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Uruguay has traditionally been more affluent than other countries in South America, and is known for its advanced education and social security systems and liberal social laws.

It was the first nation in Latin America to establish a welfare state, maintained through relatively high taxes on industry, and developed a democratic tradition that earned it the sobriquet "the Switzerland of South America".

But economic and political turmoil, in particular left-wing urban guerrilla attacks in the early 1970s, led the government of the day to suspend the constitution and launch a period of repressive military rule that lasted until 1985.

Since the restoration of democratic government, successive governments have liberalised the economy. Colonial towns, beach resorts and a year-round mild climate have contributed to a growing tourist industry.
Source: BBC.com