Uruguay - Current economic position and prospects

RETURNRESTRICTED 8~ E* S U R II C T . m-ie n-__ raf Renort N 0. WH-106a WITHIN I ONE WEEK This report was prepared for use within the Bank. It may not be published nor may it be quotea as representing the Bank s views. I he Bank accepts no responsibility for the accuracy or completeness of the contents of the report. Ir TIT /1 T r% np s T:b T I NTER AT1INAL BA ILFR RECO STR01S11U V AIND vDEVELOPr ENTiv C TTUD MT'T TWCAMOhd?TCP tDTTTAMT AND PRUSECTS OF URUGUAY June 21, 1961 Department of Operations Western Hemisphere CURRENCY EQUIVALENTS 1 US$ = 11 Pesos 1 Peso = 9 US cents 1 million Pesos = $90, 000 1Å ff l A,t.ga3 ART G A S + A T Sait orr u T A C UAR E M B T- a Isabel( D RA Z N 0 F cy Bnto TREINTA Y TRES tr / 0 SOR IA NO *Tr.nidad o- Z l u Odo6 ez- DolORes rLO FL0 R l D ascao4 c - mC L N A S N i \ 0 NLo S0 A T ANN PO*TCA MAP 1 A U R O ] iC L or s r . M ETEL ic o~4 ~C los / V )~~5 .5 0 R Z o OTHER IMPRTN C TES- AND-Y -T TOWNS. ....... NËRNT O A ODARES.....- d... uA D E A T E N AFOU D R E .. .. ...- - - - - -c . * Uni ed Sta es Tanfe Inmsson~Wc96 F OLI ~ o é7 IN A m ~ 0 b l 4 - 3CALIEO OFMIt SCALELVUL +F12LTR CAPITALS O DEPARTMENTS ..........A... + Unilled 5aesTr fConmissäw7~L le¥v~4 TABLE OF CONTENTS Page No. BASIC DATA................................................... SUMMARY AND CONCLUSIONS....................................... i-ii i. Description of Uruguay................................ 1 Population and Resources........................ 1 Economic Structure............................. 1 Social Structure.......... .... . ...... ........ 2 Institutional Organization...................... 3 Political and Social Conditions.................. . II. Development of the Uruguayan Economv ................. Broad Trends .......... e............. ........... The Financial Främework-------............ 6 Main Economic Secos........................... 7 TTT Cmrrent. Eornnmi iiio.n. ........ -10 Develoents Before 1960.......................... 10 The 1959 Economic Reform...........................13 Developments During 1960...................... 1) V. Economic Prospects................................... 16 V. r-A +~+- ne17 . Cr d t r hi e .............................................1 S TArTITI CV AL APPEND X T+.. . ... . . . .•••••••.... . ... ..• .- STkI.3ILCL i~PiI!IX ......... ........................... BASIC DATA Population (1959): 2.6 million Area: 72,000 sq. miles Gross Domestic Product No estimate available. Probably US$ 400 per person Balance of Payments (million. US) 1956 1959 Current Account - 1 - 51 Exports 211 98 Imports 206 170 Services (net) - 6 21 Capital Account (net) 18 2 Errors and Omissions - 1 15 Official Reserves and short-term caoital movements 16 - 3h Government Finance (1959) (million pesos) Central Government Revenue 899 Central Government Expenditures 842 Surnlus 58 Noney and Prices Money Supply, October 1960 Ps. 3,028 million up 40% since December 1959 Cost of Living: Up 34% during 1960 External Public Debt (June 30, 1960) Total US$ 134.5 million Bonds 60.8 U Gorn 1 meant ln.s12.0 US Government loans 12.0 OtherU.3 BASIC DATA Population (1959): 2.6 million Area: 72,000 sq. miles Gross Domestic Product No estimate available. Probably US$ 400 per person Balance of Payments (million. US$) 1956 1959 Current Account - 1 - 51 Exports 211 98 Imports 206 170 Services (net) - 6 21 Capital Account (net) 18 2 Errors and Omissions - 1 15 Official Reserves and short-term capital movements 16 -3 Government Finance (1959) (million pesos) ri=ntral GovernmPnt RnvAnup 899 Central Government Expenditures 842 Surnl us Monny, annH Prins Money Siunly O b+.nhr1960Ar Ds ' 0A million up 40% since December 1959 Cost of Living: Up 34% during 1960 External Public Debt (June 30, 1960) Total US$ 134.5 million Bonds 60.8 IBDEW loanls V6L. 4 US Government loans 12.0 uler U. SUMARY AND CO1'CLUSIONS 1. Uruguay, the smallest of the South American Republics, is endowed with an aipLL li1".uLU1U LLPPUUULUU6.U mllion0r. Othler ca racteristics of the country include a high level of per capita income, a long tration of poltical stability, and a social structure wTh a high degree of vertical mobility, where there are no extremes of poverty and where social wel- fare has always been an important objective of government policy. 2. The country is an internationally important exporter of' pastoral and agricultural commodities - mainly wool, mutton, beef, hides and skins, as: well as grains such as corn, wheat and linseed. For many years Uruguay's per capita exports have been higher than those of most latin American Republics. Yet the country's economy is well diversified and the manufacturing industries employ only a slightly smaller proportion of the total gainful population than agri- culture. The service industries provide nearly 507 of the gainful employment. The main industrial activity is the processing of food products, but other industries also have attained a comparatively high degree of development. Tex- tile manufacturing ranks second and one of its products (wool tops) is an important export article. On the basis of employment, building construction follows in importance. But industrial development extends also to rubber, chemicalS, medicinal products, metals and metal processing, petroleum refining and many other industries which, together, account for about 52% of total manu-. facturing employment. 3. Except for the last few years, the Uruguayan economy has tradition- ally operated within a framework of conservative financial and fiscal manape- ment. As a result the economy has enjoyed considerable internal and external stability, 4. During the Second World War and the post-war years the UrugDavan economy went through a period of expansion. Increasing external demand and higher prices for the countrv's exDort nroducts lifted rpnorts from milin in 1938 to an average of 242 million in 1950-53. During this period indistrial development was also rapid. The post-war prosDerity. prolonged by the Ko-rean War boom, continued until 19%6. Since then, with the exception of a brief upsurge in 1956 on the wake of the Suez crisis. the economy of the countrr h been losing ground under a succession of balance of payments deficits and strong inflationary tendencies. 5. The recent deterioration in Pnonomi conditJons rasilted fma f:%i.-n nation of factors which include lower prices for export commodities, government policies which discourased agricultural proluction and exports an,o the a three years, unusually severe weather conditions which greatly reduced agricul- tural outnut. Tnflation was Inaealy +.he ect of n ,a---s spiral -! t I 1e to an expansion of credit to the private sector. 6. At the end of 1959 the Uruguayan Government undertook a radical ex- nhanop and monetary rofo and naoped a ne I pi -T recognized the de facto devaluation of the peso, eliminated the complex system of prfreta eca_erts,iprt controls and Jmpiort subs"-ezan -- sta- ishUed a sUig e nUxa wUaLeL e1ui CrL0- lished a single exchange market with a fluctuating rate. Credit expansiorbea to be controlled and, by the end of 1960 a new budget, incorporating a profound tax reform, had been approved by Congress. Simultaneously ivh the adoption of the economic reform program the Government began consid- eration of a list of public investment projects designed to strengthen the productive capacity of the country and to counteract the possible depres- sive effects which it was feared the new monetary and credit policies wouli have. 7. Although the change in government policies occurred at the end of 1959, and important measures were adopted only later, developments during 1960 alroady show the beneficial effects of the new policies. By the-end of 1960 there were indications that inflationary pressures were slackening, that the international accounts were improving and that the agricultural sector, particularly, was reacting to the more favorable exchange rates brought abdout by the exchange reform. Still, the process of readjustment has to run its course and the effects of some measures such as the adoption of the new budget have not made themselves felt as yet. 8. A prompt return to normal levels of exports, internal stability and the consequent disappearance of price distortions and production bottle- necks, and the implementation of a sound program of public investment should result in an expansion of the productive basis of the country and bring about a period of renewed economic growth. 9. Uruguay's external public debt ($13ho. million) is largely in the form of long-term publicly-issued bonds (45%) and IBRD loans (46). The balance is in U. S.. Government crpiits. The total sr-inp on +.hi bh+. will require approximately 911 million a year until 1970. This amount represents M4 of' estimated ePonrts. in IQOI nnrl on +.Ilr hq.qi.c elf' i1- exports, somewhat less than 5% in 1965. 10. Assuming the continuation of policies conducive to the growth of the exp,ort sector, Urga-a er, xenal obLigations greatecr than it now has. But to carry out an extensive list of public investment projects whichl t.hp Ifmiunn Go-v"ezren is presntliOr li ing on a scale that, barring a radical improvement in export prospects, and in the light of the observations on the public investment needs and officia:L.-L pln,cnandMnApni , untiV l a wel-,thoWUghtI oUt l-LLt,erm public investment program can be prepared, external borrowing should be pu mL U s ly t finance obviously high priorty projects. , 3rno 'rr) rmTAroT I-% TTriTTOTTTAV Population and Resources 1. Uruguay, the smallest of the South American republics (72,000 square miles), is only about 1/5Oth the area of Brazil and /Ith- the area of Argentina, its closest neighbors. Uruguay's territory is largely a gently undulating natural grassland devoid or pronounced features such as forests or mountains and practically all of it is easily accessible and utilized. Soils are fair to good although some of its mineral nutrients, particularly phosphates, have been depleted during centuries of grazing. The climate, except for irregular periods of drought seldom exceeding two months,is little short of ideal. Temperatures are moderate and the normal annual rainfall is about 4O inches (1,000 mm.), distributed fairly evenly throughout the year. Mineral resources appear to be limited. Hoiwever, some iron deposits have been found in the Department of Florida (Valentines) and the Uruguayan Geological Institute is presently making a survey to determine their extent and quality. 2. The population of Uruguay is estimated at about 2.6 million. Since natural demographic growth has been very low and immigration prac- tically came to a standstill in the 1930's, the population of the country has increased at the low rate of only 1.h% per year over the last thirty years. Economic Structure 3. Urueuav's standard of livine has. for many years. been compa- ratively high. Per capita income may be estimated to amount currently to )t00 ner year. Thp resonrce ha.; has made the country rate an internationally important producer and exporter of agricultural and pas- toral nnmmr3itiAs_hnt. its. economyn is.elqvrsfe n thea Ynufi-Pn turing and service industries occupy an important place as sources of emplvment.and income. f n+4 A 1+ --4- estimates indicate that manufacturing accounts for only a slightly smaller nronortAnn on if ah gainful moynnmn+. +.han grieunl+Irnl and cattl, raising (25% as against 28%), while the service industries provide approx- ima _l y 1,71/ nf omnIivmant.- T:M+.hin Thm -n"-irnny"r m-+Afrq4+-Ce chnn nA' ^nf+ 'I raising are more important than agricultural crops. Industrial exports rer sn er-.,, r,- of tlm toal ana. Lfd amon th.llW100 IJ.J. +-- are. +I_ !Ij0. item. The actual contribution of the various economic activities to the that have been prepared do not offer any kind of breakdown of the ifLQ1UL br±d±_ dCt.,LViL .L 1 alr,t 1~ W -t:LULVC _L.L _L ;k I LI ML w UUJU .L food processing, as might be expected, is the most important one, other industries have also aita'ned a comruparativel- high dgree uof development. The manufacture of t3tiles ranks second and one of - 2 - its products (wool tops) is an important export article. In terms of employment, building construction ranks as the third industry. But industrial development extends also to industries such as rubber, chemicals, medicinal products, metals and metal processing, petroleum refining and many others which in 1958 accounted for 52% of total manufacturing employment. 5. The economy of Uruguay is greatly influenced by a large urban nucleus, the capital city of Montevideo, and a heavy concentration of industrial, commercial and administrative services around this nucleus. Montevideo accounts for approximately 35% of the total population of the country and for 75% of the manufacturing activities (as measured by emloyment and value of output). 6. Notwithstanding the diversification of the Uruguavan economy, international trade is basic to it. Over the past ten years commodity exoorts have fluctuated around the A200 million mark. thus giving Uruguay a level of per capita exports of $85, nearly twice as high as that of Latin America as a whole and exceeded only by Venezuela and Cuba. Uruguay exports are directed mainly to Western Eurone (N6o in 199_ tn the Tnited States and Canada (121) and to the United Kingdom (9%). Exports to other Latin American countries in rncent vair have rPnrP.inted qomewhat over Iln of the total. On the import side purchases from other Latin American 'nnntria-n mminl Vans7eniol -vnai nrl Iirqnin T h Yv - Pten+Iv represented over 25% of total imports. During the past three years gross e~ e cip+ 4',,m ~ + o4-+ +,-.Aa have a n+a +o aver 10% nf' +h value commodity exports. 