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                     Key Economic Indicators
       (Millions of U.S. dollars unless otherwise noted) 5/

                                      1992      1993    1994 1/

Income, Production and Employment:

Real GDP (1983 prices) 2/            6,802     6,903     7,042
Real GDP Growth (pct)                  7.7       1.5       2.0
GDP (at current prices) 2/        11,676.8  13,144.9  15,034.5
By Sector:
  Agriculture                      1.164.9   1.159.4   1,341.2
  Energy/Water                       283.6     336.3     374.7
  Manufacturing                    2,687.9   2,471.3   2,761.3
  Construction                       566.6     748.4     887.6
  Rents                            1,667.6   2,194.4   2,544.4
  Financial Services               1,153.0   1,267.5   1,459.6
  Other Services                   3,056.2   3.525.6   4,008.9
  Government/Health/Education      1,097.0   1,442.0   1,656.8
  Net Exports of Goods & Services     99.0    -155.4    -161.7
Real Per Capita GDP
  (1983 prices/USD)                2,172,8   2,192.3   2,223.4
Labor Force (000s)                   1,382     1,395     1,409
Unemployment Rate (pct.)               9.0       8.3       9.0

Money and Prices:  (annual percentage growth)

Money Supply (M2)                     50.9      49.7      45.3
Base Interest Rate 3/                 50.1      42.7      45.6
Personal Saving Rate 3/               24.5      17.2      20.1
Retail Inflation                      58.9      52.9      41.0
Wholesale Inflation                   46.9      31.1      35.0
Consumer Price Index                  58.9      52.9      41.0
Exchange Rate (USD/New peso)
  Interbank Floating Selling Rate     39.9      26.9      34.3

Balance of Payments and Trade:

Total Exports (FOB) 4/             1,702.5   1,645.3   1,780.0
  Exports to U.S.                    177.8     148.8     160.0
Total Imports (CIF) 4/             2,045.1   2,324.4   2,460.0
  Imports from U.S.                  203.2     222.6     245.0
Aid from U.S.                          1.2       1.2       1.0
Aid from Other Countries               N/A       N/A       N/A
External Public Debt                 4,136     4,291     4,430
Debt Service Payments (paid)           620       645       665
Gold and FOREX Reserves (net)        946.8   1,201.8   1,290.0
Trade Balance 4/                    -342.6    -679.1    -680.0
  Trade Balance with U.S.            -25.4     -73.8     -85.0

N/A--Not available.

1/ 1994 figures are all estimates based on available monthly
data in October 1994.
2/ GDP at producer price.
3/ Figures are actual, average annual interest rates, not
changes in them.
4/ Merchandise trade.
5/ Data in Uruguayan pesos was converted into U.S. dollars at
the average interbank selling exchange rate for each year.

1.  General Policy Framework

    Uruguay has a small, relatively open economy.  The
historical basis of the economy has been agriculture,
particularly livestock production.  Agriculture remains
important both directly (wool and rice) and indirectly for
inputs for other sectors (textiles, leather and meat). 
Industry, which diversified beyond agro-industry into chemicals
and consumer goods for local consumption, has declined in the
face of greater competition, and now accounts for 21% of GDP. 
Services, particularly tourism and financial services, now
dominate the economy, accounting for over 60% of GDP.  Banking
benefits from Uruguay's open financial system.

    The Government has been relatively successful in reducing
its fiscal deficit from 7.4 percent in 1989 to 1.6 percent in
1993.  Principal sources of the deficit are losses by the
Central Bank on nonperforming loans purchased from private
banks, foreign debt payments and transfers to the social
security system.  Inflation peaked at 129 percent in 1990, and
is expected to fall to 41 percent in 1994.

    Seeking to reverse a long-term economic deterioration and
to prepare itself for the formation of the Southern Common
Market (MERCOSUR) comprising Brazil, Argentina, Uruguay and
Paraguay, the Government is attempting to implement a program
of economic reform.  Major elements of the Government program
are privatization of state enterprises, financial sector reform
and reform of the costly social security system.  The progress
of reform, however, has been slow.

    Uruguay is the beneficiary of large inflows of capital,
principally from neighboring Brazil and Argentina.  The
Government has been able to finance a substantial portion of
its deficit through the issuance of dollar-denominated treasury
bills.  The Central Bank of Uruguay uses the adjustment of
reserve requirements as the main tool to control the money
supply.  However, the lack of instruments to neutralize capital
inflows makes control of the money supply difficult.

    On April 1994 the IMF approved the Uruguayan government
economic program for 1994 which will be subject to the IMF
staff monitoring procedure.  Uruguay has ratified the Uruguay
Round trade agreements and became a founding member of the
World Trade Organization (WTO) on January 1, 1995. 

