Two concerns dominated Uruguay's foreign economic relations during the 1980s. The first, both a fiscal and an external problem, was the foreign debt. Uruguay's external debt of about US$6.7 billion (US$6.2 of this was foreign debt to the United States) in 1989 (US$4.2 billion belonging to the public sector) was not an issue affecting international financial markets, like the much larger debt burdens of Brazil or Mexico (each over US$100 billion). Even so, Uruguay's indebtedness was onerous in comparison with the size of its economy and was one of the highest per capita debts in the region. For both the Sanguinetti and the Lacalle governments, debt reduction and debt rescheduling were priorities.
The second major concern was trade, primarily for its importance to overall economic growth. Trade-related activities were responsible for about 12 percent of GDP in 1988. Exports, which were the source of Uruguay's wealth in the early twentieth century, were seen as the key to the revival of the economy. Demand within Uruguay was simply too small to support large production increases. Trade was especially important in the 1980s because of the debt burden. In order to make payments on mostly dollar-denominated loans, Uruguay needed foreign exchange (dollars). Thus, the trade balance (the difference in value between exports and imports) took on added significance. To spur economic growth and to earn foreign exchange, Uruguay joined other Latin American nations in restraining imports and augmenting exports. Despite its positive trade balance, however, Uruguay's foreign debt continued to increase.
Data as of December 1990