In 1516, a surprised Spanish sailor discovered the region that would become Uruguay and was followed by Ferdinand Magellan, who in 1520 anchored outside present-day Montevideo. Despite the Spaniards' success in making the journey from home, they were less successful settling in the area, due to resistance from the Charrúa Indians who inhabited the land. Not until the early 17th century, as Spain competed with Portugal for South American territory, did Spanish colonization begin to take hold. Colonia del Sacramento was founded by the Portuguese in 1680. Not to be outdone, the Spanish responded by establishing Montevideo after the turn of the century.

Uruguay's history until the beginning of the 19th century was marked by colonial struggle for the Argentina-Brazil-Uruguay region. In 1811, José Gervasio Artigas initiated a revolt against Spain. The war lasted until 1828, when Uruguay earned its independence from Brazil, to which it had been annexed by the Portuguese. Argentine troops assisted the Uruguayan fighters in defeating the Brazilians, and Uruguay adopted its first constitution by 1830. Political instability dominated the rest of the century, as large numbers of immigrants arrived from Europe. By 1910, the population reached one million.

Uruguay experienced significant political, economic, and social progress under the two presidencies of José Batlle y Ordoñez, who in the early 20th century created what many considered a model social-welfare state. Life seemed to be getting better and better for Uruguayans, who achieved their first World Cup victory in 1930 and again in 1950. By the 1960s, however, Uruguay's charmed reputation as the "Switzerland of South America" was shattered by corruption, high unemployment, and runaway inflation. The instability of Uruguay's economy paved the way for military government, which seized control in 1973 and was responsible for the detention of more than 60,000 citizens during its time in power.

Civilians resumed control of the government in 1984, when Colorado Party leader Julio María Sanguinetti won the presidency. His tenure in office was focused on national reconciliation, the consolidation of democratic governance, and the stabilization of the economy. Violations under the military regime were controversially pardoned in order to promote reconciliation, and a general amnesty was given to military leaders charged with human rights abuses.

The National Party's Luis Alberto Lacalle held the presidency from 1990 to 1995, during which time he reformed the economy in favor of trade liberalization and export promotion. He brought Uruguay into the Southern Cone Common Market (Mercosur) in 1991 and privatized inefficient state industries. Julio María Sanguinetti was reelected in 1995, continuing Uruguay's economic reforms and improving education, public safety, and the electoral system. The economy flagged at the end of the century, exacerbated by the Argentine economic meltdown in 2001. Tourism plummeted a staggering 90%. Currency devaluation followed, and with it a slow recovery.

Uruguay Today -- Uruguay's first socialist president, Tabaré Vázquez, took power in March 2005, ushering in a more stable and prosperous period. Ex military leaders were finally taken to court for human rights abuses and the economy brightened, with GDP growing by 30%. In 2006, an environmental dispute broke out with Argentina over two multibillion-dollar paper mills built in Uruguay that the Argentines say will pollute the River Plate. The argument has led to numerous border closures between both countries and looks set to continue for some time.

Despite setbacks like the border closures, Uruguay's economic crisis has certainly passed and the country has become a regional leader in education again, with schemes like every child receiving a free computer. Political maturity is also more evident as another leftist president took over from Vázquez in 2009. Ex-guerrilla José Mujica has promised to continue his predecessor's policies of opening the Uruguayan economy and sharing the country's great wealth with the nation's poor.

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