7. The nature of Uruguay's commodity exports, subject to the J-I41, _LU 0±Ili U .±SIL L CIQ±A~U01±O, intro ues aLI eLementiL 0.L11 l uCL±L UY in the economy of the country. During the post-war period this instUbU.L.iy has been accentuated by econOmic anu political uevelop- ments in Argentina, an important trading partner, and by internal ~0UL0I~.LL ~J0±I.± VLIL Il 1 J. . 1~.±IJu .L ~. U -Lull1 Wit; li0ildtl U_L0F0.d-IL U0± wool clips and with beef exports. The degree of instability is shown b-)y theIC fct thlat O±Li;t -Y:;)L yearL.-- tyear_ f_lucUaULtion in export earnings have averaged 20% per year. Thus the 1953 value of _x - rI^ X_ -*% ,, .- r,r'r -- - n - ' -l f I- exports eXceeueu 0au 0. ID6 Uy U/b; in -LY( anu Ly)Y, On ine other hand, exchange receipts from exports declined from their previous year levels by 4Uo and 3U70, respectively. 0oclal O"ructure 0. Perhaps the two most important instutional factors influencing the socio-economic organization of Uruguay are an all- inclusive system of social legislation, the product or an evolution which started in the early 1900's, and the extraordinary extension of the state services reflected in the unusual size of the public sector. 9. Social legislation evolved out of the organized activities of labor groups and very often confirmed situations of fact. A characteristic of this legislation is its ad hoc nature, shown by the fact that it is embodied in over 160 laws passed between 1896 and 1956. Retirement and pension benefits were first provided to public school teachers in 1896 and to public employees in 1904. A series of laws have since extended retirement benefits to every employed or self-employed person. Other social benefits include old age pensions to all indigent persons over 60 and to all invalids, dismissal pay (equivalent to one month's salary per year of service up to a total of six months), accident and health insurance, etc, Institutional Organization 10. Although the Uruguayan constitution is centralist, institutional evolution has moved toward decentralization of public power and state activities through the creation of state entities which operate with a high degree of autonomy. These entities fall into three broad categories. viz.. "autonomous enterprises". 'decentralized public service industries" and "semi-'public bodies". 11. Autonomous enterprises operate within the industrial domain of the state with a maximum of indenendence from central government influence. Control is limited to the auditing of accounts by an autonomous body -- the Announts Conrt (Tribunal de Cuentas. They are administered by bi-partisan boards of directors of which the marinity is annninted hv mpmhr of the Nationnl rninnil) of (InvPrnmPnt (Executive) representing the majority party in power and the rest h the minrit:y nrty. Diretors can be removed by the Exnctive only under exceptional circumstances and then with the approval of +nn qen"+n bodies are restricted by budgetary considerations insofar as part but otherwise their statutes allow them a high degree of freedom in o..L. U UJ.0 L.o a soult u ts system ble VaLr Vd.U0ou LUIItUn VJ ULLFZ public sector operate with very little, if any, coordination in regard to overall public Po-Li. uu UUti_ves, andU Ute Z5tate, dalthUgh)U massive as an aggregate of units, is far from being an all-powerful, centural-direc-ULLUtdU et:.UyD To at -glag etetI Ute systeUm JUst described resulted from the desire to maintain political equilibrium by limiting the discretionary power of the central government and to attain a measure of operating efficiency by removing political influences from the state industrial activities. 14. The numoer of public employees (180,000 or 1087% of the active population in 1954) provides a good indication of the scope of state action in Uruguay. Approximately 6,Ou persons, or 370 of the total, are occupied in purely commercial activities carried out by official enterprises such as the National Railways Administration, the National Packing House, the National Printing House, the National Administration for Cement, Alcohol and Petroleum and the Telephones and Electric Power Administration. State industrial enterprises accounted for 18% of all industrial employment and 16% of the total value of industrial output in 1958. Political and Social Conditions 15. Any description of Uruguay's socio-economic structure would be incomplete without reference to the country's traditional political stability and to its relative freedom from arave social problems. Political stability goes back at least 50 years, and, consequently, the tradition of regular constitutional change of government and of civilian control of public affairs is well engrained, Social problems are not pressing and even the active agitation of nolitically conscious labor groups for a greater share of the national output is conducted within leal an ronltitutiona channels which allow fredom of expression to all political parties. 16. Although no statistical data can be brought to bear on the questfion ofr incomern dIist.ribuioen in Uruguay,i it. is2 appareInt. thatq+ the condition of high average per capita income which the country enjoys no extremes of poverty prevail among the lower income groups. This to the extensive social legislation referred to above. The industry, commerce and service activities around it have also faciltae vetcaI moilt abewnvriusoial and econici-L groups, and led to the rise of a large and politically important * -1 _in n .t. .. .! l MluuJ_e C-LaCs. Iis class iUludes a sUbsatlial numUr 01 retired persons and pensioners (260,000 or the equivalent of 25% of the labor poverty extremes, the absence of chronic unemployment and an educational systue wic'n, alunoug in need of expnUii ulu iprovement, allows free access to primary, secondary and university education, go a long way t:ward e-:plaining the high degree of political stability and social peace which has been characteristic of Uruguay. !I. DEVELUIENT C' THE URUUUAIAN EUUNUrI Broad Trends 17. Uruguay's pattern of economic development has followed that of most countries dependent on the export of a few basic primary commodities. For several decades until about 1920 Uruguay's exports, composed mainly of wool, mutton, beef, hides and skins and agricultural products such as corn, wheat and linseed, increased - 5- ranidlv (from 391 million in 1901-05 to 8113 million in 1916-20. i.e., at a compound rate of over 8% per year) thus providing a driving force for eonomic growth- Trade exnansion stopoed during the 1920ts when the value of exports remained below the peak already attained. Tt averaoAd ARq million a vpar_ Under the imnant of the world depression the dollar value of trade declined by about 40% in the 1i A T-nA- arlamn a-,C ,n +,n wn4,n -Vi'a~nw4r rns1 which also greatly slowed down during the 1920's and 1930's. Yet L11 V'i .L CL L.Llr PJt-L.Lt'.A UL _ ~L. J V-LVU VJJILti% ~ V4LU1L.J±1 _L l, Qt4.Ll indicators as per capita imports, per capita number of automobiles, M.L.LUID Q. ra .L-s ad.I 1-UCUD 11 P1-VPV-UJ.V11Ul UU Vi1::11.L UU1-y, U indicateLL~ that at the end of the 1930's Uruguay's per capita income very likely was 1 still o 01 ofrie LInigl-ls in1 ijLtzun ±reUll UnLL, UtUcopad,1t favorably with that of many Western European countries. 19. The stagnation in the levels of international trade during tne 1yUs arid lyU!s accelerated structural cnanges already in ev*ueice in the Uruguayan economy. Industrialization acquired momentum and the decade of the Twenties was one of rapid industrial growth. By 1930 there were 7,400 establishments employing 94,OC0 persons, i.e., a-proximately 14% of the labor force; 'yo of them had come into beIng after 1919; another 14% between 1915 and 1919. Only 10% of them had been in eListence before 1900. 20. Between 1930 and 1936 industrial development, in spite of the adoption of protective measures in favor of new industries, came to a standstill. The 1936 industrial census showed no further progress since 1930, either in regard to employment or value of output. The lack of industrial development during this period is probably linked to the reduction in the country's external payments capacity which resulted not only from the lower export levels but also from a reduction in the flow of foreign capital investments. 21. During the Second World War and the post-war years the Uruguayan economy went through a period of expansion which sharply contrasts with developments during the previous two decades. Under the impact of an increasing external demand and higher prices, Uruguay's exports began a rapid rise which carried their dollar value from $61 million a year in 1938 to an average of $242 million for the period 1950-53 (an increase of 300%, equivalent to a compound rate of over 11% per year). This increase was somewhat smaller than that experienced by all Latin American countries as a group (12z% per year) but exceeded the performances of New Zealand (8% per year), Australia (91% per year) and Argentina (7% per year), countries with a composition of exports similar to that of Uruguay. About 40% of the increase was due to larger volume of exports. the remainder to higher prices. At the same time manufacturing industries exnerienced an extraordinary development which trebled the value of output at constant prices and raised industrial employment from about 90,000 persons in 1936 to 175,000 persons in ment in the terms of trade, so that by 1951 the external purchasing power of Ur.UaYULI UAPUr-Lc Was0 nea4-ly tc asO high1 asO in1 1938., Reflecting the effects of this set of favorable circumstances, unofficial estimates available for the period 194o0 to 1948 indiucate that the availability of goods may have increased by 40%, i.e., at the compound rate of about 47% per year, thus providing a good margin for an improvement in standards of living. 22. Uruguay's post-war prosperity, bolstered by the Korea war boom, continued until 1954, Since then, with the exception or a brief upsurge in 1956, the economy of the country has been losing ground under a succession of balance of payments deficits and strong inflationary tendencies. The analysis of these more recent develop- ments appeamsin Chapter IV. The Financial Framework 23. Except for the last few years, the Uruguayan economy has traditionally operated within a framework of conservative financial and fiscal management, Price levels, as reflected by the Montevideo cost of living index, increased by only 9% over the two decades 1920-1940. Even the inflationary pressures of external origin brought about by the Second World War and the post-war years, when official gold and foreign exchange reserves increased from $76 million in 1939 to $312 million in 1950, were successfully controlled. Neasures adopted included higher reserve requirements for commercial banks, credit restrictions, limitations to the entry of foreign flight- capital and absorption of excess liquidity through market operations and the sale of government bonds in the portfolio of the Bank of the Republic, 24. Sound financial and monetary policies, pursued for a long time. was also reflected in the external value of the Uruguayan currency which until recently maintained remarkable stability. Thus in 1946 the peso (with a legal gold content of Ps. 1.519 to the dollar) was quoted at Ps. 1.90 per dollar. The de facto devaluation of the pF.mqn un to its nresent value of annroximatelv Psl1 ner dollar was gradual after 1945 but accelerated in the course of the past 2EL Hyniimtr nhilit.v ton maintain a rel.ative.ly high degPree. Cf stability in spite of the inherently unstable nature of its inter- Y~4~~1 +-"!3ln~ 1 z =vn" i ng:A lYvtr +_I-ci ni+A r%ir Tnn-njz+.n~T nnel rv-"g4 + policies which were followed until recently by the Bank of the Rlepul A v a tl e-d stence o saP nres of J inac+4 +A 4 nal 4nro which give a measure of financial flexibility to the public sector. The Bank of, the VepuIc, a- ------- nsiuto, praea commercial bank and, through its issue department, as the country's )CIa toteI aitl theUI L,. pUU siLver ho Ln gsW n d ul amount equal to the capital of the bank, plus silver holdings and - 7 - rediscounted commercial paper up to certain specified amounts. Beyond these limits the note issue required 100 percent metallic cover. 26. Government operations have generally not been a source of inflationary pressures. The Central Government operates through a General Budget which covers the bulk of current expenditures and through two major special budgets, viz., the "Public Works Fund" and the "Exchange Profits Fund". The General Budget normally covers only current expenditures of the central administration. Central Govern- ment investments, including assistance to Departments and Municipalities, are handled through a special budget (viz., the Public Works Fund), which is largely supported by shares of taxes allocated to it and by the sale of vovernment bonds. Public agencies operate within their own budget which, in addition to revenues from the sale of services, may include central government subsidies and proceeds from the sale of government bonds assigned to them. The Public Works Fund operates by adjusting the level of public investment to fit available resources, expanding or restricting expenditures according to circumstances. The allocation of resources Perine to the Exnhangn Profits Fund follows a similar procedure. Public agencies resort to bank credit on the hasiq of their own finannial standing and althah on nnnnqinn they have been able to use as collateral in operations with the Bank of the Repnhlin hnds given to them hv the (,rvevrnment. the nratice has not been widespread, Pension Funds -.also operate within their t-!r,y f?'zl r~c'.cti4 nnl rrinqamcin -xr, Zn = Ana~c f'n1 1n&sr +)n e,. - ,= t of restricting or delaying the granting of retirement and pension 27.