MercoPress. South Atlantic News Agency

Almost a quarter of Uruguay's population is poor

Following almost five years of economic stagnation and a financial crisis which put the banking system on the verge of collapse, Uruguay has an estimated 870,000 people (24,4%) out of a population of 3,4 million catalogued as poor in the country.

According to the Uruguayan Statistics Institute, INE, the 2004 figure is 20,500 higher than in 2003 and apparently the situation has not improved much in spite of the recovery of the economy last year which expanded 12,6% compared to 2,2% in 2003.

Of the 870,000 poor, an estimated 108,000 are indigent which means they don't have the sufficient resources to cover their very basic needs, among which 25,800 children below the age of 12.

The Uruguayan economy began contracting in 1999 (following the massive Brazilian currency devaluation in January that year) until it reached a negative climax of 11% in 2002 as a direct consequence of the Argentine default and melting of the neighbouring country's economy.

However the growth rate of poverty has began to decline, since last year it expanded 2,4% while in 2003, 31,6% and in 2002, 26,7%.

The new left wing government of Tabare Vazquez is implementing an "emergency plan" for the 870,000 poor that once it begins to roll should distribute 50 US dollars monthly per head of family in exchange for community work or services and if they have children ensuring they are sent to school and receive medical attention.

So far the plan is in the registration stage and is expected to begin moving June. The annual outlay is estimated in 100 million US dollars.

Uruguay still faces a fragile economic situation since foreign debt currently at 13,2 billion US dollars is equivalent to 90% of GDP and is forced to repay 1,5 billion US dollars to multilateral organizations in 2005 and 2006.

Economy Minister Danilo Astori forecasted a 6% expansion this year with primary budget surplus of 3,5% of GDP; 3,7% in 2006 and 4% in 2007. Mr. Astori promised a "rigorous fiscal policy" in the next five years and anticipates that the Debt/GDP ratio will drop from 90 to 60% in five years.