUR partners have been declining since 2011 resulting in China overtaking Brazil as Uruguay’s leading export destination in 2018. The percentage of total Uruguayan exports to China increased steadily from 2011 to 2017.