* PuLblic ismn t nd) flr.n+n Govr-nnt~ a--istance to state enterprises and agencies are ccvered through the issue of government bonds.* These b-ond's are 4e' 4-,eredl to the- recipen enite who _44__.I-, in turn, must find a market for them. As of June 1959 the total internal ov U V J. VLU8UcL7 CU1mUUo ouL ro. UU F C)o C,7UV IIuLL L1, uL. WaI-L )U o conL1i.eU of national government bonds. Mortgage bonds issued by the State i'IVJ JJd.a±Ilk con e na. iU~ ' tU± 4.1 o n a . LU±id 3 5Q 11L1±~..P%_ LUiiu _5LZ)">US, accounted for the balance. A very large proportion of the Central Uoverument debt (Lout $)u wal helU by the variouU retUirement anU pension funds and an additional 30% by various state enterprises. Only 122%: was in the hanas of private holders. Inis latter group neld, however, over 80% of the official mortgage bonds. Main Economic Sectors 28. Agriculture. Although most of Uruguay's land is suitable for agriculture, only two million nectares are devoted to crops with the bulk (17 million hectares) used as pasture lands. Pastoral output represents about 60% of all agricultural output and about d0$ of the value of exports. There is practically no unutilized land in Uruguay. The areas around Montevideo and along the coast are primarily used for crops while the interior of the country concentrates on pastoral production. This geographical distribution emphasizes the need for a well-functioning transportation system, as most of the exportable products are produced inland and have to be brought to Montevideo for shipping abroad. 29. Pastoral production has been, and still is, the main economic activity in Uruguay. Within the livestock industry, wool accounts for 50% of the vdae of exports. During the last few years the wool industry has been beset with mounting difficulties, caused by a decline in the international price of wool and unfavorable erchanre rates. A recent exchange reform (Cf. par. 52-55) is expected to provide incentives for increased production of wool and other pastoral products. 30. Cattle production has been more or less staanant from the beginning of the century until World War II. There were 8.2 million head of cattle in 1908 and about the same number in 1939. In 19L6 the total count had dropped to 6,8 million, but it reached a peak with 8.7 million head in 19h9. Since 19h9 meat nroduction has fluctuated widely; but the trend has been downward. Particularly during the years ]9q7/8/9 meat. nrndutit.on of hoth nattl e and qhtnn lronned considerably, reflecting the difficulties which confronted the meat industry. During thi. nrind unfavorable P.rnnrt rqteq and sharn cost increases forced United States owned packing houses to close. 31. Livestock production has not only been handicapped by npolitici adlvrsc3e% o v-erports, bimt nas byr n insu.iffimint use- of modern methods of pasture improvement, inadequate technical knowledge increases in production can result from pasture improvement, sub- V ~* Va.. .. 4~ ~ iU L. UU ~L .U kUt UIU.L c n' ' eU r L ' i , -L'.) L il. _ grazing) and also from a better control of animal diseases. The favorable technical conditions for the expansion of pastoral TIuL A TT- ' - -- -- the largest market. The major products are: grains (wheat, corn, rice, oats, barley, re), industrial crops (linseed, sunflower, peanuts, sugar beets, sugar cane, grapes) and truck crops (potatoes, vegetables, fruits), Wheat and linseed are exported; together they represent about 14% of total exports. All other agricultural products are for domestic consumption. 33. Government policy since 1945 has favored production of wheat. The area under wheat greatly increased (32%) between 1948 and L5y, and wheat production rose over the same period by 227. Most other crops have also shown a moderate increase in production, except for linseed which has declined continuously since the war. Since all land in Uruguay is used either for crops or cattle raising, further expansion of output requires improved techniques of production. Even so, the appearance of substantial crop surpluses for export is not likely, except in the case of wheat and linseed. 34. Manufacturing. Between 1931 and 1954 manufacturing output and employment increased at the rate of about 6% per year. Since 1954, however, no further expansion apparently occurred even though employment data show gains; as a result productivity per worker declined by approximately 24%. Although the basic data, and particularly the estimate of output in real terms, may be subject to a substantial margin of error, the indications of some degree of recent stagnation in the manufacturing sector cannot be ignored, A possible cause that may account for this decline is the reduction of fixed capital used in industry. According to a sample survey covering establishments which account for 70% of total capital invested in industry, the value of total fixed assets at constant prices in manufacturing increased ranidly between 19h6-195o, but slowed down between 1951 and 1954. Since then the real value of fixed assets in industry diminished by about 10%. 35. Electric Power- Electric nower is generated and distributed by UTE (Usinaa y Telefonos del Estado), which operates one large thermal .nt.in near Mont.evidon and ahout fift.y namll onn in varin parts of the country. UTE also operates two hydro stations, Rincon iml Pnnp±.P +,j t.1i n r+n.l ,-#nr~ "0~ QpT,r n is 230 M.Y. Rincon del Bonete was heavily damared by the floods in 1959., WI,th ___et fa,lljbackr in, -I- - ion- and Pr~d addt h present demand for electricity can be satisfied. Since l99 electricity C 0n "1--,4 1, q. q ,r-A4 A~ q 4- th a4f - - , ,,', 4-r rs$ abi- c r yer futurenn expansion is projected at no less than 8% per year over the next decade. Uruguay possesses a relatively extensive network of roads and transport center of the country. It is also the most important port. 37. There are about 7,800 ., first class roads and 40,000- 0,u000 1M. of second and third class roads in uruguay. Route I, connecting Montevideo with Colonia and Mercedes,and Route VIII, conn Ur1eC g -onuev±ueo w.LU 11L.rEUita y Tre tLiU e11"LQ ZUIU Uloe DraL.iau border,are relatively good roads. They represent the Uruguayan contribution to the Pran American nigway system Desues Unese two there are relatively good roads along the coast to Chuy and Rocha. Of the first class roads, about 4,ou km. are surfaced with asphalt or concrete, while the rest consist of gravel roads. Although no vehicle registration data are available, it is clear that road traffic, passenger as well as truck, has increased considerably since the war, Since 1949 the country has imported approximately 30,000 passenger cars, 1,800 trucks and 33,000 chassis for trucks and busses. There are numerous small truck enterprises which are subjected to very little control or taxation by the Government and it is very often argued that because of these reasons they are in an excellent competitive position vis-a-vis the railroads. In view of the increase of traffic, road repair and maintenance has become very important. However, because of neglect in this respect, roads have deteriorated greatly during recent years. - 10 - 38. Mot of th Tlupnavan rnilroad system was built by private companies between 1866 and 1914. In 1914 the Government began the ronstruntion and onrntion rf snmp arMitnl linp. Privatelv- and Government-owned railroads were operated simultaneously until 1945 when all nrivate railasnnr. -re nirchasedhv .hp GvPrnmPnt. Tn 1952 AFE (Administracion de Ferrocarriles del Estado) a Government entity was formed to oprate the entire tem importance of Montevideo as all lines but one converge on the capital. except for a 7.5 mile double track section in Montevideo, of standard sigl trck Thr are -- M ---- _ -- - -- - - - (Care4 T3Rivera and io- U. u'V to the Brazilian railroads facilitating trans-shipments but there is no connection across the Rio Uruguay with the Argentine railrads. With U.r Km. of track per km2, Uruguay has the highest track density of all Latin American countries. With 1.9 km. per 1,000 inhabitants, Uruguay ranks szcond to Argentina in length of track in proportion to population. Only a small portion of the country is located more than 5U xm. from a railroad line, and in the southern parts this average is only 25 km. 4o. Since the takeover by the Uruguayan Government very little has been done to maintain or repair the existing system; as a consequence, the railroads are in need of heavy investments. This fact was pointed out in a technical report prepared by a group of consultants who studied the rail- roads in 1958 and found that a rehabilitation program was urgently necessary. This applies particularly to the Chamberlain-Paysandu section of the former Midland Railway. This section is one of the most heavily travelled and is used for transporting wheat, cattle and other agricultural products to Montevideo. The consultants' recommendations had not been implemented by the end of 1960, although at that time AFE was actively planning to undertake a limited re-equipment and rehabilitation program. Preliminary information about this program indicates that it deviates in important respects from the nrogram recommended by the consultants. III. CURRENT ECONOMIC SITUATION 41. At present the Uruguayan Government is carrying out a program designed to stabilize the economy and to remove factors which for several years have tended to brine about distortions in economic relationships and interfered with the growth of output and exports. This Chapter analyzes economic developments un to the end of 1959. when the Government adopted a stabilization program and new economic policies which aimed at reducing the Pxt.nt of state intervention in the economy and to free the exnort sector of the stifling controls to which it had been subjected. These polices and theus effects up to r entruments exangevand. DevelopmentS Bef ore 1960 largely based on the use of two major instruments, exchange and import controls± .LIJ.U Wit1: 61luL11, U0± uV11o1LLJU.V11 0Lv.U.:0 ILie latter were - 11 - designea to offset tne effects 01 ination 'Dy mainuaining aruLic_La_y low prices for certain commodities and services important in the consumers' budget, But it Decame more and more dificult to prevent a price-wage spiral fed by bank credit which largely undid the efforts of the monetary authorities to promote, through selective credit policies, activities considered of national interest (e.g., agriculture). No attempt was made to use the budget to promote economic development or to counteract monetary expansion. Between 1950 and 1958, government budgets, except that for 1956, closed with substantial deficits; these did not add to inflationary pressures, however, since they were financed to a large degree by the sale of public bonds to social security agencies. 43. Exchange and import controls, which had first been adopted in 1931, tended to increase in complexity. By 1959 there existed a bewildering array of effective rates for both imports and exports. A large number of bilateral trade agreements were also in effect. Although the main objectives of exchange and import control regulations were the balancing of the external accounts and the promotion of exports, particularly of manufactured goods, these objectives were neither consistently followed nor in general attained. Reasons for this failure included the widening of the margin between the internal and external value of the peso which fostered contraband and false exchange declarations and required constant tightening of the controls. To make matters worse, the control authorities were frequently forced to modify their regulations as internal costs increased and price relationships changed, thus introducing an element of uncertainty which discouraged long-term investment and prevented increases in production and exports. 44. The Balance of payments. The expansion of Uruguay's inter- nationnl trae,whchstrt.edr in t.he early- yers of' thei Seoztndr Wo-rldi War, continued until 1950 when exports reached a total of $254 million. Sine 190, the trndn in dollar ort vaus ha been downward. Underlying this trend in exports was a drastic decline in xariniturnI and pnt.nrn nrndtion and lnwer nrine. Wnl exports were influenced by the periodic tendency of producers to prices or higher returns as a result of tax or exchange rate mod:,f ic t-_Jo_n 'Pli, Aafl-ri J n J mnn+ V~r r 1ii"iA n g IOC:R n"A 101 O was due to labor difficulties which led to the closing down of three these plants in 1960 production and exports increased sharply. h. As to imports, their level tended to fluctuate violently .LIL LV)P ALO: UV LJ..L4 V "A ILj.V.LV IC rLA LU.J.A LJLCJ -"LI r,L ULZ adjustment of imports to changes in export earnings tended to lag LJy CLLUUU UIj.