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Pragmatic Socialism in Uruguay

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The election of Tabaré Vázquez as President of Uruguay in 2005 was historic. It was the first time Frente Amplio, a leftist coalition, won the presidency. Since the founding of Uruguay, the presidency switched between the center-right Partido Colorado, or Colorados, and the right-wing Partido Nacional or Blancos.

As president, Vázquez brought changes to Uruguay not so different from his regional allies. He expanded healthcare coverage for Uruguay, an expected policy considering he was a doctor. He created a commission to look into the 1973 to 1985 military dictatorship, still a sensitive topic in Uruguay today. Poverty fell from 32 percent to 20 percent once he left. Overall, Vázquez left with an approval rating of 80 percent, unprecedented for a third-party candidate.

In addition, Vázquez’s victory also reflected a general mood in Latin America at the time. Venezuelan President Hugo Chávez called his win “one more step on the road to building a new South America, a new Latin America, [and] a new world that is being born.” Chávez, along with other Latin American leaders like Argentina’s Néstor Kirchner and Brazil’s Luís Inácio Lula da Silva, worked with Vázquez on regional issues like trade and economic development. Mercosur, disliked by Global North investors for not being friendly with the West, signed free trade deals with countries Egypt, Israel and Chile.

But Vázquez’s re-election last year as a president was different. He entered office in a “new Latin America,” just not in the way Chávez envisioned it. Chávez is gone and replaced with Nicolás Maduro, who is under serious financial and political pressure in a country tarnished by triple-digit inflation. Lula, and his successor Dilma Rousseff, are under investigation for corruption and, for Rousseff, possible impeachment. Mauricio Macri succeeded Cristina Fernández de Kirchner and reversed her populist policies to the fear of Kirchner’s base in Argentina. This is viewed as the beginning of the end for leftist governments.

Meanwhile, new concerns have arisen in Uruguay. First, inflation, a growing issue in Latin America, is over 10 percent. The government pledged to lower it, but have struggled to come up with a solution. The major problem is Argentina and Brazil. Macri depreciated the Argentinian peso after entering into office, and Brazil’s currency is also depreciating because of political and economic turmoil. Both affect Uruguay’s ability to sell its exports overseas with competitive products from its neighboring countries.

The silver lining is a depreciated Uruguayan peso that makes Uruguay’s exports cheaper overseas. The country is known for its meat, a valuable commodity for its economy. But exports are falling—it fell nine percent in the first quarter this year—as China and Russia are not buying like before because of their economic woes. In addition, a December 27 article in the Wall Street Journal noted how devalued currencies do not have the same effect as before.

Crime is also a growing problem in the country. The Overseas Security Advisory Council, an agency in the U.S. State Department, found that “the crime rate is high by U.S. standards.” It is not uncommon to find reports of robberies or murders in the country. Though, crime is growing for economic reasons, primarily inflation, a sharp contrast from explanations offered by the right-wing in the country. For example, Jorge Larrañaga, a senator with the conservative PN and a possible presidential candidate in 2019, compared the country’s homicide rates to Chicago, “the most violent city in the United States.” His solution? Declaring a “war on delinquency” and sending soldiers to work with police, often viewed as underfunded in the country’s battle against crime.

Furthermore, Vázquez’s vice president, Raúl Sendic, is causing political problems not only for his administration, but also the coalition in general. First, Sendic admitted he did not receive a degree in human genetics, leading to opponents and some FA officials to question his integrity. Second, and most important, is Sendic’s role in ANCAP, the country’s state-owned oil refining and production firm. Sendic ran the company for years, supervising its finances. It was discovered, to the chagrin of FA’s opponents and civilians, to have accumulated a debt of over $600 million. Sendic passed the blame to others for the growing debts, but this fell on deaf ears as lawmakers questioned whether there were illicit activities done at ANCAP. Ultimately, the debt was forgiven by lawmakers, only FA members voted for it, but the political damage was done.

