According to the latest government figures available in 1990, the defense budget for 1986 was N$Ur22.8 billion (for value of the Uruguayan new peso--see Glossary), 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. There were unconfirmed reports in the international press, however, that 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--see Glossary) 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 did not export any military equipment. The domestic defense industry was very limited in scope and produced 219 d 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.

Data as of December 1990