Uruguay has proven to be a strong, consolidated economy. The country possesses a solid reputation among investors, and an investment-grade sovereign credit rating. The country enjoys a sound investment climate, with a strong legal system and open financial markets, resulting in a high rating for government effectiveness. Uruguay has traditionally favoured extensive state involvement in the economy and, although the Uruguayan government has carried out an economic liberalisation program, privatisation is still widely opposed, as it is in other Latin American countries. Unsurprisingly, the country’s score for regulatory quality is not as high as for effectiveness.
Given the concerns about regulatory quality, it is perhaps unsurprising that the cost of starting a business is relatively high, dampening entrepreneurship. Uruguay’s workforce is highly educated by the standards of the region, at least in terms of mass education, but the country nonetheless scores weakly on measures of innovation, limited by the low number of highly-skilled researchers working in the country. Uruguay is the top exporter of software in Latin America, but this goes little way in improving the overall level of high-tech exports.
Judged by movements in relative price levels, the domestic economy appears highly competitive. However, capital investment remains low and hinders Uruguay’s progress to greater material wealth.
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Average incomes in Uruguay are high for the region, at nearly $10,000, but this is low by global standards, and poverty thus continues to restrain wellbeing. Unemployment is also high at 10.9% of the labour force. Perhaps unsurprisingly, at these income levels, charitable giving is low, with less than 20%g of Uruguayans surveyed by the Gallup World Poll reporting that they had given to charity in the past month. This echoed by low levels of volunteering as well.
Environmental indicators are a strong point. Nearly 70%g report satisfaction with efforts to improve the environment, and nearly 90%g report satisfaction with air quality, although this is no doubt more easily achieved in a country where notable industries are agriculture and technology outsourcing.
Strong family life also helps to raise Uruguay’s liveability rank. Only 3.5%g of Uruguayans are divorced, and partially as a result, nearly 90%g report to Gallup that they have someone to rely on in times of need.
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