2.  Exchange Rate Policy

    The Uruguayan government allows the peso to float freely
against the dollar within a declining 7 percent band.  The band
currently declines by 2 percent per month.  Up to mid August
1994, the Central Bank regularly bought dollars to keep the
peso value from rising above the band.  For a period 
thereafter, the value of the dollar was floating close to the
top of the band pushed by high liquidity and expectation of
formal devaluation.  By the end of October, the speculative
burst ended and the Central Bank was again buying dollars.  The
lag between devaluation and inflation decreased from about 21
percentage points in 1993 to 16 percentage points for the
twelve-month period ended October 1994 continuing to make
Uruguayan exports less competitive and imports more attractive.

    Uruguay has no foreign exchange controls.  The peso is
freely convertible into dollars for any transaction and much of
the economy is dollarized.

3.  Structural Policies

    Price controls are limited to a small set of products and
services for public consumption, such as bread, milk, passenger
transportation, utilities and fuels.  The Government relies
heavily on consumption taxes (value-added and excise) and taxes
on foreign trade (export taxes and tariffs) for its general
revenues.  A substantial social security tax, sometimes equal
to 50% of the base wage rate, is assessed on workers and
employers.  The top tariff rate was lowered from 24 percent to
20 percent in January 1 1993.  This has a positive effect on
U.S. exports.  Tariffs for products from Mercosur countries
will reach zero on January 1, 1995.  There are no plans for
further reductions of tariffs on products from third countries
at this time.

4.  Debt Management Policies

    Uruguay is a heavily-indebted middle-income country.  As of
March 1994, its total external debt was $7.8 billion, almost
$300 million over the amount in March 1993.  Of this amount,
$4.4 billion was public sector debt and $3.4 billion
represented debts of the private sector.  The public sector
external debt included 1.6 billion of dollar-denominated
Uruguayan government bills and bonds, $269 million of foreign
currency deposits of nonresidents, $2 billion of long term
loans of the nonfinancial public sector and $158 million of
suppliers credits.  The balance, amounting to $373 million,
represents liabilities reserves and other credits of the
Government of Uruguay financial sector.  International reserves
of the public sector banking system amounted to $2.5 billion,
resulting in a net public sector foreign debt of $1.9 billion.

    The $3.4 billion of the private sector foreign debt were
primarily made up of $2 billion of foreign currency deposits by
nonresidents and $359 million of supplier credits.  The balance
amounting to $1 billion represented liability reserves of the
private banks.  International reserves of the private sector
banks amounted to $3 billion resulting in a net private sector
foreign debt of $452 million.

    The debt service in 1992 was $750 million, equivalent to
45.6 percent of total merchandise exports, 26.7 percent of
combined merchandise and service exports and 5.7 percent of GDP.

5.  Significant Barriers to U.S. Exports

    Certain imports require special licenses or customs
documents.  Among these are drugs, certain medical equipment
and chemicals, firearms, radioactive materials, fertilizers,
vegetable materials, frozen embryos, livestock, bull semen,
anabolics, sugar, seeds, hormones, meat and vehicles.  To
protect Uruguay's important livestock industry, imports of bull
semen and embryos also face certain numerical limitations and
must comply with animal health requirements, a process which
can take years.  Bureaucratic delays also add to the cost of
imports, although importers report that a "debureaucratization"
commission has improved matters.

    Few significant restrictions exist in services.  U.S. banks
continue to be very active in off-shore banking.  There are no
significant restrictions on professional services such as law,
medicine or accounting.  Similarly, travel and ticketing
services are unrestricted.  A law allowing foreign companies to
offer insurance coverage in Uruguay was passed in October, 1993.

    There have been significant limitations on foreign equity
participation in certain sectors of the economy.  Investment in
areas regarded as strategic require Government authorization. 
These include electricity, hydrocarbons, banking and finance,
railroads, strategic minerals, telecommunications, and the
press.  Uruguay has long owned and operated state monopolies in
petroleum, rail freight, telephone service, and port
administration.  Passage of port reform legislation in April
1992 allowed for privatization of various port services. 
Recently approved legislation also allows for the private
generation of electric power and the privatization of the
state-owned gas company.  Cellular telecommunications are
operated by both private consortiums and the state-owned phone
company.  Privatization of the telephone company was rejected
in a referendum in 1992.

    Government procurement practices are well-defined,
transparent and closely followed.  Tenders are generally open
to all bidders, foreign or domestic.  In the past year,
however, several important government bids appeared to have
been awarded to non U.S. companies based on other than
objective criteria such as price and quality.  A Government
decree also establishes that in conditions of equal quality or
adequacy to the function, domestic products will have
preference over foreign ones.  Among foreign bidders,
preference will be given to those who offer to purchase
Uruguayan products.  The Government favors local bidders even
if their price is up to 10 percent higher.  Uruguay is not a
signatory to the GATT government procurement code.

