Known as the 'Oriental Republic' because of its location on the eastern bank of the Rio de la Plata, Uruguay is one of the smallest of the South American republics. Parts of the territory which is now Uruguay were settled by the Spanish in the 1620s and the Portuguese in the 1680s; as a result, Uruguay became a major bone of contention between these rival European powers. The Spanish prevailed in the early 18th century, after the establishment of a settlement at San Felipe de Montevideo (which eventually became the Uruguayan capital) in 1726.

The formal creation of the Uruguayan state took place in 1828. Throughout much of this early 19th-century period, the future Uruguay was occupied by Portuguese troops from neighboring Brazil; interventions – military and otherwise – by its larger neighboring powers were to become a recurrent feature of Uruguay’s political history.

The conjunction between internal and external forces became apparent during the Great War of 1843-52, which centered on the siege of Montevideo, then under Colorado control, by Blanco forces. The war, which was eventually won by the Colorados, established the pattern whereby Argentina and Brazil became the guarantors of Uruguayan independence, with the intervention of global powers on occasion – Britain and France in the 19th century, the USA in the 20th century.

Today, the country's economic health still relies heavily on its two large neighbors and main trading partners. Although the tourism industry only brings in under US$1 billion annually, Uruguay is drawing increasingly more visitors each year, and for good reasons. The country enjoys 500km (300 miles) of fine sandy beaches on the Atlantic and the Río de la Plata, woods, hills, hot springs, hotels, casinos, art festivals and numerous opportunities for sport and entertainment.

Montevideo, the capital, contains more than half of Uruguay’s population. Located on the River Plate, which has been one of the essential elements for the development of the territory, Montevideo is also the country’s natural trading center. It is a delight for lovers of culture. Museums, theaters, exhibitions, shows, popular feasts... there is an intense agenda all year round and the city itself is a collection of art and history.

Geography
Uruguay is bordered to the north by Brazil, to the southeast by the Atlantic, and is separated from Argentina in the west and south by the River Uruguay, which widens out into the Rio de la Plata estuary. The landscape is made up of hilly meadows broken by streams and rivers. There is a string of beaches along the coast. Most of the country is grazing land for sheep and cattle. Montevideo, the most southern point of the nation, accommodates more than half of the population. About 90 per cent of the land is suitable for agriculture, although only 12 per cent is used in this way.