Uruguay goes back for the future

Never underestimate an incumbent government in Latin America would seem to be one lesson of this spring’s elections on either side of the River Plate – ideological opposites, both outgoing President Mauricio Macri and Uruguay’s Frente Amplio (“Broad Front”) standard-bearer Daniel Martínez showed a remarkable resilience in confounding all forecasts. Considered dead in the water since his PASO primary meltdown, Macri topped 40 percent and halved his PASO deficit to single digits. Martínez failed to reach 40 percent in the first round (on the same day as Argentina’s, October 27) and was thus written off against a combined opposition vote for last Sunday’s run-off but came within 30,000 votes of pulling off a stunning upset.

Nevertheless, both sides of the estuary are set to change governments in the near future. Last Sunday’s voting left Luis Lacalle Pou of the Partido Nacional (historically ‘Los Blancos’) just ahead by a smaller margin than the ballots under scrutiny – if Macri’s 2015 run-off win of 2.6 percent resulted in a hamstrung presidency, Lacalle has half that mandate after Martínez conceded Thursday. Nor will he enjoy a smooth run of it in Congress, leading his ambitious five-party “multi-colour coalition” spanning from the left to the right.

Yet here the differences between the two countries begin because whereas in Argentina such a vulnerable mandate would seem doomed to Peronist sabotage, Lacalle Pou’s precarious lead has been greeted with civic respect in this small country far less split down the middle than the electoral results might suggest. Whereas in Argentina there is no visible transition over a month after a clear and recognised result (outgoing ministers not knowing the name of their successor does not help), in Uruguay transition was already underway ahead of confirming Lacalle Pou’s victory.

Lacalle Pou, 46, at least promises to rejuvenate Uruguayan politics quite literally. Apart from the natural erosion suffered by any government after almost 15 years, the centre-left regime was simply running out of biological steam – both outgoing President Tabaré Vázquez and the Frente’s economic mastermind Danilo Astori are 79 (with the former reportedly fighting the cancer which was the oncologist’s medical specialty) while José Mujica, the president between the two Vázquez terms, is 84. Martínez, a comparatively young 62, thus emerged as the presidential candidate almost by default – not only was the mayor of Montevideo (housing almost 40 percent of Uruguay’s population) the natural choice within this geriatric vacuum but he was also the Frente’s best bet for the middle ground as an engineer with a solidly middle-class and pragmatic image. But that moderate image was not reinforced at lower levels – in the Congress elected on October 27, eight of the Frente’s 13 senators and 35 of their 42 deputies are left-wing socialists, Communists or ex-Tupamaro guerrillas.

In contrast, Lacalle Pou offers youth but also age – as the son and namesake of Uruguay’s 1990-1995 president Luis Lacalle Herrera (only one year younger than Vázquez). Nothing new in a country which started this century with a Batlle presidency (the surname of no less than four Uruguayan presidents). Nor is the younger Lacalle a newcomer to run-offs – he lost the last one exactly five years ago today to Vázquez. Readers of this newspaper might be interested to know that as a product of Montevideo’s British School he should have some command of the English language.

But the question also arises: Why Lacalle Pou as the only alternative to the Frente Amplio in two consecutive elections? The answer has some bearing on Argentina’s immediate future.

Winners on Sunday, the Blancos are historically born losers in Uruguayan politics. In both the 19th and 20th centuries, the Colorados have been Uruguay’s ruling party – governing Uruguay in 60 of the 70 years since its creation in 1830 in the 19th century and 75 years of the 20th. So what happened to end such persistent dominance?

Quite simply what president-elect Alberto Fernández likes to call the Uruguayan exit route to Argentina’s debt problem. The Frente de Todos leader is referring to the way out of trouble chosen by centre-right Colorado President Jorge Batlle in 2002, when Uruguay was hit by the full force of the economic meltdown in its giant neighbour Argentina, making the foreign debts of both countries unpayable. Whereas Argentina sought escape via Adolfo Rodríguez Saá’s default applauded in Congress, Batlle adopted a friendlier approach, proposing no haircut on either the capital or interest of Uruguay’s foreign debt (which had soared from a pre-crisis US$9 billion to 11.4 billion or over 90 percent of Gross Domestic Product) but simply for more time to recover, grow and repay. The International Monetary Fund assented, Batlle enacted drastic public spending cuts to achieve a fiscal surplus of three percent of GDP, foreign debt fell below 60 percent of GDP as repayment resumed and problem solved to the satisfaction of everybody concerned – except that Batlle’s Colorado Party had just committed political suicide.

With austerity accompanied by real wage falls of over 20 percent and unemployment peaking at 17 percent, Batlle became Uruguay’s most hated president in memory since the 1973-1985 military dictatorship. That is why Lacalle Pou stands as the president-elect today instead of his Colorado rival Ernesto Talvi, eliminated in the first round with 12.3 percent (as against Lacalle’s 28.6 percent) and lucky to finish third. Alberto Fernández might like to ponder all this before proceeding further with the Uruguayan solution.

Finally, this column needs to explain the narrow margin (yet another blow in voting worldwide for opinion polls whose forecasts had placed Lacalle Pou around six percent ahead on average). These forecasts perhaps obeyed logic more than reality. The Broad Front’s name is apt enough since it is broad enough to contain just about everybody who would vote for them – since 61 percent did not in the first round, it would seem reasonable to assume a wide gap. The combination of disenchantment with Frente Amplio – deepening since a decade-long global commodity boom started petering out around 2014, a problem which impacts the entire region – and the hopes aroused by a fresh young face seemed to point in the same direction. But at some point fear of change and the risks entailed must have set in – the fear of losing all the benefits acquired during over a century of the welfare state in Uruguay. Could Lacalle Pou be another Batlle, some might have wondered, especially since the Blancos have been historically to the right of the Colorados (less so in recent years)?

Yet at least Uruguay’s problems are not in the present tense, unlike the other countries in this series (to be concluded next week).