= tci W.Lwli Uilt:: L-t::UJ.U Uliau sVU at.dA .L t'LUv UU.LJ.U.LUO occurred in most years since 1954. The succession of balance of payments deficits is reflected in the sharp drop in official gold and foreign exchange reserves from $235 million in 1953 to 92 million at the end of 1959. - 12 - expansion brought about a pronounced process of inflation. This process UenUeLt2U WA akUULt-,_L : l. Ut:: -L;I,? f7 9 . LL1 .J7-?7 L1 UVOL, L~ A-L LV _L Ir LIAU-& I by nearly 50% and wholesale prices increased by about 70%. A special inuue relecLtig the cod t of lving of miuuLe Iuculu tLa'je' nw I ure modest rise (14.6%) for the same period. Price data, however, are not very reliable and must be taken only as a broad indication of trends. 47. Although Uruguay's inflationary pressures involved a wage-price spiral, the initial causes of the spiral can hot be precisely determined. Real incomes probably began to decline in 1955 when exports abruptly dropped from the level of about A250 million which they had maintained during 1950-54 to ;o184 million in ly55 and to an average or $a144 million in the following four years. In spite of this the economy did not contract, perhaps because money incomes were maintained by institutional rigidities which prevented mass dismissals and wage cuts and possibly by the intense activity in the building construction industry which appears to have occurred during the period. The peso cost of imports began to increase in 1956 and did so more rapidly in 1957 and the following years, as official import rates were raised reflecting the internal depreciation of the peso. The pressure of organized labor and the ability of the private sector, aided by liberal credit policies, to translate higher money wages into higher prices account for the continuation of the spiral. Wage increases in Uruguay are author- ized by wage boards composed of two representatives of labor, two of employ- ers and three of the government. The number of wage board decisions and the magnitude of the wage increases showed a steady rise over the past three years. There are indications, however, that real wages which increased rapidly from 1953 to 1957, declined during 1958 and 1959. 48. The money supply which rose at the average rate of 8.5% per year between 1950 and 1957, increased by 28% in 1958 and 147% in 1959. Total bank credit, largely to the private sector. increased steadily since 1956. Credit to the public sector did not contribute to monetary expansion since its growth (15% from December 1956 to December 1959) was more than compen- sated by increases in official deposits. 49. In recent years, c:.ntrkl b.nk operations were an imnortant element in total crHit epansion. Di-nt n-r.dit nf thp BRarnno Pnnhlinn to thr) nrivrate sector increased from Ps. 568 million at the end of 1958 to Pr. 950 million at the end of 19 9: rediscounts during the same neriotd rons from Pq- 197 million to Ps. 3!42 million, thus facilitating the growth of commircial bank credit which also exncrienced a substantial ircf_b (CTa1bq Vi10_ Trqpct an exchange transactions of the Bank of the Republic were an additional cause of the exnansion. narticularly during 1959_ These lnqPs followm from modifications in exchange rates as a result of which the Bank of the Rennhlic naid higher rates for the pchana honaht frnm Pvn-rt.ra than it. could realize through sales to importers. These losses are to be eventually hoern hv thp Tovernmpnt. C0o Fiscanl Tevlo Wn. rpi peration of- the centra - -v-- -me-n official agencies and the Exchange Profit Fund show substantial deficits with a surplus of Ps. 57 million, equivalent to 6.4% of total revenue. This in nrices. - 13 - ClTn 10O all pulin car+ny no.ai"AnnQ h lim.nrl u - 'P- e 1 AO million of which Ps. $7 million oorresponded to the central government and A LL.) 1LLJLJLI L. _&U. .LL)U%ArMU L,Y CZ kVA IU O*L~ ±111 IJVIJCXI U1RIi UO CLtILA palities as well as the autonomous enterprises balanced their accounts. A UU.L J_I1Vt::OUW11Z;1UO L, Lt:ZtL1 Ut-U _L 0 U11CLL1 1/_ L1 Ua t..A ;1U U . U * Oullru- what over half of these investments were undertaken by autonomous enter- pr3se 4nd deetaie se-cs Ote detil abou - 4. ofU--.11 the public sector as a whole during 1959 appear in Table 17. The 1959 Economic Reform $2. At the end of 1959 the Uruguayan Government undertook a radical exchange and monetary reform and adopted a new line of econumic poUlcy-. A law of December 15, 1959 recognized the de facto devaluation of the peso, eliminated all preferential exchange rates and established a single exchinge market with a fluctuating rate. Restrictive import licensing was abandoned and a system of import surcharges and advance deposits was adopted as a means of controlling the total level of imports and in order to discourage imports of non-essentials. Exports were subject to a system of "retentions" by which certain percentages of the export proceeds of wool and wool products and of some other major commodities were taxed away. The law also set a new official par value for the Uruguayan peso and determined the use to be made of the revaluation profits of the gold holding of the central bank. 53, During 1960 the exchange reform law was implemented through a series of decrees which modified some of the original export retention percentages and set the level of import surcharges and advance import deposits. Export retentions were determined on the twofold basis of makLng export commodities competitive abroad, and still permit the government to collect a large amount of taxes -- Ps. 300 million in 1960. 54. During the latter part of 1960 the Uruguavan Government took further steps to pursue its new economic policy. In July, the Legislature approved a bill which increased Uruguav's quota in the DIF from U. S. $15 million to U. S. *'30 million: in September the Executive issued a decree by which the parity of Ps. 7.40 per dollar was adopted for opera- tions with the IMF and a stand-by credit for 30 million was negotiated with the Fund. 55. The return to a single fluctuating exchanee rate involved the abolition of many subsidies, implicit in the structure of the multiple rate exchange system. In an effort to sunnress the remaining nrice distortions the government allowed some of the autonomous enterprises (UTE, the water sunnlv comnany and the Port Authoritv) to charge nricns which cover the full cost of their services, so that they can operate without eipfit-i ts_ Pri n~ f'c;q ~o i ntz- -1 Pt-tri t-i tv qre 'at.pr unnp rinlih1pri- A substantial increase in freight rates was also granted to the National P Ailwas.7 But Rithe Rai ilways-r_ st.ill -wil n r~ o rcilve amav,red sharesO of taxes (which at the present time amount to nearly 50% of their total revenues) wto.cver pratiePes. Ceain irert subsidipresuchss those on-wheat, 'which required Ps. 160 million in 1959, were also suppressed -A +VAc +-,,-I - L1;- - U4 -- I G A--1 re" fr ILVWVVU.L , -LI1L LJU~I UL u1iL A1. transition some subsidies (e.g., on milk urban trnnnrt.. oannline for rural consumers) will be maintained for the time being and financed through export retentions- 6. A mainr t.tpn in the financial rPadinw.mPnt.ti +.he onuntry is a four-year (1960-63) budget, discussion on which began. early in 1960 and -tahinh u finnliv n 1tr 'rswJ no +he -YArn^ e'1 on1 . rTVn vnn.Y 1 n + which according to Uruguayan custom is drawn for periods of four years, implies a rastoic- -irficl refonrm as new +n n", -n+- ing taxes will raise 1960 revenues by nearly 50% over the 1959 level. One on income from all sources. Expenditures were also substantially increased, maily for salarieofu publc empIoyeeL, whch had. remained unchanged since September 1957. Notwithstanding the higher level of revenues resulting from ule f0scl retUrm, cenUtral government savings, as well as public sector savings in general are very small, the latter amounting to perhaps 3% of L\1 kee Appenux F tor this reason it is important to undertake a study of the nature of government expenditures with a view to determining whether current expenditures can be reduced, thereby releasing resources for the financing of investment. 57. Simultaneously with the adoption of the economic reform program the Uruguayan Government began consideration of a list of public invest- ment projects designed to strengthen the productive capacity of the country and to counteract the possible short-term depressive effects of the new monetary and credit policies. In line with these plans, an extensive publin works program and an agricultural improvement program have been started. Similarly, a pasture improvement program, in large measure financed by a $7 million Bank loan, which became effective last December, is now in operation. Some of the autonomous state, industrial and commercial enter- prises(e.g., National Railways and ANCAP) have investment plans of their own. In addition, many other projects, in various stages of study and preparation, are now under consideration by the Government. In order to establish statutory authority for this program Congress passed at the Cnd of 1960 a law authorizing the issue of Ps. 2,700 million in internal bands. The law also authorizes the Executive to negotiate external loans. Anart from the projects for which specific Congressional approval was requested and obtained, a message to Congress listed other projects under study for which such approval is not necessary. The economic and financial aspects of the proposed public investments are reviewed in Annpnaiw A nf +iseort Developments During 1960 58. Although the change in government. poli ciPn n i n + + e C of 1959, and important measures were adopted only later, developments during 1960 already show the beneficial efferts of the ne p.icie. D- e- En of 1960 there were indications that inflationary pressures were slackening, that the international amounts wero imngVe an t th agric41turl.. ., sector, particularly, was reacting to the more favorable exchange rates brought about hv +.he forein exchange refor U the p of e - ment is not complete as yet and the effects of some measures, such as the adontion of the new epaMndn bu4g+ ar- -l o A oe. The sm, hcates efet f tise SIMPlificauion of tLe foreign er ,P.nge syrstem, tho sup-oression of some dir_ect sulhsidie5 r d t'e( devaluation o0the 'poso was an increaoe in the prices c1 r:am corurloll~tips wrlrd - 15 - the orevious system had kept artificially low. The price readjustment brought about demands for massive salary and wage increases. These increases, which in manv cases exceeded the rise in the cost of living. were generally granted. However, the Ministry of Industry and Labor announced that in the future government rPnrPsPntatives in wane hoards will noorciinqte their actions and will not support wage increases greater than increases shown by the offi- ninl cot of living indy- 4o TDing; them first+ hal f Iof' the ny m^vm+3v" ovnc-r r 'n~VI+ATI11r at a rapid pace (5.4% per month as against 4% per month during 1959). the end of November it was only 1% above the July level (Of. Table 13). rI"_nA-;+ +-, +11~- -, r+c 3+ - n,n iAA r+ '.k, 4-1, - -n -na .+- -n 4 , (2% per month) but the expansion was in large measure counteracted by the Vr V IJLIL Us4 V.L I. ±oI1lt-. L;IV4.I UC IXL*CL qz expected to decline, however, once the salary increases of the new budget uecome effective. Net cenural bank credit to the governienu U:cL.UiUu UtIvUItMl December 1959 and November 1960 by Ps. 384 million. Credits of the Bank of the Republic to the banking system also remained unchanged since March 19ou. The reduction in the pace of monetary expansion began to be reflected in the price level by the end of 1960. The cost of living index, which during the first nine months increased at the average rate of 3.4%, increased only 2.3% in October and declined by 5.0X6 in November. The special index for bank personnel increased at the rate of 2% per month between January 15 and July 15, 1960 as against nearly 470 per month during the previous year. Whole- sale prices have shown only slight increases since April 1960. (Cf. Table 12). With the cost of living and prices in general caming under control, the con- tinuation of the present strict credit policies together with some lagging in wage increases should go a long way toward bringing the wage-price spiral to a halt. 61. On the basis of revenue and expenditure figures for the first ten months of the year it is estimated that the 1960 central government budget will show a surplus of Ps. 128 million. Revenues for 1960 are estimated at Ps. 1,475 million as against Ps. 899 million in 1959. The largest revenue increases came from sales taxes and other business taxes and from customs and other import duties (Cf. Table 19). They thus reflect the higher tax base brought about by inflation and the greater imports which occurred in 1960 in comparison with 1959. Government expenditures for 1960 are estimated at Ps. 1.347 million as against Ps. 842 million in 1959 - nearly three-fifths of the increase being accounted for by higher wage-salary payments. 