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Uruguay The Export Model
After several decades of arrested development,
Uruguay's
economy underwent a series of important changes during the
latter
half of the 1800s. The consolidation of political control
by the
Colorado Party (Partido Colorado) and the division of the
control
of the departments in 1872 spelled the end of almost
constant
warfare and meant that the departments of Uruguay were
finally
united as one nation. Internal barriers to trade were
removed,
and the issuance of a national currency (the peso) in 1862
favored commercial activity. Political stability also
allowed
increased foreign involvement in the economy and
encouraged
technological advances. The framework for Uruguay's
primaryproduct export economy, which supplied food and basic
inputs to
Europe's dynamic industrial sector, was erected during
this
period.
Livestock production changed in several ways as Uruguay
adjusted to the export model. First, meat-packing
technology was
introduced in the mid-1860s, allowing canning of meat for
export.
Until then, beef was preserved only in a dry, salted form
(tasajo), which appealed to a narrow export market
(principally Brazil and Cuba, where it was fed to slave
laborers). Second, livestock production was diversified
when
sheep ranching expanded rapidly, reflecting the British
textile
industry's demand for imported wool. After 1870 Uruguay
had more
sheep than cattle, largely because of an influx of sheep
ranchers
from France and Britain. A third change in the livestock
sector
came about in the 1870s with the introduction of barbed
wire. For
the first time, the boundaries of large estancias
were
marked off precisely, decreasing the number of ranch hands
needed
to watch over herds and driving many subsistence farmers
off
lands on the margins of large estates. Finally, the
construction
of railroad lines and telegraph networks provided the
infrastructure that linked rural Uruguay to the thriving
port of
Montevideo.
These changes in the structure of the economy paved the
way
for a substantial increase in export earnings while
reinforcing
the importance of livestock production. In 1876 Uruguay
had a
positive balance of trade for the first time, and its
export
volume more than doubled over the next decade. Exports of
wool
increased dramatically, matching the value of leather
exports by
1884. Residents of Montevideo were said to gauge the
country's
prosperity by counting the stacks of cowhides and bales of
wool
waiting to be loaded aboard ships. After 1900 the ability
to ship
frozen meat to Europe and the United States transformed
the beef
industry, added to Uruguayan export earnings as world
demand for
beef grew, and raised the importance of cattle production.
The nation's rising prosperity at the turn of the
twentieth
century rested firmly on rural livestock production.
Paradoxically, however, it was in Montevideo that the most
dramatic demographic and economic effects of growth were
felt.
The city's population increased, mainly because several
waves of
immigrants arrived from Europe. Most of these immigrants
came
from urban areas of Italy and Spain, so it was natural
that they
tended to settle in Uruguay's urban center, where jobs
were
available. At the same time, the city's population was
increasing
because of the arrival of displaced laborers from the
Uruguayan
countryside. Both natives and immigrants made up a growing
pool
of labor for Montevideo's small but dynamic industries,
many of
which were owned by foreigners. Using mostly artisanal
techniques, the city's workshops began to supply the home
market
with a variety of goods, such as footwear, clothing, wine,
tobacco, paper, furniture, and construction materials.
Data as of December 1990
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