With Christopher Columbus’ discovery of the Americas ushering in Spanish colonialism through much of the Americas, Spanish explorers arrived in the sparsely-populated South American country now known as Uruguay in 1516. Initial resistance from indigenous groups prevented the Spaniards from settling in that country until the early 1600s (when cattle was introduced there). Although no major deposits of gold were found in Uruguay, the Spanish colonists still found use of that territory as a military stronghold and natural harbor (in part to limit Portuguese penetration of that part of South America beyond neighboring Brazil).
Spanish rule over Uruguay was consolidated in 1776 – when the Spanish crown established the Viceroyalty of the Rio de la Plata that year. With that viceroyalty consisting of present-day Argentina and neighboring Uruguay, Paraguay and portions of Bolivia, the port city of Montevideo competed with nearby Buenos Aires (Argentina) as a major commercial center in that part of South America.
Because of Uruguay’s efforts to revolt against Spain during the 1810s (with Spanish forces being driven out of that country in 1811), nearby Portuguese Brazil (which didn’t want locals in that country to rebel against the Portuguese crown), annexed Uruguay in 1821. Further battles between locals and the Portuguese invaders eventually led to Uruguay being a free country in 1828 (with help from England). Much of the 19th century consisted in periodic battles being waged between two factions: the conservative Blancos (“Whites”) versus the Colorados (“Reds”), with occasional involvement of nearby Argentine forces. Interestingly, Italian independence leader Giuseppe Garibaldi was living in Uruguay during the 1840s, and eventually became a military leader for that country (winning victories in Uruguay’s behalf in 1846).
By the 1870s, Uruguay, like Argentina, went through a wave of unprecedented European immigration (spurred in part by the country’s economic growth, especially in agriculture). With Uruguay’s capital (Montevideo) becoming an entrepot for goods from Argentina, Brazil and Paraguay (due to its natural harbor), the country’s population rose to nearby 438,000 residents by 1879. Much of that immigration came from Spain and Italy. Along with a rising Italian middle class in Montevideo, trade between Uruguay and Italy itself also increased.
With Uruguay’s government putting forth political and economic reforms during the early 20th century, it went through economic ups and downs during the 1950s (due to lowered demands for agricultural goods). In 1968, due to rising political unrest in the country (with an urban guerrilla group, known as the Tupamaros, operating at the time), a state of emergency was declared, with a further suspension of civil liberties implemented by the Uruguayan government in 1972, and a military seizure of power a year after.
Further political tensions took place from that time into the early 1980s – at one point Uruguay became known for having the highest per capita percentage of political prisoners in the world. 1984 was the country’s turning point, when a return to civilian rule resulted in Colorado Party leader Julio María Sanguinetti winning the presidency, and carrying out a series of economic reforms and democratization policies. Sanguinetti’s efforts to attract foreign trade and capital had some success for the country – which created an environment for carrying out political reconciliation policies, resulting in amnesty for military leaders accused of human rights abuses, and the release of former guerrillas.
In 1991, Uruguay’s road to trade liberalization led to its inclusion in the Southern Common Market (Mercosur) – which formalized a free trade system between that country and Argentina, Brazil, Paraguay, Bolivia, and Venezuela. With political stability achieved in recent times, and economic growth since 2010 (growth in real GDP varying between 8.5% in 2010 and 4% after 2011), Uruguay has increasingly become a popular tourist destination within the Southern Cone states of South America (with the seaside enclave of Punta del Este attracting middle and upper class visitors from these countries and elsewhere).
By 2010, tourism represented 6% of the country’s GDP, with further increases expected in the future. The number of visitors arriving in Uruguay has steadily risen from 1.8 million in 2006 to 2.4 million in 2010 (many of whom are from nearby Argentina and Brazil). By 2012, the country’s Ministry of Tourism announced that US$2 billion in tourism revenues were generated (four times the US$500 million figure from a decade ago).