62. Balance of payments information for 1960 is not yet available but preliminary information indicates that exports reached a total of $130 million. Wool exports moved slowly and unsold stocks were still substantial at the end of the 1959/60 season. Preliminary data for 1960 place imnorts at A203 million (excluding $25 million of P.L.480 imports), leaving a trade deficit of $73 million for the yeqr, which nomnares with a definit of $79 million in 1959. A substantial part of the 1960 trade deficit was apparently financed by supplierc -rdits and movementso_f private aile. Athe end of 190 official gold and foreign exchange reserves were $80 million or only $12 exports, after a reduction in the percentage of exchange retention, moved $Lj8 Ailio ofu "Lov P V VwiJcr wLo . ccouted or $50.9V MlLIUon Und.L woAU top $89.4 mil:lion of which raw wool accounted for $50.9 million and wool -tops IV. ECON-IC PROSPECTS 63. For many years Uruguay's level of per capita income has been among the highest in Latin America and growth was well maintained beteen 1939 and 1954. It is only since 1954 that the Uruguayan economy has been confronted with difficulties temming from a combination of such factors as lower prices for export commodities, government policies discouraging agrL- cultural production and exports and, for the past three years, unusually severe weather conditions. Over this period inflationary pressures developed and introduced distortions which compounded those resulting from excessive government intervention in the economy. 64. The removal of the obstacles to expanded agricultural production and exports and a return of more normal climatic conditions, should soon be reflected in substantially higher levels of exports than those of recent years. It is estimated that 1961 exports may be .at least 8175 million. as against 1131 million in 1960. Proiections based on what are believed to be reasonable assumptions point to a possible level of $238 million by 1965 and '261 million by 1970. (Cf. ADDendix B). 6q- Tht- nusTs that led to the inflationary nrenre of recent years are being removed and the country is moving toward monetary stability, the restorat.on of normal nricn relationshins and the normal use of the nrice system as a mechanism for resource allocation. Although considerable nrogress has bAn made in this dirention and nronetq for anrrtHnc thuegh the stabilization program are favorable, success is by no means assured. ing credit to the private sector will have to be adhered to strictly. Under thee cndtios,a grada reur of Urga to internalJ and extenal e-A- librium and the resumption of income growth may be considered likely, parti- vue he uuvermueno4 u-P urga ez neaais souuI I- 'A). U UU tLUIILt.Ll UAk. Ul U cAUy L t=LC WflL, U L Ud.u±J.jtL U_L!k II~L l Utb considered only as a step toward economic growth and that to this end the I ofl_- pub'li-c -,,A ,-, t~+a - ~ ,,,~4 -,, -A T-~ r- -A, + In4, public sector it is evident that years of neglect have produced many gaps 4k~ U ~~~ ± Lc%L;_L_L_LU_L,tD _ U± ldlu UL ly (ILIU lict cwt:;I-y J.LIVtoulllet field is in need of improvement and expansion. A similar situation prevails in Ute private secoUr, where invesument in agriculture as well as in manIu- facturing appears to have been inadequate to permit an expansion of output. Aware u these de1u::cies, the goverument is already implementlng some basic investment projects in the fields of agriculture and road transport which by themselves should materially contribute to the further growth of the country. Other projects which require external assistance are also under consideration by the government. (See Appendix A). In brier, the prospects of an early return to normal levels of exports, the control of inflation and consequent disappearance of artificial price distortions and production bottlenecks, and the implementation of a sound program of public investment should result in the enlargement of the present productive basis of the country and bring about a period of renewed economic growth. - 17 - 67. The realization of the long-term growth notential of the country requires that the Government make a special effort to prepare a public investment Drogram in which rriorities for the various nroiects he deter- mined on the basis of sound economic considerations. This program should be adiusted to the financial nnqibilitiP of the nountry Tn t.hi-- rpmnt it may be appropriate to stress that public savings have been extremely low in the past and that the budetary and fiscal reform recenty adnn+oed dooe not greatly augment the domestic resources which the Government can commit for investment.nnnpes 68. A furtherp- pre qisit tr o- ssure, orel4cooi-rot sa improvement in the policy-making processes of Government. The public sector -1, - -~ -W r_ ~ L MO L.LI.Lu L JLAU J U 1~ CZO d:LL LU1-Vk.J1ULL1LU LA complex of autonomous public enterprises and decentralized public services. As a resul , poliyc and, in the area of public investment, investment plans of individual agencies are drawn with- out regard to the hare of the country-s resources that should be usea by the public sector as a whole. This situation points to the need to establish some central group for the coordination of economic po11cies and public investment. To operate successfully such a group requires information on whicn to base decisions. This information is now largely lacking or not readily available. Therefore efforts must be made to centralize and improve une statistical services and the provision orcurrent information on the country's output, and on savings and their use. V. CED TORTH INESS 69. in appraising Uruguay's creditworthiness it is important to stress some of the basic characteristics of the country, viz. an ample resource base in relation to the country's population, a high level of per cavita income, a long tradition of political stability, and lack of serious social problems. The deterioration of the country's economy over the past few years resulted from policies which discouraged agricultural and pastoral production and exports, from a wage-price inflation and from a decline in export prices which, together with unusually unfavorable climatic conditions, reduced export proceeds to extremely low levels. 70. The continuation of the policies already adopted by the Government should result during 1961 in current exchange receipts in the neighborhocd of $175 million. The external public debt of Uruguay (134.5 million eqi:i- valent as of June 30, 1960) is modest and largely in the form of long-term publicly issued bonds (45%) and IBRD loans (h6%). The balance is in United States Government credits. The total service on this debt will require approximately .ll million a year until 1970. (Cf. Tables 1 & 2). This amount represents approximately 6% of estimated extorts in 1961, and., on the basis of projected exports, somewhat less than 5% in 1965. 71. Assuaing the continuation of policies conducive to the growth of the export sector. Uruguav can service external obliations 7reater t.hnn it now has. It should be strongly stressed, however, that in order to carry out all the nuhlic investment nrojects which the U nuguayan Government s - 18 - presently considering, it would have to borrow on a scale that, barring a radical improvement in export prospects, would heavily commit the country's debt servicing capacity. For this reason and in the light of the observations on the public investment needs and official plans contained in Apendix A. until a well-thonght out lono-term nblif- investment program can be prepared, external borrowing should be kfjpt at a modest level and the -nrocds used onIv to finance obvinumly nigh priority projects. APPENDIX A Public Investment Plans Naturn- mAonitude and finannial resoureps 1. This Appendix sunTnarizes information on a series of nublic invest- ment projects which the Uruguayan Government has under consideration and, ujhint to limi+a+inns st.mming from Ink ot adequate infnmation attemPts a preliminary appraisal of their economic importance and financial possili- been officially arranged into an integrated program; some of them are high- Ut, au..vY .].~ U I LAW. W.VU4I.06a.L UJ. W . L S. . V .JI. 4 JL O ±x WUUCLI 4 L.LA It4U, some projects are already being carried out, or will soon be undertaken tive year by year phasing of projects requiring several years to complete cial estimate available of the aggregate annual cost of all projects. Nei- vu1:r have -tle Uruguayau autoriv"es earmarkeu umeiffe"Si fi"uanCiaal resourCEiS to complement the foreign financing which might be secured to assist in ixuancing some projects in the program. 3. In oraer to appraise the financial implications of all the pro- posed projects, they have been brought together and phased rather arbi- trarily over the period 1961-oo. The results are presented in Table A at the end of this Appendix. 4. The total cost of the projects is Ps. 5,289 million; the average annual cost over the next three years (1961-63) is close to Ps. 1,100 million. These figures do not include a group of projects, which are so highly tentative that they need not be considered as feasible in the next few years. The projects under active consideration are in various stages of preparation but their undertaking is feasible provided funds to finance them can be found. In the following table the cost of the various projects in the period 1961-63 are shown separated from those in the period 1964-68, because the recently approved government budget also covers the period 1961-63. Appendix A - Page 2 Proposed Public Investment, 1961-68 Total Period 1961-63 Period I--e+m-n+ Total Annual %196L-8 1961-68 Average TOTAL 5,289 3,293 1,o68 1000 1,996 Roads 2.22h 1.22h [08 38.3 1,000 Railways 340 240 80 7.5 100 Electric Power 1.139 310 103 9.7 829 Agriculture 354 354 118 111 - Industry 38 538 178 16.7 - Urban Transport 100 100 33 3.1 - Airnort Construction 81 81 27 2.5 - Waterworks 257 190 63 5.9 67 Aeronhtnramtric Suryvy .1 36 12 1.1 Schools and Housing 220 220 44 4.1 5. The proposed annual investment of Ps. 1,100 million a year for the ne.u tuee years compares with otal pubic investmuent of PS. 11Q million undertaken in 1959. Investments of Ps. 1,100 million a year would roughly represent 17b of total public sector expenditures, and perhaps yh of gross nationalproduct in 1961. These percentages are not high if contrasted with the p4ubli investet of otur countries, partcularly if the large share of the Uruguayan public sector in the Public Investment 1959 and Proposed Investment, 1961-63 (Actual) (Proposed) (in million of peqos) Central Government 50 579 5b9 570 Departments and Municipalities 15 83 128 160 Autonomous Enterprises and Decentralized Services 83 104 185 261 Other - 173 173 192 Total Public Investment 148 939 1,075 1,191 Total Public Sector Expend- 2,273 5,000? itures Gross National Product 5,600 10,000? Total Public Investment as % of: Total Public Sector Exp. 6.5% 17% G. N. P. 2.6% 9% Appendix A Page 3 national product is taken into account. But the fact that the proposed investment would raise public investment from 2.6% of G. N. P. to perhaps 9% indicates that so much investment may be excessive relative to what is nossible in Uruuuav today. These doubts are confirmed by an analysis of the resources available for the financing of the progran. 6. The following table presents a rough estimate of all resources availablp tx) finann nublic investment over the next three years. Central Government Savings. As indicated above the budgets for 1961 to 10AT show current account.surpluses of Ps. 146 mill±on in 1961 Pa 1_ million in 1962, and Ps. 333 million in 1963. However, these estimates are shiet t.n wide margins of errnr The inflation of the nant thrpe years, changes in expenditure patterns associated with it, and expanded expenditures inevitably hazardous. This is equally true for the Exchange Retentions nde Tmport" 0iurnnrges Fuindich isn tkAo rovd y"tresure fo the general budget (100 million a year) over the next three years. 7. An analysis of the official revenue forecasts indicates that, comprehensive turnover tax which replaces a more limited sales tax now in years is to come from higher prices and the normal growth of the economy. Ln view u Une stabilization program and une recent, breEU 11 prices, te projected increases must be considered exaggerated. A more reasonable es- tiate is that no surplus will arise in 1961 and 1962 and that the 1963 surplus will amount to no more than Ps. 100 million. As to the autonomous state enterprises, some like ANCAP (Cement, Alcohol and Petroleum) and UTE (Telephone and Electric Power) provide savings to finance at least part of their own expansion but many others (National Railroads, Monte- video Harbor, the Water and Sewage Agency, the official airlines, etc.) have operating deficits that in the past have been covered by the central government budget. Not more than Ps. 10 million may be expected as savings originating in these enterprises. 