The Economic Crisis 1955–1970

Abstract

The growth of the Uruguayan economy in the post-war period might have appeared, by the mid-1950s, to give every cause for satisfaction. The development of Uruguay had been based since the last century on world demand for products which Uruguay was by nature fitted to produce at low cost—meat, wool and other animal products—and the prosperity of the country was the result of the high ratio of the value of exports to population. In 1956, when per capita income reached its maximum value, Uruguay enjoyed the highest per capita income of any Latin American country,¹ and it is likely that it had held this position throughout the first half of this century. Moreover, the post-war decade of rapid growth saw substantial modifications to the vulnerable model of export-led growth which broadly fits the Uruguayan economy before 1930. The period 1945–54 was above all a decade of rapid industrial growth, during which the product of manufacturing industry averaged an annual growth rate of 6 per cent.² High export values were achieved during the period, but this resulted from a sharp rise in export prices during the Korean War period rather than an increase in exported production. The annual rate of growth of per capita incomes during 1945–55 of about 3.4 per cent³ was achieved on the basis of the domestic market.

That Uruguay should have moved forward is natural, because all nations progress, and it would be shocking if it, or any other society, should find itself at the same level as sixteen years ago. (Julio Martinez Lamas, Riqueza y Pobreza del Uruguay [1930] p. 194.)