In the first half of the twentieth century Uruguay was one of the richest countries in Latin America. Today it remains a country with a high level of human development compared with others in the region. After a long economic crisis, Uruguay has returned to being a middle-income country.
The beginning of the end of what was known as the "Switzerland of America" occurred in the late sixties as a consequence of economic stagnation and growing authoritarianism, which led to the military dictatorship (1973-1985). Its democratic project of the most recent quarter of a century converges with others in the region, but Uruguay still lacks sustained levels of economic growth. Its biggest challenge will be achieving a development model that allows the production structure to diversify, incorporate innovation and technology and create quality employment.
Uruguay is a consolidated democracy. Chartered as a presidential republic, it has a centralised administrative structure. Almost half the country's population (which totals 3.47 million) lives in the capital city, Montevideo.
After twelve years of military dictatorship, President Sanguinetti (in office 1985-1990 and again 1995-2000) managed to stabilize the country politically. In the last elections, the leftist Frente Amplio party was re-elected with 47.97% of votes. Current President José Alberto Mujica, a former Tupamaro guerrilla fighter, governs since March 1, 2010. In his investiture message he promised social spending would be one of the cornerstones of his mandate.
Mujica is the second leftist President in the country's history, having replaced the first, Tabaré Vazquez, also from the Frente Amplio party. In 2005 Vázquez broke the century-and-a-half hegemony of the Colorado and Nacional parties. However, the continuity of the left depends on its ability to meet the population's expectations. Its major challenge: to move towards reducing inequalities and promoting sustainable growth.