8. The public sector has not been a source of monetary expansion since the end of 1957. In line with the current economic stabilization plans, this situation is expected to continue. Bank credit will not, in consequence, be used to any considerable extent as a source of financing for the proposed investments. Only token amounts of bank credit (Ps. 20 to Ps. 30 million a year) have been added in the estimate. As to credit from private non-banking sources, it is also felt that no more than limited amounts (Ps. 40 million a year) of public bonds can be absorbed by individual or institutional savers. Appendix A - Page 4 Proposed Public Investment and Estimated Financial Resources 1961-63 (In millions of pesos) 1961 1962 1963 A TotAl Tmpqtin Finnnnina 326 31 h1A Surplus on Current Account (adjusted) - - (F0) 'L " I r Ist-en U UUK JQ Exchange Profits Fund /A-- ..A . . n*-- /-1 /QA /on1 kmgricuLd-Cural Prugram kUUj \UVU (UJI Exchange Profits Fund k~XUuL.LC VU.E-n ) k%)~L Tax Allocations (Public Works) (125) (125) (125) Profits of Autonomous Enterprises 10 10 10 Credit 60 65 70 Bank credit (20) (25) Net Sales of Government Bonds to non-bank investors (40) (40) (0) B. Total Foreign Financing (Available and Possible) 71 81 81 Proceeds IBRD loan: Pasture Improvement Program 20 30 30 Proceeds of possible DLF loan: Agricultural School 7 7 7 1J. cee"As .L. PV 0.L. "PV.;.LCL 1UVrMUUIJd. uL loan: School and Housing Program 44 h4 4 C. TOTAL DOMESTIC AND FOREIGN FINANCING (A+B) 397 412 $17 D. TOTAL PROPOSED INVESTMENT 939 1,075 1,191 Financing Gap 5h2 663 674 Gap as 7% o investment 57$ 61o > Domestic Financing as % of investment 35% 31% 36% Source: Mission estimates Appenax a - rage 5 9. Fo:eign financing already available or likely to finance publc investment, includes the proceeds of the recent pasture improvement Bank loan, a small amount from a possiole a loan to finance an agricultural school and perhaps Ps. h million annually for school construction and low- cost housing expected to be available from the bpecial United States Fund for social and economic developnent. 10. To summarize: domestic resources may amount to Ps. 326 million in 1961, and Ps. 436 million in 1963, equivalent to approximately one-third of the cost of the proposed investments. After including the proceeds of the $7 million livestock loan and two possible loans by the Development Loan Fund and the Bogota Fund, still only 43% of the proposed investments is covered, and Ps. 1,900 million, or US$ 175 million, remains to be financed. 11. A preliminary comment suggested by the above figures is that the level of public savings is rather small in Uruguay. On the basis of existing rough GNP data it can be surmised that GNP in 1961 (current prices) may be in the neighborhood of Ps. 10 billion in which case the savings of the Central Government would represent approximately 3% of GNP and about 12% of total government revenues. Both these percentages are low in comparison with the saving performance of most countries and even more so if contrasted with the level of taxation which probably exceeds 20% of GNP. On this basis it seems that a thorough study of the nature of current government expendi- tures with a view to improving the present ratios between current and capital expenditures would be amply justified. 12. Since many of the specific projects listed under the general hadinas in thp Table A hvp nt een evaluted it is not nonsible at +.hi time to determine whether the country would be justified in borrowing abroad the annivalent.n- TTA 17< million to Mrr ni+.+ha nra Mn nIver +. borrow such a sum in the next few years would go a long way toward more than appears likely at this time. 13. Although the investments under consideration involve expenditures good case can be made for the economic importance or the social need to -n e ta. i-nt t Jn al-I the 4'- n1Aa -Ivr "'A 1-, +I~,- A. -,a -' the report shows, the agricultural sector has lagged behind the rest of the economyLIL . ±LLe roa anL r aiway LL y -tes areII1 bad~LI.-iQ.y .Li"n needL' ~L I- PcL0.L.L , A 4, electric power, the proposed expansion is in line with normal growth of dean. f ouse these broad cons-Ider"aions d not imply . tht hemaiud and nature of the specific projects are correct. The so-called "Public Works Program" (rs, 2u million a year) may Ve too large, for Iluance, since the amount of Ps. 200 million must be added to a special investment of approxi- mately rs. u20 million over the next few years to finance three major na7ional highways. Although the need for road construction is great it is possible that the proposed rate of investment may be excessive even in terms of the physical possibilities of the country. Moreover, the re-equipment require- ments of the national railways, the long-term reorganization of the railways and their coordination with the road network has not been adequately studied. The railroad north of the Rio Negro also still requires basic studies before a final decision to go ahead with it is made. 14. Because of the financial and technical uncertainties, the practical course is to begin work only on projects which have obvious priority and which will be part of any later overall program. Appendix A - Page 6 Table A: PROPOSED PUBLIC INVESTMENTS, 1961-68 (In millions of pesos) Investment Phas ing of Annual Investnent for 1961-48 1961 1962 .1963 1 1966 7 9 Description period ./ TOTAL - 5,289 939 1,075 1,19 -1 546 463 372 376 309 Highways 2, 224 408 408 408 200 200 200 200 200 Regular Public Works Progranf~ 1,6oo 200 20 200 :200 200 200 200 200 Route 5 - Montevi.deo-Rivera3/ 228) Route 26 - Paysandu-Rig Blanco 2h0) 208 208 208 - - - - - Route iiorLtevideo-.OhuiŽ 156) Ralwhys 340 60 90 90 50 50 - - - Re-equipment National. Railways- 100 20 h0 ho - - - - - Railroad North of the Rio Negro 210 140 50 50 50 50 - - - Electric Powerå/ 1139 44 95 171 203 169 172 176 109 Fifth Unit "entral Batile" 125 13 30 50 32 - - - - Peak Load Generating Units 56 6 23 27 - - - - - Expansion Collector System 21 5 16 - - - - - - Expansion 30 and 6 K Network 107 11 11 11 11 11 11 20 21 Expansion 220 V Network 65 7 7 6 6 7 6 13 13 Super-Central (Thermic) 261 1 7 51 50 68 42 - - Paso del Puerto Flydroelectric Plant 504 1 1 26 1oh 83 113 - 75 Agritulture 354 115 125 114 - - - -- Agricultural Improvement Prqyram 2140 80 80 80 - - - - - Pasture Improvement Prograil 94 25 35 34 - - - - - Agricultural School 20 10 10 - - - - - - See footnotes at end of table (Continued) Appendix A - Page 7 (Table A continued) Investment Phasing of Annual Investment for 1961-48 1961 1962 1963 -1964- 19 51966 1967 196a Description period - Industr 8 538 173 173 192 - - - - - Petroleum Refining 63 - - - - - - - - Cement Plants 114 - - - - - - - - Fertilizer Plant 112 - - - - - - - - Re-equipment Industrial Sector 200 - - - - - - - · Re-equipment Fishing Industry 49 - - - - - - - - Waterworks</ 257 23 68 99 67 - - - - Urban Transportatiorl 100 33 33 34 - - - - ivi<rtevideo 100 33 33 3-4 Airport Construction and Improvement 81 27 27 27 - - - - - Carrasco 34 1 11 12 - - - - Other Cities 47 16 16 15 - - - - Aeiophotorametric Survey 36 12 12 12 - - - - School and Housing Program 220 44 44 44 44 >4 - - - 1/ All costs expressed in millions of Uruguayan pesos. Rate of exchange used in all cases is Ps . 10 per U.S. dollar. 2/ According to bill submitted to Congress, the Ministry of Public Works would operate with a special Fund (Tesoro de Obras Publicas) to which s:pecific taxes (gasoline, real estate, etc.) are to be allocated. The Fund i! eqtimted to mount. +o P. 200 Mnillion a yer Mainenne Tppirsq and rpw ronstructinn re. tn be planned in a flexible way and paid out with resources from the common Fund. (Continued) Appendix A - Page 8 (Table A continued) / Program submitted to Congress. It has been assumed that it will take three years to complete it. 1/ Proposed purchase program submitted to Government for approval. Plan contemplates implementation over next two or three years by means of supplier credits. Repayment of credits to be undertaken by AFE (Administracion de los Ferrocarriles del Estado) out of current earnings and a bond issue in about equal parts. Allocation of purchases over next three years is arbitrary. / Progrzan submitted by UTE (Usinas Telefonicas del Estado) to Government. 6/ Program, approved by Congress, contemplates use of Ps. 80 million to promote use of fertilizers, seed improvement, weed and animal-disease control, etc. Funds to be provided by the Export Retentions Fund. 7/ Program financed in part by IBRD loan ($8.0 million) and by internal credits of Ps. 14 million. 8/ Investment program of ANCAP (Administracion Nacional de Cemento, Alcohol y Petroleo). Financing to be undertaken by the state agency itself. The investment has been arbitrarily spread over next three years. 9/ Includes water supply and sanitation works for which OSE (Administracion de las Obras Publicas del Estado) has prepared detailed plans. 10/ Covers most of expanding and improving the public transportation system of the City of ontevideo, The cost has been allocated over next three years. APPENDIX B Export Prospects 1. Assuming that government policies conducive to the growth of the exp'ort ctor are-followed, prospects are good that Uruguayan excorts TilLquiclyrise to the nre-19q7 level and that they will grow at a moderate rate. The rate of exchange is now favorable to agricultural producers. The PnvPrnmnt has taken measurns to increase qnd imnrove nastoral and agricultural production and favorable results may be expected in a 2. Aftern 'IQ9' 5 .1 the'nliin of ePonrt.. hci frn-n rin xnxrragn of about ",210 million to %97 million in 1959, rising to '130 million in 1960.The decline in 1959 van caused v q fall in nxnort nrices, by weather conditions and by policies unfavorable to agricultural exports, Because of these future exports. Exports have therefore been projected on the basis Th resul o.-O L U LU P1U)J~U-ULL10 d.±- L11U V U uy ~. exports may be about '$ 240 million, and about $ 260 million by 1970. IH-Ls meant hl.±~ Uatd exports1a aV± JA..d U C211 C.IULI-L.J IC.UU U. )/0 WUU.Z.- 1965, and at 2% between 1965 and 1970. Should price conditions .Uiapruvte Q.L wzuu-u it be Jpj-U-t: UL) UILPULIU s1 1-ignifcant-ly Wit- ±±, O. exportable goods, export earnings may be higher. 4. The most important export commodities are wool, meat, hides, wheat and linseed. They account for about 9170 of total exports. Ine remaining 9% consist of other agricultural products and minor exports of products of the mining and manufacturing industries. 5. Wool. Uruguayls major export commodity is wool. Between 1951-1956 raw wool represented about 40% and tops about 13% of the value of total exports; about 65,000 metric tons of wool were exported annually. Because of the decline in the price of wool and unfavorable exchange rates, the value of wool exports fell considerably in 1957 and again in 1959. In the latter year unfavorable market conditions and floods reduced exports. The new exchange rates have made wool exports economically attractive. As a result of the program to improve and increase livestock production considerable increases in wool production can be expected in the next few years. In view of competition particularly from Australia, it is doubtful though whether Uruguay will be able to increase its share of world wool exports. A conservative estimate of Uruguayts wool export prospects must therefore assume that Uruguay's historical share of 5% of the wool market will be maintained, or rather regained, since this share was lower during 1957 and 1959. 6. It is not expected that world per capita wool consumption will be significantly increased during the 1960's. Thus, any increase in wool sales must result from population increases, which in the more important countries is estimated at 1.5% per annum. On this basis, world Appendix B - Page 2 wool consumption in 1965 will be about 3,300 million pounds and 3,500 to 3,600 million pounds in 1970. If Uruguay maintains a share of 5% of this market, exports of raw wool valued at )100 million in 1965 and 107 million in 1970 would result. 7. Exports of wool tops are expected to rise at about the same rate as raw wool. This represents exports of about ;30 million by 1965 and perhaps .33 million, or 10% more, by 1970. These proportions may underestimate future exports since Uruguay?s capacity to produce more and better wool together with slight changes in demand conditions or prices could easily result in consider- ably larger exports. 8. Meat. Uruguay's second most important export commodity is meat. It is estimated that in 1960 Uruquavan exnorts of meat and miat nroructs Prnod $40 million. Average exports for the period 1951-56 were 130 million pounds, valued at about th million- rommennin, in 197 nnl ndlina in 10Q oliume as well as value of meat exports declined because of unfavorable weather conditions and the discmraing effects of exangn rtn+e on rACoduce anI exporters. Now exchange rates are favorable and the meat industry is expe- expected from plans to improve livestock production. 9. Since per capita consumption in Uruguay is among the highest in the faster than population. Thus, a very large portion of increased production wilill beAJIJ avi.al t1Z)OLL1110Li Zj-L11±±±CkL1U QVU llulff.ut, it can be expected that the value of meat exports will increase by about 5% per year for the next five years and by about 3-1/2% per year herealter. StocKs or beef-cattle (6.9 million in 1959, or the same as in 1956 when the volume of bee expurvs was ukip ugner; appear sufficient to sustain the projected immediate increase in exports. This is confirmed by the export level already attained in 1960. (tf. attached Appendix Table). Prospects are good that increases in meat production will be easily absorbed in the European market VTT where most of the Uruguayan meat exports are sold. 0. niues anu SkinE During the six-year period ending in ly5 urupuay exported on the average 67 million pounds of hides and skins valued at about IL0 million per year, mas represented 9o of total exports. Exports or hides and skins declined between 1957-59, both in terms of price and volume. 