Insecurity, basically. At some point during the last decade society kind of broke down, and the respect for human life was lost. I'm talking 12 year olds killing a store clerk in cold blood for 2 or 3 dollars, or worse [1]. This didn't happen just once; at some point there was a murder per day, in a country of three million people. The government, who are former terrorists [2] and based their campaigns on condemning the "repression" of the police, are ideologically incapable of being firm against all this (in fact, they're ideologically stuck in the 60s)
They have also given too much power to the unions, to the point that they can legally steal a factory from their owners, for example (in a nutshell, occupying it until it goes bankrupt, and then assuming control "to save jobs") Also, just before their first term in power, Uruguay had just came out of a terrible economic crisis that affected the whole region; basically, Argentina fell, and Uruguay is too small and dependent to have avoided it (and the old government was blamed). During the last decade the whole region has improved, so the economic situation in Uruguay is quite good right now (and the new government takes credit). But the worst thing is the way they're squandering this money in sort-of-well-meaning but very badly implemented "social" policies, so when the "up" economic cycle turns into a "down" economic cycle and the easy money runs out, there will be no reserves, a disfunctional and violent society, truly pathetic education level [3],... it's a ticking bomb.
I'd be curious to know why this is the case for you.