According to the 1985 census, the population of the department of Montevideo was 1,311,976, and that of the neighboring department of Canelones was 364,248, out of a total population of 2,955,241. Thus, these departments and the eastern portion of San José, which together constituted the Greater Montevideo region, held over one-half of Uruguay's population. This monocephalic pattern of settlement was more pronounced in Uruguay than in any other nation of the world, barring citystates . The 1985 census indicated a population density of about 2,475 inhabitants per square kilometer in the department of Montevideo and about 80 inhabitants per square kilometer in the department of Canelones. Densities elsewhere in the country were dramatically lower (see fig. 4 table 2, Appendix).

Montevideo was originally founded on a promontory beside a large bay that forms a perfect natural harbor. In the nineteenth century, the British promoted it as a rival port to Buenos Aires. The city has expanded to such an extent that by 1990 it covered most of the department. The original area of settlement, known as the Old City, lies adjacent to the port, but the central business district and the middle-class residential areas have moved eastward. The only exception to this pattern of eastward expansion is that banking and finance continued to cluster in the Old City around the Stock Exchange, the Bank of Uruguay (Banco de la República Oriental del Uruguay--BROU), and the Central Bank of Uruguay.

Since the 1950s, Montevideo's prosperous middle classes have tended to abandon the formerly fashionable downtown areas for the more modern high-rise apartment buildings of Pocitos, a beachfront neighborhood east of the center. Still farther east lies the expensive area of Carrasco, a zone of modern luxury villas that has come to replace the old neighborhood of El Prado in the north of the city as home to the country's wealthy elite. Its beaches were less polluted than those closer to the center. Montevideo's Carrasco International Airport is located there. The capital's principal artery, 18th of July Avenue, was long the principal shopping street of Montevideo, but it has been hurt since the mid-1980s by the construction of a modern shopping mall strategically located between Pocitos and Carrasco.

Montevideo's poorer neighborhoods tended to be located in the north of the city and around the bay in the areas of industrial activity. However, the degree of spatial separation of social classes was moderate by the standards of other cities in South America. Starting in the 1970s, the city began to acquire a belt of shantytowns around its outskirts, but in 1990 these remained small compared with Rio de Janeiro or Guayaquil, for example. About 60,000 families lived in such shantytowns, known in Uruguay as cantegriles. An intensive program of public housing construction was undertaken in the 1970s and 1980s, but it had not solved the problem by 1990.

In 1990 Greater Montevideo was by far the most developed regia36 gion of Uruguay and dominated the nation economically and culturally. It was home to the country's two universities, its principal hospitals, and most of its communications media (television stations, radio stations, newspapers, and magazines). Attempts by the military governments from 1973 to 1985 to promote the development of the north of the country (partly for strategic reasons) failed to change this pattern of extreme centralization. In one way, however, they achieved a major success: the introduction of direct dialing revolutionized the country's longdistance telephone system. By contrast, the local telephone network in Montevideo remained so hopelessly antiquated and unreliable that many firms relied on courier services to get messages to other downtown businesses.

Until the construction boom of the late 1970s, relatively few modern buildings had been constructed. In many parts of the center, elegant nineteenth-century houses built around a central patio were still to be seen in 1990. In some cases, the patio was open to the air, but in most cases it was covered by a skylight, some of which were made of elaborate stained glass. Few of these houses were used for single-family occupancy, however, and many had been converted into low-cost apartments.

The middle classes preferred to live in more modern apartments near the city center or the University of the Republic. Alternatively, they might purchase a single-family villa with a small yard at the back. Many of these were close to the beaches running east from the downtown along the avenue known as the Rambla. In Pocitos, however, high-rise apartments had replaced the single-family homes on those streets closest to the beach.

Data as of December 1990