”Analyse av den aktuelle politiske og sosio-økonomiske situasjonen i Latin Amerika”

Uruguay

The current political and socio-economic situation in Uruguay is one of stability and economic pragmatism. Current President Vásquez is the first left-wing elected president in the country’s history. His first year in office has demonstrated a balanced and practical approach to social and economic policy, one which combines emphasis in poverty, employment and the need for foreign investment.

Actors

President Tabaré Vasquez was elected in October 2004 with 51% of the vote, surpassing the two traditional parties that had governed Uruguay for 170 years. Former mayor of Montevideo for several terms, Vásquez was the candidate of the leftist coalition Frente Amplio (Broad Coalition), originally formed in 1971; today, the coalition includes 18 different leftist groups, from social democrats to communists, ex-Tupamaro guerrillas to social-Christians. The elections of 2004 were the left’s third attempt to win the government. Failing to reach a majority in 1994 and 1999, results indicated increasing popular support for the Broad Front.

The political opposition in Uruguay is composed by the two traditional centre-right parties: the Whites (National Party, known as Blancos) and the Reds (Red Party, known as Colorados). They constitute the second and third largest political forces in Uruguay respectively.
Issues & Dynamics

Uruguay is a small country of about 3 million inhabitants whose economy is largely based on agricultural commodities (mainly meat and related products). Extractable natural resources are very limited. The country’s population size implies a limited impact on regional demand and price setting. Nonetheless, Uruguay is possibly the first Latin American country to establish a welfare system, largely based on internal taxation, and has a highly educated population. Uruguay’s democratic tradition is longstanding, though it was interrupted in the period 1973-1985 by a military dictatorship. Subsequent governments by traditional party’s contributed to re-established democracy, but their implementation of neo-liberal policies, particularly attempts to privatize natural resources (water) and the energy sector were met with strong popular opposition. In 2003 the government was defeated in a referendum for the privatization of the state-owned company (ANCAP) in 2003; the Broad Front played an active role in this cause.

The election of President Vásquez has been interpreted as the combined result of the left’s success in formulating an alternative to the neo-liberal policies practiced by previous government, and popular disenchantment with those same policies. Argentina’s economic crisis had a strong impact in Uruguay, which experienced a decline of 11% in GDP, rising unemployment levels (up to 20%), and the impoverishment of a third of its population. Inflation increased, as did emigration.
According to political observers, the Vásquez administration bears many similarities to President Lula’s in Brazil: it gives priority to a social agenda, while ensuring economic stability. Uruguay has continued to pay its foreign debt to the IMF in time, in order to secure its credibility among foreign investors. The government sees capital investments as a way to diversify the national economy and create employment. The construction of two cellulose plants by Spanish and Finnish investors ENCE and Botnia on the shores of river Uruguay have to be seen in this context. The plants amount to an investment of USD 1.8 billion dollars, the largest capital investment ever made in Uruguay. In spite of continuous protests from Argentina, and even environmental organisations in Uruguay, the government has taken an uncompromising stance about this issue. A round of bilateral meetings to discuss the environmental implications of the cellulose plants failed to bring an agreement, with Argentina now opting to take legal action at the international level. In the meantime, protests continue and the tourist industry is the first one to be affected by the crisis, as the flow of argentine tourists visiting Uruguayan resorts has been dramatically reduced.
Concerning social policy, one of the first actions of the current administration was the approval of a comprehensive anti-poverty plan called National Assistance Plan for Social Emergency (Plan de Asistencia Nacional a la Emergencia Social - PANES). This plan has already reduced unemployment to 12%.
The government’s commitment to follow its electoral promises can also be observed in current legal actions take against former military and police officers charged with violating human rights during the period of military dictatorship. Earlier this month the first arrests since the restoration of democracy in 1985 were made, involving six officers for whom Argentina has requested extradition procedures. Excavations looking for the bodies of “disappeared” victims in former military compounds have also been initiated by the government. Civil society organizations on their part, are organizing a call for a referendum to abolish the amnesty law (known as Ley de Caducidad), which provides amnesty to members of the military and police forces involved in human rights abuses during the dictatorship. The government is likely to support this initiative, as the Broad Front has opposed that law since its promulgation in 1986 and referendum approval in 1989.
Trends

Uruguay has initiated its first left-government showing political and economic stability and positive results. The recent dispute with Argentina can disrupt this stability, both at the national and regional level. President Vásquez has still four more years in office. His tackling of the current paper mill crisis will play a significant role in the future course of his mandate.

Uruguay in the region. In spite of symbolic acts such as restoring diplomatic relations with Cuba soon after taking office, the Vásquez’s administration is more aligned to the moderate left governments in the region, such as Brazil. Uruguay is a member of Mercosur. The current dispute with Argentina over the construction of the cellulose plants threatens the internal cohesion of this regional organization. Furthermore, Uruguay and Paraguay have openly raised concerns about their relative discrimination vis-á-vis their much larger partners, Argentina and Brazil. Uruguay has similarly aired the possibility of entering into a free trade agreement with USA, something which is in open breach of the Mercosur pact.