Despite Uruguay's basically agricultural-pastoral economy, its dependence upon imports for most raw materials, and its lack of fuel resources, there is considerable industrialization. The processing of agricultural and animal products accounts for about half of the manufacturing activity; Fray Bentos and Paysandú are noted for their meat-freezing and canning plants. Meat, wool, and hides and skins constitute the majority of Uruguay's exports. Other manufactures include beverages, textiles, construction and building materials, chemicals, and petroleum and coal derivatives. A large refinery near Montevideo processes imported crude oil. Marble, stone, and granite were long thought to be the only important mineral resources, but bauxite has become a significant resource. There are important hydroelectric plants on the Uruguay and Negro rivers. Fishing and forestry add to the country's economy.
Uruguay's magnificent beaches, such as those at Punta del Este, are great economic assets; tourists, chiefly vacationing Argentines, contribute much to the national income. The country's transportation facilities are extensively developed. The state owns the railroad, as well as the power, telephone, oil refining, and other industries; about 20% of the workers are on the government payroll. Brazil, Argentina, the United States, and the European Union nations are the main trading partners. …
