Uruguay - Military Spending

Military Expenditure in Uruguay increased to US$1043.90 Million in 2015 from US$851.80 Million in 2014. Military Expenditure in Uruguay averaged US$890.61 Million from 1988 until 2015, reaching an all time high of US$1094.30 Million in 1989 and a record low of US$729.20 USD Million in 2004. Uruguay spent $944,000,000 on their military in 2012, which amounted to 1.9% of the country's GDP. Since 2005, Uruguay’s National Defense budget has gradually decreased; today, military expenditure is a much lower percentage of the GDP when it was around 20 years ago.

By 2005 UN refunds equaled one third of the official budget, which for the Uruguayan military is a large sum of money. Besides, peacekeeping has allowed the military to incorporate specific material for specific duties, which have become an integral part of the military’s permanent assets upon mission completion. In this regard, had the military not deployed in peacekeeping missions, that equipment would never have been purchased by the Uruguayan government.

The defense budget for 1986 was N$Ur22.8 billion, or between US$125 million and US$150 million, depending on the source of information. The figure represented approximately 11.8 percent of total central government expenditures, down from the 12 percent to 15 percent levels sustained in the early 1980s. When measured in current pesos, military spending rose sharply during the 1979-86 period. When factoring in inflation, however, spending rose slowly during the 1977-81 period, then fell approximately 20 percent over the 1982-86 period.

The decline in real growth in the defense budget during the 1982-86 period was accompanied by a dramatic depreciation of the peso, making the dollar value of defense spending fall by some 62 percent over the period. This decline had a serious effect on military readiness by virtually precluding importation of spare parts, replacements, or modern equipment. Between 1977 and 1983, military equipment had accounted for between 0.5 and 3.7 percent of total annual imports. From 1984 to 1987, the nation imported no military supplies. As of 1990, a frigate imported in 1988 from France represented the only significant purchase of military equipment after 1983. In March 1990 the nation purchased two more frigates of the same class.

When compared with other Latin American countries, the portion of the national budget devoted to defense was above average. The military's portion of the gross national product (GNP) was about 2.4 percent in 1986, in the middle range for Latin American nations.

Until the late 1970s, the defense budget was augmented by large amounts of United States military assistance. Over the 1950-77 period, the country received nearly US$60 million of assistance in the form of grants and credits from the United States. During the 1977-78 period, however, the nation refused further assistance in response to harsh criticism from the administration of President Jimmy Carter over the military government's human rights abuses.

The United States resumed military assistance to Uruguay in 1987, after the return to civilian rule, but on a very limited level, in keeping with the overall reduction of United States security assistance worldwide. Aid during the 1987-90 period consisted of approximately US$1 million in grants intended to maintain equipment acquired from the United States. The United States also funded the education of a small number of Uruguayan military personnel at United States military facilities under the International Military Education and Training (IMET) program. IMET assistance in United States fiscal year (FY) 1990 totaled US$124,000. The United States Department of Defense's FY 1991 request totaled US$200,000.

Uruguay does not receive substantial amounts of US foreign assistance due to its relatively high level of development, but the country does receive military assistance designed to provide equipment and training to improve Uruguay’s interoperability with US and international peacekeeping forces. According to the Congressional Research Service, the United States provided Uruguay with $590,000 in International Military Education and Training (IMET) in FY 2010 and will provide an estimated $465,000 in IMET in FY 2012.

Uruguay did not export any military equipment. The domestic defense industry was very limited in scope and produced only the most basic military supplies, such as small-arms ammunition, uniforms, and stores. The only exception was the navy's shipyard, which built small patrol craft and was capable of providing drydock, overhaul, and repair support.

According to the World Bank, military expenditures data from SIPRI are derived from the NATO definition, which includes all current and capital expenditures on the armed forces, including peacekeeping forces; defense ministries and other government agencies engaged in defense projects; paramilitary forces, if these are judged to be trained and equipped for military operations; and military space activities. Such expenditures include military and civil personnel, including retirement pensions of military personnel and social services for personnel; operation and maintenance; procurement; military research and development; and military aid (in the military expenditures of the donor country).

Excluded are civil defense and current expenditures for previous military activities, such as for veterans' benefits, demobilization, conversion, and destruction of weapons. This definition cannot be applied for all countries, however, since that would require much more detailed information than is available about what is included in military budgets and off-budget military expenditure items. (For example, military budgets might or might not cover civil defense, reserves and auxiliary forces, police and paramilitary forces, dual-purpose forces such as military and civilian police, military grants in kind, pensions for military personnel, and social security contributions paid by one part of government to another.)

NATO defines defense expenditure as payments made by a national government specifically to meet the needs of its armed forces or those of Allies. A major component of defense expenditure is payments on Armed Forces financed within the Ministry of Defense (MoD) budget. Armed Forces include Land, Maritime and Air forces as well as Joint formations such as Administration and Command, Special Operations Forces, Medical Service, Logistic Command etc. In view of the differences between the NATO and national definitions, the figures shown may diverge considerably from those which are quoted by national authorities or given in national budgets.

They might also include "Other Forces" like Ministry of Interior troops, border guards, national police forces, customs, gendarmerie, carabinierie, coast guards etc. In such cases, expenditure should be included only in proportion to the forces that are trained in military tactics, are equipped as a military force, can operate under direct military authority in deployed operations, and can, realistically, be deployed outside national territory in support of a military force. Also, expenditure on Other Forces financed through the budgets of ministries other than MoD should be included in defense expenditure.

Pension payments made directly by the government to retired military and civilian employees of military departments should be included regardless of whether these payments are made from the budget of the MoD or other ministries. Expenditures for peacekeeping and humanitarian operations (paid by MoD or other ministries), the destruction of weapons, equipment and ammunition, and the costs associated with inspection and control of equipment destruction are included in defense expenditures.

Research and development (R&D) costs are to be included in defense expenditures. R&D costs should also include those for projects that do not successfully lead to production of equipment. Expenditure for the military component of mixed civilian-military activities is included, but only when this military component can be specifically accounted for or estimated. Financial assistance by one Allied country to another, specifically to support the defense effort of the recipient, should be included in the defense expenditure of the donor country and not in the defense expenditure of the receiving country. War damage payments and spending on civil defense are both excluded from the NATO definition of defense expenditure.