    Following a recent reduction in the top rate, Uruguay's
tariff structure now varies between 0 and 20 percent.  Imports
from MERCOSUR member countries (Brazil, Argentina, and
Paraguay) enjoy significantly lower rates and will become 0
percent on most products as of January 1, 1995.  The only
exemptions to tariff regulations, in the context of
anti-dumping legislation, are reference prices and minimum
export prices, fixed in relation to international levels and in
line with commitments assumed under GATT.  These are applied to
neutralize unfair trade practices which threaten to damage 
national production activity or delay the development of such
activities and are primarily directed at Argentina and Brazil. 
Minimum export prices are scheduled to be phased out in 1995.

6.  Export Subsidies Policies

    The Government has provided a 9 percent subsidy to wool
fabric and apparel using funds from a tax on greasy and washed
wool exports.  This subsidy will be totally eliminated by May
1, 1995.  Uruguay is a signatory of the GATT subsidies code.

7.  Protection of U.S. Intellectual Property

    The Government of Uruguay recognizes intellectual property
rights in a number of areas, and there is no discrimination
against foreign companies seeking to register intellectual
property rights.  Uruguay has generally sufficient laws to
protect most intellectual property rights except with regard to
new technology and pharmaceuticals.  However, enforcement of
these laws is weak in certain areas such as software, due in
part to the fact that little of the domestic industry relies on
intellectual property protection.  Uruguay has been generally
supportive of efforts to strengthen the rules governing
intellectual property protection in international fora such as
the World Intellectual Property Organization (WIPO) and the
Uruguay Round of GATT.

    The Government does not discriminate between foreign and
domestic patent holders.  Owners and assignees of foreign
patents may obtain confirmation of patents in Uruguay, provided
application is made within 3 years of registration in country
of origin.  Confirmed patents are protected for 10 years, less
the period of protection already enjoyed in the country of
origin.  Compulsory licensing is not practiced.  Medicines and
chemical products are not patentable, although production
processes for such products are patentable.  Although no
figures are available, the lack of patent protection for
pharmaceuticals has had a marked effect on U.S. trade and
investment in the sector.

    Foreign trademarks may be registered in Uruguay and receive
the same protection as domestic trademarks.  Protection is
afforded for 10 years initially, renewable indefinitely.

    Uruguay affords copyright protection to, inter alia, books,
records, videos, and software.  Despite the legal protection,
enforcement of copyright protection for software is still weak
and pirating of software is substantial.  Software suppliers
have estimated that losses due to pirating could amount to $10
million.  There is also considerable pirating of videotapes and
cassettes.  The International Intellectual Property Rights
Alliance estimates trade losses from copyright piracy of motion
pictures, sound recordings and musical compositions, and books
at $9.9 million.

8.  Worker Rights

    a.  The Right of Association

    The Constitution guarantees the right of workers to
organize freely and encourages the formation of unions.  Labor
unions are independent of government or political party control.

    b.  The Right to Organize and Bargain Collectively

    Under a policy instituted in March 1992, collective
bargaining takes place on a plant-wide or sector-wide basis,
with or without government mediation, as the parties wish.

    c.  Prohibition of Forced or Compulsory Labor

    Forced or compulsory labor is prohibited by law and in
practice and there is no evidence of its existence.

    d.  Minimum Age for Employment of Children

    Children as young as 12 may be employed if they have a work
permit.  Children under the age of 18 may not perform
dangerous, fatiguing, or night work, apart from domestic

    e.  Acceptable Conditions of Work

    There is a legislated minimum wage.  The standard work week
is 48 hours for six days, with overtime compensation for work
in excess of 48 hours.  Workers are protected by health and
safety standards, which appear to be adhered to in practice.

    f.  Rights in Sectors with U.S. Investment

    Workers in sectors in which there is U.S. investment are
provided the same protection as other workers.  In many cases,
the wages and working conditions for those in U.S.-affiliated
industries appear to be better than average.

  Extent of U.S. Investment in Selected Industries.--U.S. Direct
Investment Position Abroad on an Historical Cost Basis--1993

                    (Millions of U.S. dollars)
              Category                          Amount          

Petroleum                                               8
Total Manufacturing                                    73
  Food & Kindred Products                   (1)
  Chemicals and Allied Products              -1
  Metals, Primary & Fabricated                2
  Machinery, except Electrical                0
  Electric & Electronic Equipment             0
  Transportation Equipment                    0
  Other Manufacturing                       (1)
Wholesale Trade                                       111
Banking                                               (1)
Finance/Insurance/Real Estate                          25
Services                                              (1)
Other Industries                                        0
TOTAL ALL INDUSTRIES                                  316      

(1) Suppressed to avoid disclosing data of individual companies

Source: U.S. Department of Commerce, Bureau of Economic

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