Uruguay swings to the right as Luis Lacalle Pou wins presidential race

Luis Lacalle Pou, of the centre-right Partido Nacional won Uruguay’s presidency, after his rival conceded four days after a extremely tight run-off election.

Lacalle Pou, a career politician and son of a former president, was congratulated by his opponent Daniel Martínez of the ruling Frente Amplio, ending 15 years in power for the left-wing coalition.

“The evolution of the vote count hasn’t changed the trend,” Martínez wrote on Twitter. “We greet presidentelect Luis Lacalle Pou, with whom I will have a meeting tomorrow. I thank everyone who placed their trust in us by casting their vote for us from the bottom of my heart.”

Martínez had refused to concede on Sunday when the election was deemed too close to call by the electoral court, with just 30,000 votes separating the candidates. The court ordered a recount on the grounds that the number of provisional or contested votes – around 35,000 – exceeded the margin between the candidates.

The court has not yet published its final results.

The Partido Nacional acknowledged victory in a tweet saying: “Now it’s our turn, let’s celebrate everybody’s Uruguay!” The news set off a cacophony of horn-blowing in downtown Montevideo by Lacalle Pou supporters.

Lacalle Pou and Martínez were scheduled to meet at the president-elect’s campaign headquarters yesterday.

Speaking with reporters, vice-president-elect Beatriz Argimón said she will meet with Vice-President Lucia Topolansky next Tuesday to discuss the transition.

SWINGING RIGHT

One of South America’s wealthiest nations, Uruguay had already started its swing to the right in the October 27 general elections that saw the Frente Amplio lose control of Congress for the first time since 2005.

Lacalle Pou’s victory is part of a recent anti-incumbent backlash in the region that has seen Latin Americans vote for change, whether it be from the right or the left. It also comes at a time of increased volatility in South America with violent protests erupting in Colombia, Ecuador, Bolivia and Chile.

The result in Uruguay means that the right will govern in three of the four countries that constitute the South American trading bloc known as Mercosur. That could leave Alberto Fernández, Argentina’s president-elect, isolated when he takes office next month.

The bloc is already under strain following comments from President Jair Bolsonaro casting doubt on whether Brazil will even stay in Mercosur. Bolsonaro called Lacalle Pou to congratulate him, according to a statement from Brazil’s Foreign Ministry.

Uruguay can’t afford to lose its Mercosur export market if the bloc collapses, but at the same time it needs Mercosur to negotiate more trade deals with the rest of the world, Ignacio Bartesaghi, dean of the C a t h o l i c U n i v e r s i t y o f Uruguay’s business sciences school, said in an interview.

“When there are two playerslike Argentina and Brazil with so much weight and two presidents that are so far apart like Fernandez and Bolsonaro, it’s Uruguay that can mediate,” he said. “Argentina needs an ally to prevent Bolsonaro’s extreme position becoming reality.”

SPUTTERING ECONOMY

The 46-year-old former lawmaker and heir to one of Uruguay’s oldest political dynasties will start his five-year term on March 1 as the head of a broad five-party “multicolour coalition” spanning the centreleft to the far-right. The grouping will have ample majorities in both houses of Congress.

Lacalle Pou, who has already named three ministers, including former debt management director Azucena Arbeleche as his finance minister, said he will fill the rest of his Cabinet by mid-December.

Ernesto Talvi, leader of the Colorado Party, is expected to be named Uruguay’s foreign minister, Uruguay’s El País daily reported.

The new government will inherit an economy on a slightly stronger footing thanks to outgoing President Tabaré Vázquez’s efforts to secure US$5 billion of investment in public works and the construction of a massive pulp mill. Economists surveyed by Bloomberg forecast growth of 1.5 percent next year and two percent in 2021, compared with 0.3 percent this year.

Still Uruguay’s economy will face headwinds from its two much larger neighbours, with Argentina’s economic crisis likely to continue and Brazil’s recovery slow, according to James Bosworth’s Latin America Risk Report.

Cutting a public sector deficit approaching five percent of GDP to protect Uruguay’s access to cheap credit is a key part of Lacalle Pou’s policy programme, which includes potentially contentious social security and public education reforms. His advisers have promised to reduce wasteful spending by US$900 million in 2020 alone.

Regional unrest and his narrow victory might prompt Lacalle Pou to adopt a more gradual fiscal adjustment, said Aldo Lema, an economist and partner at Vixion Consultores. In opposition, the Frente Amplio will also have an incentive to foster political stability as it eyes a return to power in 2025, he said. But Lema noted that Uruguay is far from immune to the unrest roiling the region.

RESPONSIBLE OPPOSITION

The Frente Amplio remains the country’s largest political party with the ability to draw thousands of supporters onto the streets. Lacalle Pou will also have to reach an understanding with militant trade unions organized under the umbrella of the powerful PITCNT labour confederation.

Frente Amplio party chairman Javier Miranda told reporters Monday that his party will be a “responsible opposition” that will defend the achievements of its 15 years in power.

The party would also accept Lacalle Pou’s offer to place its representatives on the boards of state-run companies and other government entities, he added.