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1 1 (July 5, 2022)

handle is hein.crs/goveiiu0001 and id is 1 raw text is: Congressional Research Servic informing the legislitive debate since 1914 Updated July 5, 2022 Uruguay: An Overview Uruguay, a small nation of 3.6 million people, is located on the Atlantic coast of South America between Brazil and Argentina (see Figure 1). The country stands out in Latin America for its strong democratic institutions; high per capita income; and low levels of corruption, poverty, and inequality. Due to its domestic success and commitment to international engagement, Uruguay plays a more influential role in global affairs than its size might suggest. Successive U.S. Administrations have sought to work with Uruguay to address political and security challenges in the Western Hemisphere and around the world. PoliticaI and Economkc Situation Uruguay has a long democratic tradition but experienced 12 years of authoritarian rule following a 1973 coup. During the dictatorship, tens of thousands of Uruguayans were forced into political exile, 3,000-4,000 were imprisoned, and several hundred were killed or disappeared. The country restored civilian democratic governance in 1985 and analysts now consider Uruguay to be among the strongest democracies in the world. President Luis Lacalle Pou of the center-right National Party took office for a five-year term in March 2020, bringing to an end 15 consecutive years of governance by the center-left Broad Front coalition. A former legislator and the son of a former president, Lacalle Pou narrowly defeated the Broad Front's Daniel Martinez (50.8% to 49.2%) in a November 2019 runoff election. Lacalle Pou's coalition, which, in addition to his National Party, includes the centrist Colorado Party, the right-wing populist Open Town Hall party, and two smaller parties, also won majorities in both houses of the Uruguayan General Assembly; it holds 56 of 99 seats in the Chamber of Representatives and 17 of 30 seats in the Senate. Shortly after taking office, Lacalle Pou's multiparty coalition passed a far-reaching legislative package that enacted many of the market-oriented economic reforms and hard-line security policies included in the president's campaign platform. Among other changes, the legislation established a fiscal rule to limit public expenditures, made structural changes to the education system, created a new environment ministry, increased some criminal penalties, gave greater powers to the police, banned blockades that prevent the free movement of persons or goods, and prohibited labor unions from impeding workers or owners from entering businesses during strikes. The political opposition, led by the Broad Front and the national labor federation, sought to repeal portions of the law through a national referendum held in March 2022. The referendum captured nearly 49% of valid votes but fell short of the absolute majority needed to repeal the reforms. The Lacalle Pou administration has been widely credited for its relatively effective response to the Coronavirus Disease 2019 (COVID-19) pandemic, which helped Uruguay weather the health and economic effects of the pandemic better than many other South American countries. Uruguay successfully contained the spread of the virus for much of 2020 but experienced a significant wave of cases and deaths during the first half of 2021, before the country's vaccination campaign had reached a majority of the population. According to Johns Hopkins University, as of July 1, 2022, Uruguay had recorded more than 957,000 cases and 7,300 COVID-19 deaths (211 per 100,000 residents), and more than 83% of Uruguay's population was fully vaccinated. Figure I. Uruguay at a Glance Sources: CRS Graphics, Instituto Nacional de Estadistica de Uruguay, Latinobar6metro, International Monetary Fund, and Trade Data Monitor. The pandemic also contributed to a steep economic downturn initially. The Uruguayan economy contracted by 6.1% in 2020, pushing the poverty rate up from 8.8% to 11.6%, according to government statistics. The Uruguayan government enacted an emergency support package worth about 2.7% of gross domestic product (GDP) that included tax cuts, enhanced unemployment insurance, and income transfers to help businesses and households through the downturn. That policy response and Uruguay's successful vaccination campaign supported economic recovery in 2021, with GDP growth of 4.4%. The International Monetary Fund forecasts 3.9% economic growth for Uruguay in 2022, driven by strong international demand and high prices for the country's meat and grain exports. Tourism has yet to return to pre-pandemic levels, however, and disruptions in global fertilizer markets stemming from the Russia-Ukraine war could hamper growth. Uruguay is also contending with relatively high inflation (9.4% in the 12 months through May 2022), which is weighing on consumers and may be taking a toll on the

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