Uruguay : The Rural Sector and Natural Resources, Volume 1. Main Report

Abstract

The report reviews the macroeconomic
 perspectives of Uruguay, focused on its rural development
 and natural resources intensive sectors, to form the basis
 for expanding agricultural production, and increasing
 productivity. It reviews the country's sectoral
 composition, exports of natural resource intensive products,
 and labor and capital use, as well as the tax burden.
 Although agriculture represents less than ten percent of the
 gross domestic product (GDP) of Uruguay, the combination of
 agriculture, and agro-industry makes up twenty three percent
 of GDP, of which half of the output is exported, which
 represented in 2000, seventy three percent of the
 country's total export earnings, with the composition
 of exports, significantly diversified. Nonetheless, the
 agricultural sector remains vulnerable to both external
 shocks, and domestic factors, and, while the
 government's ability to ameliorate the impacts of these
 shocks is limited, the likely increasing importance of
 international trade calls for a long-term approach to
 agricultural, and agro-industrial development. Regarding the
 socioeconomic dimensions of the rural economy, its income
 distribution is the least-skewed in the region, but,
 regardless of the relatively small number of rural poor -
 highly dependent on wage labor - given the high levels of
 literacy, future efforts should be oriented towards
 improving secondary, and technical education. Although the
 agricultural sector has demonstrated a capacity to innovate
 by adopting technology, and diversifying both production,
 and markets, production expansion, and productivity increase
 must be compatible with the protection, and conservation of
 its natural resource base, with a supportive public
 framework in promoting rural areas, encouraged by the
 private sector.