11. Because of the expected rise in meat production, a corresponding increase in hides and skins can be anticipated. By 1965 the volume of exports of hides and skins probably will have surpassed average annual exports in 191-5o. For the following five years (1965-70) exports of hides and skins are projected to increase 4% per year. 12. The increased use of leather substitutes is likely to bring about some decline in prices which will partly offset volume gains. But on balance the value of exports, although lower than during 1951-56, should be nearly twice as high as that of the past three years. Appendix B - Page 3 13. Wheat. Between 1951 and 1956 Uruguay exported on the average 260,000 tons of wheat, valued at about $23 million. In 1957-59 wheat exports declined because of unfavorable prices as well as poor weather conditions. Like Argentina, Uruguay is a low-cost producer; the quality of its wheat is well liked in Europe. However, as long as such international factors as competition from United States wheat and flour and price arrangements under the International Wheat Agreement remain unchanged, there is little prospect for more than a slight increase in Uruuay's exoorts. l. On the sunnly qide- it seems reasonable to exnect that because of attractive peso prices the amount of wheat available for eXnort ill inCreasn RnmPwhnt_ nerhans returning to the more normal levels of wheat exports of the years 1951-56. With stable prices, rho v+. ,n-n+.k f%f t17 millinn ^v- 9C < 'hplnou +.hp 01 vr mn-y be expected. 15. Linseed Oil. During the six years 1951-56 Uruguay exported 4n +- nirnn"n . n4 mi11 4 vtr T.Tavi ^+h i 14 epl MI. Tn j h lo o+ ihrop years exports averaged $4.7 million. Total world demand for linseed ^41 4 an+ r - vnn+aA +. w.an ayA TTwen,orrfe shows-f +ho r.rrvAA m,n + is not likely to increase. For this reason, exports of $6 million 1- U,,r . - n-.n 4-r,4-A fr 4-1,,- ---+4. '1 - -ra., OtherI~ Exporuc Illu Jm~ 1iC.L_"j_11r'i~ 7/0 VJ.L u_jt ..Jluo %'VIQLLDt' .L U± I. agricultural products and a few minor commodities produced by the ming anU mGanufaCtuUrg nAustries. Because of the recent excnange reform prospects for the increase of these exports are favorable. If Ulney maunta.-U-1 tnehe nate of toual exporus excuange ectuibigs from them should be $20 million by 1965, and about '$22 million by 1970. Appendix B - Page 4 EXPORTS PROSPECTS, 1965-1970 Average Projected Commodities i19-5t 1957 1958 1959 19601/ 1963 1977 Meat and Meat Volumie (millions pounds) 129.7 132.3 55.4 76.6 - . 200.0 235.0 Products Value (millions US$) 34.1 27.5 14.6 18.5 30.9 50.0 59.0 Price (cents per pound) 26.0 21.0 26.0 24.0 - 25.0 25.o Hides and Skins Volume (millions pounds) 67.3 51.9 41.9 41.2 - 70.0 85.0 Value (millions US$) 19.9 10.8 8.9 9.8 11.0 14.0 17.0 Price (cents per pound) 30.0 21.0 21.0 24.0 - 20.0 20.0 Wheat Volume (thousand metric tons) 2 1 7.2 286.3 59.3 2/ 280.0 280.(0 Value (millions US$) 22.9 9.4 17.2 3.2 - 17.0 17.0 Price (US$ per ton) 88.1 63.9 60.1 54.0 - 60.0 60.0 Linseed OilI Volume (thousand metric tons) 25.5 25.7 17.7 18.1 -2/ 25.0 25.0 Value (millions US$) 8.4 5.8 4.3 h.1 - 6.0 6.0 Price (US$ per ton) 329.4 225.7 242.9 226.5 - 230.0 230.0 Raw Wool Voluie (thousand metric tons) .5.2 27.9 58.7 35.1 - 72.0 77.0 Value (millions US$) 91.0 44.0 63.4 34.4 50.0 100.0 107.0 Price (US$ per ton) 1,679.0 1,577.0 1,080.0 980.0 - 1,389.0 1,389.0 Wool Tops Volurrie (thousand metric tons) 11.0 7.3 10.0 12.3 - 13.0 14.0 Value (ntlllions US$) 30.2 19.9 17.0 19.9 21.7 31.0 33.0 Price (US$ per ton) 2,745.0 2,726.0 1,7C0.0 1, 618.0 - 2,337.0 2,337.0 TOTAL: Value 206.5 117.4 125.4 89.9 113.6 218.0 239,0 OTHER EXPORTS: Value 19.6 10.7 13.2 8.o 16.h 20.0 22.0 TOTAL EXPORTS: Value 226.1 128.1 138.6 97.9 130.0 238.0 261.0 P _LJrUflmary. -/ Yot availatb separatel.y. Inc"luded with other exports. STATISTU1AL APFUDIX Table No. 1 External Public Debt Outstanding, Including Undisbursed as of June 30, 1960 2 External Public Debt, 1959 and Projections 1960-1970 3 Geographical Distribution and Average Yearly Output in Stockraising and Agriculture, 1956-58 4 Agricultural Production, 1955-1959 5 Agriculture, Acreages under Cultivation and Volume of Production, 1940-1959. 6 Yields of Main Crops, 1933-1959 7 Cattle and Sheep Bought by Packing Houses, 1952-1959 8 Industrial Activity, 1958 9 Industrial Establishments by Size, 1958 10 Capital Invested in Manufacturing, 1946-1957 11 State Industrial Enterprises, 1958 12 Price Indexes, 1950-1960 13 Money Supply, 1956-1960 14 Total Bank Credit, 1956-1960 15 Bank of the Republic Credit, 1956-1960 16 Commercial Banks. Main Assets and Liabilities, 1956-1960 17 Fublic Sector Finance, 1959 18 Fiscal Position 1952-60 and Projection to 1963 19 Central Government Revenues by Type, 1958-60 and Budget Projections to 1963 20 Centra Government "Oun--n ExpenUdAiJ~1 tre 95BU60 and Budget Projections to 1963 21 Balance of Payments, 1953-59 22 Imports by Principal Commodities, 1952/Y5/58/19 24 Exports by Principal Commodities, 1952-1959 25 Exports to Major Countries, 1952-59 Table 1: EXTERNAL PUBLIC DEBT OUTSTANDING, INCLUDING UNDISBURSI AS OF JUNE 30, 1960 (In millions of U.S. dollar equivalents) Chit-standinpr including Undisbursed. Bonds 60.8-a/ IBRD loans 61.4 10.3 U.S. Government loans 12.0 7.3 Bonds, privately placed 0.3 - External Debt Repayable in Local Currency 23.2 20.3 ICA Loans 21.7 18.7 DLF Loans 1.5 1.6 NOTE Exchange rates: LB. 1 = $2.80; Sw.Fr. 1 $ .23170 a/ Of this amount, the equivalent of $11.3 was held internally as of June 30, 1960. Table 2: EXTERNAL PUBLIC DEBT, 1959 AND PROJECTIONS 1960-1970 (In millions of U.S. dollar equivalents) nebt nutstanding, including Undisbursed Publicly U.S. Total Tsued TBRD Gov't Debt Amorti- Total Bonds loans loans Other Service Interest zation 1959 131.2 66.1 57.2 6.0 1.7 11.4 4.7 6.7 Projections 1960 134.5a/ 60.8 61.4 12.0 0.3 11.1 5.1 6.0 1961 131.3 59.1 60.S 11.6 0.2 12.0 5.6 6.4 1962 124.o 55.1 58.2 10.7 - 11.7 5.0 6.7 1963 116.2 50.8 55.5 9.8 - 11.8 4.6 7.2 1964 108.0 46.4 52.6 9.0 - 12.2 4.3 7.9 1965 99.0 41.7 49.2 8.1 - 12.4 3.9 8.5 1970 54.5 19.1 29.5 5.9 - 10.1 2.2 7.9 a/ The amount outstanding shown for 1960 is as of June 30; payments shown are for the full year 1960. SOURCE: IBRD Economic Staff. Table_3: GEOGRAPHICAL DISTRIBUTION AND AVERAGE YEARLY OUTPUT IN STOCKRAISING AND AGRICULTURE, 1956-58. Markc Tons Approximate geographic location 1000no) of activity Wool 90 Spread over nearly the whole country with the exception of coastal departments devoted to intensive crcn-farmino (CO.ONTA SAN JOS7 CANE1ONES, MALDONADO). Mutton 80 Same as wool. (livpstonk weight at the market level) Beef 380 Distributed throughout the country with (livestok weight dinqer wainCn+oition in +.he northern at the market level) departments the remotest ones from the sce4Ae (APTTI'A. DTIT 7*P TArTTAPTPMpn CERRO LARGO). Milk 600 Particularly in the center departments IWT An -c T)TTDTA P7n MA r TTA DMDr N I TU -- 4%d 1,4A.Llle y uncenuaued on tne western oreUr- line (COLONIA, SORIANO, RIO NEGRO, DA VCa A nTT1 I.M.- - -LL 'JMI'J IJ IdecJLan-Ly croIps Lesser concntra -iEiLdd0J-nil bt- 11U -WUt- IreL 1- large production in the departments near IlUlJVlVLU UZLl bVIoD '0'l U0im). Sugar 3Vv Canes in the nortun trupical area, beets in crop-rotation in the western areas or alternatig wiLn r-tner seconaary crops along the coastal line. Fruit and vegetables 400 Mainly around MONTEVIDEO (CANELONES, SANv jun,, and to a lesser extent around. SALTO). RTTR(T* pner+.tnf thp Frnh Trannort Mission (Sofrerail). 1959. Vol- 1, p. 9. Table 4: AGRICULTURAIL PRODUCTION, 1955-1959. Production /l /2 Acreage (Thousands of Metric Ton,s) (Thotisands of Hectares) Grains 1 92 1271 197 what 832 589 598 360 21h 788 689 778 691 296 Corn 209 168 324 331 Rice 66 57 19 19 Oats 37 56 52 32 23 50 83 ia 90 38 Barley 5 10 9 8 9 11 11 16 13 Barley (beer) 22 34 22 16 26 25 50 28 i 4o Alpiste and Rye 2 7 1 2 1 5 14 4 5 3 Industrial Crops .55]L 553 334 383 Linseed 49 72 73 72 48 110 135 Sunflower 80 79 183 209 167 118 72 Pearnuts 6 7 8 9 Sugar beet 152 158 7 11 Sugar cane 75 106 h h Grapes 111 130 18 12 Otler 1 1 3 3 Truck Crops 335 357 83 23 Potatoes 68 73 18 25 Siveet Potatces hh 5;8 10 12 Vegetabies 100 101 18 19 Fresh f±ruits 123 125 37 37 TOTAL 2,059 1,831 1,638 1,673 /2 First estimate, 3 -cs not add up due to error in source. SCURCEr,: Ministry cf Agriculture. p I C A 0-DTrTTTUTTDr A rDTA rTQ TTTVD rTTT TTA PTrT\T 1CLU..L .) * Aj±LJA U.LI U L U~ l J 1JU.L Ui14J-' I J±LV1 j.JAi AND VOLUME OF PRODUCTION, 1940-1959. Total Grains/l Industrial Total Per-Capita r_ A') L I L % J ' CLO. U..y4 - UU 1940 1094 794 300 100 100 1941/45 937 713 224 101 96 1946/50 1085 757 328 108 98 1951/55 1399 1025 374 133 116 1956 1555 1221 334 137 116 1957 1581 1197 383 140 118 SOURCE: Ministry of Agriculture. /1 Includes wheat, corn, rice, oats, barley, rye and birdseed. /2 Includes linseed, sunflower, peanuts, sugar beet, grapes and tobacco. In r'Pnt. va-r area unier +.uk cron not incluem in +M +nkl- has been about 85,000 Hs., or 5% of land used for all crops. Table- 4* VT'MTT)q () MATTM nw)cz 'iozq-i0o Wheat Linseed Oats Barley Pearl Bird- Barley seed (kilogram per hectare) A Average ~~l91 -)U - N2 1938-42 706 o 5 757 330 40u 1948-52 881 532 578 774 780 9) 1953-57 1016 536 726 923 807 506 1957-58 768 438 432 835 791 373 1958-59 521 610 366 538 316 388 SOURCE: Ministry of Agriculture. p. 1 . PA- 1r t' A 'T) QLUT'D D,'T rMTT MV TA rVTTxUA'- UOTTQ'7 1 o 1C O Cattle Sheep Number Weight Number Weight (000) (Thousand metric (Thousand me- -tons) trir tons) 195 2 76 289 6/712 1953 880 349 353 16 1954 553 210 254 11 1955 522 210 585 26 1956 628 258 542 22 1957 469 174 246 10 1958 296 119 99 5 1959 352 143 46 2 SOURCE: Ministry of Finance. Table 8: EUSTRIAL ACT--li 3 50u Establish- Employment Output ments Total Employees Workers Value > (number) (Thousands) (mill. pesos) Total 32,'06 263,,1 43.2 219.9 3i906 100.0 Food 4,825 41.8 8.4 33.5 927 23.7 Beverages 1,175 1000 2.2 7.8 295 7.6 Tobacco 30 1.0 0.2 0,8 76 1.9 Textiles 566 25.8 2.9 22.9 460 11.8 Clothing 3,987 19.2 2.2 17,0 19L 149 Forestry products 1,667 5.7 0.3 5.4 61 16 Furniture 1,085 4.9 0.3 4.6 44 1.1 Paper and cardboard 88 3.0 0.5 2.5 64 1.7 Printing 520 6.3 1.7 4.6 99 2.6 Leather 369 2.7 03 2.4 41 1.0 Rubber 312 3.5 0.8 2.7 86 2.2 Chemicals 6041 8.2 2.8 5.4 217 5.7 Petroleum and Coal 36 4.2 1.2 3.0 145 3.7 Construction Materials 1J_33 10.3 1.1 9.2 1h2 3.6 Foundries and metal plating 91 1.8 0.2 1.6 36 0.9 Metals 2.155 8.6 0.9 7.7 103 2.6 Mechanical industries 466 5.2 0.8 4.4 56 l14 Elantim-al na+io 1.116 7-7 1.5 6-2 117 2.9 Transport Equipment 31434 14.7 1.6 13.1 109 2,8 Construction 'IQ7 39. 290 36.4 295( Electricity, Water, Gas 364 13.3 3.7 9.6 154 3.9 Other 3 ni 914o 6.7 19Q9 IA8 hA Tn'kln 0 * T RT.TAT. TA"T.T.TTrYrP. RT7. 10<R I ot- a OJJ-.Lz in1 /0 01 Uoud.-1 Industry number of 1-4 1-19 over 20 establishments workers workers workers TOTAL 15,907 19 62 38 Mining 17 - - 100 Food products 1,150 37 85 15 Beverages 434 72 96 4 Tobacco 26 - 64 3L Textiles 516 13 37 63 Clothing 2,751 22 70 30 Wood products 774 23 68 32 Furniture 830 16 76 24 Paper 78 - 27 73 Printing 342 18 67 33 Leather 257 - 53 47 Rubber 151 - 17 83 Chemicals 497 10 58 h2 Construction matrials 442 15 53 47 Smelting a-d lamination 81 22 78 22 Metallurgy 1,021 13 62 38 Mechanical metallurgy 310 12 45 55 Electrotechiical 683 - 36 6 Transport 1.,495 - 29 71 Plastics 1,044 12 43 67 Construction 2,978 28 76 34 SOURCE: Ministry of Industry and Works. Bank of the Republic. Table 10: CAPITAL INVESTED IN MUNUFACTURING, 1946-1957 Fixed Ci-11ating Total Year to -'ea Assets Capital change (millions of pesos, 19L8 prices) .946 218,4 103.3 321o7 - -I nk7 nf0.8 -ZI. 1 198 329.4 137.8 467.2 12,8 9 363nk I /1I.0 1110 . 'L4y -)u -:) 4 _)U O * 0 ') 1950 421.7 166.4 588.1 11.4 1.951 45o.8 177.0 627.8 10.7 102 9 14 66.7 10.5 1953 511.1 187.9 699.0 10.6 -1.94 $.1134.2 679.3 -3.9 1955 521.0 152.8 673,8 -o.8 1956 552.1 139.4 691.5 10.3 1957 488.8 148.5 637.3 -7.8 SOURCE: Desarrollo Industrial del Uruguay. Mario Bucheli. Based on tax declaration by a samiple of enterprises acconting for about 70% of the capital invested in industry in 1955/58. Table 11: 6TATE INJUbTUAL ElvT te, Ly>o. Capital Value of investea Output (millions of pesos) (in 1000) Monopolistic enterprises 388.1 436.4 20.3 Food 5.7 78.5 1.1 Beverages 39.3 118.0 2.6 Electric Power 281.0 100.2 12.6 Petroleum 62.1 139.7 4.0 Competition enterprises 203.3 167.6 23.1 Food 81.4 101.0 5.8 Beverages - - - Clothing 0.1 0.1 - Printine 2.9 32 0.3 Chemicals 2.3 3.0 0.4 Construction materials 1).8 10.0 0Jh Metallurgy - Mechanical Mvaetllurgy 9_I__ 19 Transportation 5o.5 7.7 4.6 Irri niIC ril I-,tris P0q n-- Construction 48.8 37.4 10, TmAT 'o1 . Kn. 1. SOURCE: Mario Bucheli. Desarrollo Industrial del Uruguay. Montevideo, 1960. Table 12: PRICE INDEXES, 1950 - 1960 Percentage Changes Wnole- uost or CosT of' Wnole- of' LLving sale /3 Living Living sale JDC D-LM 12 Prices-- Bank Prices Personne Personnel _ _ _ _ P 70 7 (December 1953 = 100) December 1950 6 97 December 1951 82 111 20.6 12.1 December 1952 92 103 12.2 - 7.2 December 1953 100 100 100 8.6 6.9 December 1954 100 109 ill .U OU 11. U December 1955 119 121 106 10.2 11.0 - 4.5 December 1956 126 130 128 5.8 7.4 20.1 December 1957 150 151 134 19.1 16.2 4.7 December 1958 179 178 190 19.3 17.9 41.8 December 1959 267 259 322 49.2 14.6 69.5 1960 January 274 344 2.6 6.8 February 286 388 4.4 12.8 March 280 403 -2.1 3.9 April 286 426 2.1 $.7 May 292 434 2.1 1.9 June 305 434 4.5 - July 311 291 438 2.0 12.4 .9 August 334 438 7.4 - September 350 L33 1.8 -1.1 October 358 2.3 November 338 -5.6 /1 Ministry of Finance. Refers to lower income Prouos. /2 Used for salary adiustments. Fieures do not refer to December of each indicated year but to January 15 of the following. L3 Bank of the Republic. Unpublished. Total index is an unweighted geometric mean of' componePnt. andj subg-roup jndjP-q Tabl :13: M,IONY SUPPLY, 196 - 1960. Total Currency Demand Deposits Money in Bank of the Republic Supply Circula- Total Treasury State Other Private tion Enter- Banks prises (millions of pesos) December 1956 1,083 514 308 159 27 122 261 December l97 1, 12 552 311 1h9 16 146 289 December 1958 1,472 709 350 157 21 173 413 January 2o258 u72 729 34 o2 333 65u February 2,324 885 753 323 82 347 686 'larcn 6onvo oL a u p ay Mrc 20L86 859 933 530 83 319 6L April 2,622 882 1,023 610 94 320 717 1ay 2.(01 879 1,133 639 111 383 739 June 2,871 893 1,229 677 110 442 748 July 2,989 887 1,34 7U 125 473 754 August 3,015 877 1,388 795 129 463 750 September 3,o8 932 1,309 728 143 439 767 October 3,028 961 1,288 741 102 445 779 SouCE: Bank of the Republic. Table 14: TOTAL BANK CREDIT, 1956-1960 Bank Credit Total To Public Credit to Private Sector Bank Sector Total Bank of Private Credit (B.of the R,) the Republic Banks (Millions of pesos) December 1956 2,191 368 1,823 568 1,255 December 1947 2.9ho 399 2.lbl 688 1. h3 December 1958 3.089 b12 2,677 781 i, 896 DPcem"hr 1QQ 3802 )123 3,379 950 2,A2Q January 3,843 391 3,452 974 2,478 February 3,860 388 3,472 1,C05 2,67 March 3,948 401 3,547 1,051 2,496 April 4,4 22 3,726 1,8 ,4 May 4,202 431 3,771 1,119 2,652 July 4,300 472 3,828 1,200 2,628 August 4,452 520 3,932 1,266 2.666 September 4,539 508 4,131 1,329 2,802 cte 466Q In l490R 47 -D,35-7 2,2 SOURCE: Bank of the Republic. Table 15: BANK OF THE REPUBLIC CREDIT, 1956-1960. To Public nd_priv-ate Sectors To Bank:ing Systen (Rediscounts) ndi f Period Total Public Sector riva Totae Net redit Gredit Deposits Sector Banks Bank (millions of pesos) December 1956 769 201 368 167 568 197 197 December 1957 942 254 399 1145 688 214 197 17 December 1958 1,038 257 412 155 781 318 294 2 4 December 1959 1,018 68 423 355 950 378 342 24 1960 January 998 24 391 367 974 398 367 31 February 1,017 12 388 376 1,005 378 359 19 March 868 -183 401 584 1,051 378 365 13 April 827 -257 422 673 1,084 397 387 10 May 833 -286 431 717 1,119 392 388 4 June 897 -264 488 752 1,161 374 374 - July 833 -367 472 839 1,200 388 387 1 August 898 -368 520 888 1,266 387 383 4 September 1,003 -326 508 8-34 1,329 392 384 8 October 1,041 -316 490 806 1,357 394 382 12 SOURCE: Bank cf the Republic. Table 16: ODMIPIERCIAL BANKS. MAIN ASSETS AND LIABILITIES, 1956-1960. End of/ Currency Credit to Deposits 'Capital Credit PeriodL and deposits in Private Total Demand Time and from Central Central Sector depocits depos its Reserves Bank Ban: (In millions of pesos) December 1956 136 1, 255 895 261 634 22.4 197 December 1957 159 1, 453 l,oo 289 711 249 197 December 1958 193 1,896 1., 258 413 845 286 294 December 1959 283 2,129 1,6 644 625 1,019 348 342 1960 January 338 2,478 1,681 653 1,023 359 367 February 372 2,L67 1,70t 686 1,018 368 359 March 345 2,496 1,713 696, 1,019 376 365 April 338 2,642 1,7514 717 1,037 387 387 May 384 2,652 1,813 739 1,07D 396 388 June 455 2,622 1, 852 748 1,104 403 374 July 692 2,628 1,888 751 1,13 )413 387 August 473 2,666 1,889 750 1,139 418 383 September 478 2,802 1,919 767 1,152 7429 384 October 497 2,821 1,9514 779 1,175 438 382 l Totals are not homogeneous since for some series only monthly averages are available. SOURCE: Ba:nk of the Republic. Table 17: PUBLIC SECTOR FINANCE, 1959 Central Departments Autonomous Extra Total budget- Government and Enterprises and bary Municipalities Decentralized Services e,Penses (Millions of pesos) Total Revenues 23th2.6 89900 211.0 510.0 822.4 Of dhich Taxes (,040.6) (720.0) (112.0) (34.6) (174.0) .Import taxes 60.3 53.0 1.6 5.7 Consumption taxes 236.0 16.o 3.4 5.7 70.9 Business taxes 293.6 255.0 0.1 17.1 21.4 Real Estate taxes 173.5 46.0 84.7 5.1 37.7 Other taxes 277.2 210,0 23.8 5.1 38.3 Sale of Services 559.2 61.0 47.6 450.2 0.4 Workers Contribution to Social Sec. Agencies 293.1 - 293.1 State Contribution to Social Sec. Agencies 292.2 - 292.2 Refunds from Public SectorL1 99-0 99.0 -- - Other Revenue 158.3 19.0 51.4 25.2 62.7 Total Expenditures 2 273.0 812.5 211.0 510.0 709.5 Current 1,148.6 529.4 173,0 427.0 19.2 Transfer Payments 867-3 224.0 23.0 620.3 Capital Expenditures 148.3 - 15.0 83.0 50.3 Unclassified 108.8 89.1 - 19.7 Surplus or Deficit (-) 169.4 56.5 112.9 /1 overs duplications arising from the circumstane that. certain Poverniment payments go to agencies or branches of the Central Government. '3OURME: Ministry of Finance. Table 18: FISCAL POSITION 1952-60 AND PROJECTION TO 1963. (Estimate) (Projections) (Millions of pesos) Central Government Revenues 322.9 31..9 453.6 477.5 517.2 66469 698.5 899.2 1,475 2,163 2,327 2,580 Expenditures 355.6 412.8 503.4 505.1 515.4 709..2 789,.2 841./1 1,347 2,007 2,189 2i247 Deficit or Surplus -32.7 -70.9 -49.8 -27.6 1.8 -44.3 -90.7 57.7 128 156 138 333 Exchange Profit and Retention Funds Revenues 54.9 52.8 57.7 39.0 56.7 14,.8 9.4 10,0 Expenditures 68.7 57.2 70.3 101.8 94.4 49.5 29.4 3040 Deficit or Surplus -13.8 -4.4 -12.6 -62.8 -37.7 -34.,7 -20.0 -20X0 Official Agencies - - - - - - - 337.2 590.3 625.o 641.2 Deficit or Surplus -26.2 -21.8 -41.3 -8.8 -5.9 -17.6 -12.0 - Total Deficit or Surplus 72.7 97.1 103.7 99.2 41,8 96.6 122.7 37,7 /1 Covers period Jan-Nov. 1960. Included Import Surcharges as well as export retentions. SOURCE: National Association of Banks. Based on official. data. Data for 1960-63 are from Ministry of Finance. Table 19: CENTRAL GOVERNMENT REVENUES BY TYPE, 1958-60 AID BUDGET PROJECTIONS TO 1963. 1958 1959 1960 1961 1962 1963 (In millions of- pesos) Taxes 532 720 23.'56 0858 29_8 Customs and other import duties 3> 103 174 209 230 Consumption and excise. taxes 122 156 197 331 397 436 Sales tax and other business taxes 191 255 385 551 598 671 Real Estate taxes 22 29 32 44 53 58 Inheritance and other taxes on transfers of property 55 8L 112 148 178 196 Stanip taxes 59 79 132 206 247 272 Income Tax - - - 12 80 130 Other taxes h 67 57 80 96 105 Fees 15 16 2:1 38 45 50 State Domain 46 h5 43 79 87 92 Contributioris State Entities 19 1 13 Lottery and Casinos ) 27 30 31 40 48 53 Other ) ) 2 4 4 4 Other Revenues 17 18 202 315 17 150 Surplus previous budget - - 40 100 - - Retention Fund - - 100 100 100 100 Gold Revaluation Profit - -40 - - Import Surcharges - - - 72 - - Other 17 18 22 43 h7 50 Refunds from Public Sector 0 99 186 186 190 190 Budgetary 53 56 Public Debt Service 37 42 Other - 1 TOTAL REVENTES 701 899 1,475 2,163 2,328 2,580 SOURCE: i.nistry of Finince. Table 20: CENTRAL GOVERNMENT GURRENT EXPENDITURES 1958-60 AND BUDGET PRoJECTIONS TO 1963. Projections 1958 19,59 1960 1961 1962 1963 (stimate) (Millions of pesos) Parliament 10.7 12.2 - - -- Executive Branch Presidency 1.5 1.6 2.5 3.6 h.o 4.1 Defens e 73.3 73.3 117.0 186.4 199.7 202.0 Finance 32.7 32.3 46.6 65.0 76.8 83.6 Industry and Labor 20.'3 19. 27.4 38.8 hh.1 h6.7 Education and Social Security 31.5 31.0 40.h 6h.3 69.9 72.9 Interior 53.3 52.8 88.7 106.1 117.7 1:18.7 Public Works 9.8 9.6 13.6 23.7 27.3 28.6 Foreign Re.labions 4.3 h.3 5.8 41.8 43.h 4h.1 Public Health 66.3 67.1 89.0 155.7 179.6 190.2 Agriculture 13.3 13.2 18.5 31.2 36.0 .38.0 Judiciary 12.6 12.1 16.7 27 .6 33.5 35.1 Autonomous Agencies 200.9 213.2 337.3 590.5 625.0 612.1 General Services and lisc. 258.7 299.h Shh.o 671.9 732.6 741.5 .TOTAL 789.2 841.5 1,347i.4 2?06.9 2189.4 . 2 4 Of which Wages and salaries 328.3 330.9 621.8 929.3 l,037.9 1,079.2 .Purclhases of goods 42.9 44.1 118.0 192.1 233.8 231.4 Public Debt Service and State Pensions 202.8 223.9 270.3 294.7 2914.7 294.7 Support of: Nat. Council of Primary Educ. 69.9 69.6 87.5 204.7 2014.7 204.7 Nat. Council of Secondary " 33.2 33.2 45.3 90.6 108.0 110.5 Universities h.1 46.6 60.1 145.7 157.0 170.7 Other 68.0 93.2 144,4 149.5 153.3 156.2 SOURCE: Ministry of Finan,e, Table 21: BALAXaCE OF PAYMEPNTS, 1953-59 1953 1P54 1955 1956 1957 1958 1959 (Millions of U. S. dollars) P1. Merladise kLcount -2 -3 5 -9 -72 Exports, f. o. b,. 270 2149 183 211 128 139 98 Imports, c. i. f. 194 274 226 206 226 134 170 II. Service and Donations Account -8 .-9 -8 -6 2 21 Travel 2 1 1 2 10 14 22 Transport and Insurance - 1 i - 1 Investment Income .5 -5 -5 -5 -5 -h -3 Donations -2 -2 -2 -2 -2 -2 3 Government and Miscellaneous -3 ..3 -2 -2 -2 -3 -2 III. Capital Account, Excluding Official Reserves and Official Short-term Capital. -2 .2 -4 18 -1 1 2 Private long-term capital - - -10 20 - . - Private short-term capital -9 -.9 - - -. .. Official long-term capital 7 7 -4 -2 -1 1 2 Loans utilized (11) (12) (1) (5) (8) (7) 8) Amortization (-4) (-5) (-5) (-7) (-6) (-6) (-6) Other - - - - (-3) - - IV. Errors and Omissions -2 -6 -13 -1 32 16 15 V. Official Reserves and Short-term Capital Movements 6 -142 16 -65 -5 -34 Bilateral Payments Agreement 29 -52 -23 38 -22 -2h -28 Other short-term capital 14 10 -43 7 -36 20 - 7 Monetary gold 21 - -12 -29 - 7 - 1 1 Note. Import figures for 1955 to 1958 are subject to change as a result of an adjustment required in the value of petroleum imports erroneously recorded in those years. SOURCE: Bank of the Republic. Table 22: IMPORTS BY PRINCIPAL 00MMODITIES, 1952/55/58/59 GROUP 1952 1955 .1958 1959 (In of total) Raw naterials 27.5 32.4 41.7 38.2 0ombustibles and lubricants 13.2 11.8 21.5 36.0 Machinery 14.8 16.5 8.4 7.5 Autonotive vehicles 13.5 8.0 5.3 3.5 Building and construction materials 8.8 9.4 5.6 3.2 Salt ard f£oodstuffs 4.8 4.6 3.6 3.0 Electrical materials and accessories 2.2 3.4 3.4 2.0 Medicinal and pharmaceutical preparations 1.4 2.1 2.7 1.9 Fresh vegetables 2.0 1.6 1.6 led Seed, fodder, plants and trees 0.6 1.0 2.8 0.8 Metals and manufactures 2.2 1.7 0.6 0.5 Musical instruments,radios,etc. 1.2 1.2 0.5 0.5 Orthopedic, Surgical, etc. equipment 0.9 0.8 0.5 0.4 Haberdashery 3.2 2.9 0.14 0.3 Newsprint 1.2 1.0 0.3 0.3 General merchandise 0.1 0.1 0.6 0.2 Toys and school supplies 1.6 1.0 0.2 0.1 Live animals Ol 0.1 0.2 0.1 Jewelry and watches 0.6 0.3 0.1 0.1 Saddlery, shoes, etc. 0.1 0.1 * * TOTAL (in millions of dollars) 236.2 225.0 134.7 214.0 * Negligible. SOURCE: Banco Comer cial, Informacion Economica del Uruguay, June 1960. Table 23: IMPORTS FROM MAJOR COUNTRIES, 1952/55/58/55 Country 1952 1955 1958 1959 ---- --------- -i--- -- (-In 1 of tt Venezuela 6 1 5.5 13.3 26.1 United States 25.7 19.4 12.2 15.0 Brazil 7.8 16.9 18.2 10.9 France 4.1 5.0 9,0 5.7 Germany, West 8.0 7.8 4.4 5.6 Italy 2.7 4.1 4.8 3.6 United Kingdom 12.1 10.9 6.0 3.1 Rus sia -* 1.2 3.0 Switzerland 1.3 2.7 3.7 2.7 Netherlands; Antilles 0.2 1.4 3.5 2.5 Trinidad * *- 2,.5 Sweden 3.6 4.0 1.4 2.2 Finland 0.6 0.7 1.8 1.7 Netherlands 2.6 3.4 1.3 1..4 Czechoslovakia 0.4 0.6 1.0 1,3 Argentina 0.2 0.5 2.0 1.2 Chile 1.3 1.3 0.8 1.2 British Malaya 0.5 0.9 1.0 1.1 Belgium 3.7 2.7 1.2 1.0 India 1.2 1.7 1.1 0.9 Yugoslavia * * 1.6 0.9 Germany, East - 0.1 1.,5 0.8 Poland * 0.4 0.6 Paraguay 2.8 0.7 1.0 0.5 Other countries 15.1 9.7 7.6 4.5 TOTAL (in millions of dollars) 236.2 225.1 134.7 214.0 * Negligible. SOURCE: Banco Comercial, Informacion Economica del Uruguay, June 1960. Table 24: EXPORTS BY PRINCIPAL COMMODITIES, 1952-1959 GROUP ' 1952 1956 1957 7 1958 % 1959 Greasy wool 56,749 27.2 65,535 31.1 32,316 25.2 53,782 38.2 24,101 24.7 Semi-washed wool 155 0.1 78 * 23 * 37 * Washed wool 11,370 5.4 22,532 10.7 11,054 8.6 9,629 6.9 10,253 10.5 Hides and skins 23,420 11.2 15,915 7.5 11,078 8.6 9,020 6.5 10,044 10.3 Other agricultural raw materials 12,003 5.8 28,122 13.3 8,452 6.6 16,536 ll.9 4,050 4.1 Processed agricultural products 37,478 17.9 11,852 5.6 10,961 8.5 1n,64 8.4 6,586 6.7 Live cattle 1, 287 0.6 1,431 0.7 829 0.7 151 0.1 353 0.4 Extractive industries 210 0.1 368 0.2 237 0.2 U8 0.1 24 * Chemical and pharmaceu- tical products 59 * 84 *114 0.i 106 0.1 123 0.1 Other -industries 1,264 0.6 1,045 0.5 728 0.6 1,444 1.0 531 0.5 Textiles 24, 276 11.6 4.1,901 19.9 249983 19.5 a,544 15.6 23, 224 23.8 Meat and meat products 4jS18 19.5 22j 10.5 2747 214 11 lo.6 18,!0 .2 TOTAL 208,889 1,00.0 211,054 100.0 128,248 100.0 138,622 100.0 97,798 10.0 * Negligible. SOURCE: Banco Comercial , Informacion Economica del Uruguay, June 1960. Table 25: EXPDRTS TO MAJOR COUNTRIES, 1952-59 Country 1952 1953 1954 1955 1956 1957 1958 1959 (In % of total) United States 24.1 18.5 12.9 8.9 11.6 9.7 7.7 11.8 Netherlands 4.5 7.0 12.7 23.3 24.4 23.4 10.2 9.7 Germany, wlest 10.2 7.4 6.4 3.9 8.5 7.0 6.4 9.4 United Kingdom 15.9 30.9 18.5 13.5 10.0 16.1 15.2 9.3 Russia - 0.1 8.0 2.5 0.2 1.4 11.7 8.6 Hungary * * 0.4 0.6 0.4 0.2 2.1 5.6 Yugoslavia 0.1 - - 1.9 1.4 1.0 2.6 5.2 Italy 5.0 2.9 3.2 3.9 5.8 6.3 3.2 4.3 Czechoslovakia 0.5 0.2 0.7 1.3 1.6 2.1 3.1 3.5 Finland 0.1 0.2 0.6 1.2 1.4 0.6 1.9 3.4 Switzerland 1.3 3.1 2.1 2.7 3.2 3.7 4.3 3.3 Bulgaria - - - - * 0.1 0.6 2.9 Poland 0.1 0.1 0.4 1.2 0.6 1.0 1.0 2,9 France 8.7 6.5 5.0 5.4 6.3 3.4 7.4 2.19 China - - - 0.1 2.0 0.7 2.8 Spain 0.6 - * 0.2 0.1 1.8 3.9 2,0 Belgium 3.0 4.5 1.8 2.3 1.5 2.3 1.0 2,0 Brazil 12.0 3.5 13.8 14.3 11.3 6.9 6.5 1.4 Germany, East - - - - 0.8 1.3 1.6 1.,2 Other Countries 13.9 15.1 13.5 12.9 10.8 9.7 8.9 7.,8 TOTAL (in millions of dollars) 208.9 269.8 249.0 183.7 21-1.1 128.2 138.6 97,.8 * Negligible. SOURCE: Banco Comercial, Informacion Economica del Uruguay, June 1960.