FA lost significant support with only a third of Uruguayans supporting the coalition. For context, about one in two Uruguayans supported FA two years ago. This is a serious drop for the coalition.

Sendic, meanwhile, is the one of the least-liked politicians in the country. Oddly enough, Vázquez is the most admired politician in Uruguay. However, the base Vázquez and Mujica helped create over the past decade is not as passionate as before based on these problems.

With all of this, Vázquez is shifting his strategies and policies to a pragmatic ideal instead of the socialist-like policies he supported during his first term. The country’s renewable energy efforts provide an example. Uruguay is known as a Latin American leader in renewable energy with a majority of the country’s power coming from it. Its growth in alternative energy is so ambitious that it aims to export energy to Argentina and Brazil.

For Vázquez, this is not enough. He met with former, living presidents of Uruguay to discuss a long-term oil and gas strategy. This strategy would, in Vázquez’s words, go “beyond one administration and one political party.”

Considering Argentina contains one of the largest shale gas reserves on the planet, it is assumed Uruguay would hold something valuable. Since this is a country whose economy grew one percent last year, groups are scrambling for oil. Companies like ExxonMobil, Statoil and Total are drilling off the coast of Uruguay to discover oil despite low oil prices. ANCAP is expected to reap benefits from any oil explored.

But this decision is unusual, especially noted by Jorge Battle, a former president and right-wing Colorado, who disagreed with Vázquez’s ambitions. He hoped no petroleum was found since oil-rich countries, like Venezuela, were suffering because of low oil prices.

While true, the biggest issue with oil and gas exploration is consumption in an age of climate change. Uruguay will not see severe effects like in Argentina or Brazil in the future, but it will be harmed from the effects of global warming. Drilling for oil would only make its goals to help the environment worse.

In his coalition, Vázquez still relies on the coalition on policies like medicine and trade. But his appointments in office reflect differences in moving the country forward. Many coalition members do not support free trade deals, including the Trade in Services Agreement, a secret treaty similar to the Trans-Pacific Partnership. The country’s strong labor movement pushed lawmakers to reject the deal, which is viewed as harmful for the nation’s exports. Mujica even cited free trade as a pact Uruguay cannot join.

But Vázquez is not so dismissive of these agreements. He is seeking, through Mercosur, a free trade deal with the European Union. This was unheard of when Kirchner was in charge of Argentina. But, with Macri, it is more likely to happen. Moreover, Minister of Foreign Affairs in Uruguay and former Vice President in Vázquez’s first term Rodolfo Nin Novoa said, in response to the TISA rejection, that Uruguay could not “stay outside of that or else we reduce ourselves to a village.”

For a country with more than three million people, the country is growing its international ties to the West. With Vázquez, it seems it is done out of necessity. This is found with French President Francois Hollande’s visit to Uruguay earlier this year.

Hollande, who despite working for the Socialist Party pushes for austerity in France, said Uruguay and France shared the same foreign policy objectives, a statement Vázquez agreed with. Hollande further highlighted there were strong ties—European of course—between France and Uruguay. The Uruguayan government, meanwhile, welcomed French capital to invest in the country, again a deviation from Vázquez’s first term.

In Latin America, Vázquez is creating out a new group of leaders to work with. He met with Macri and restored relations between Uruguay and Argentina through trade agreements. Relations between the two, despite strong ties for centuries, soured under Mujica’s tenure because of political disagreements with Cristina Kirchner. The two countries are even seeking a bid to host the 2030 FIFA World Cup, which FIFA President Gianni Infantino expressed interest in supporting. Although, a significant issue for Uruguay is the lack of sufficient stadiums. Argentina may do well with its stadiums, but Uruguay’s only decent stadium, Estadio Centenario, is in desperate need of repairs. Plus, the shadow of rushing in Brazil before the 2014 FIFA World Cup should provide caution for Uruguay if it continues its interest in the tournament.

But this does not mean Vázquez is abandoning leftists in the region. Vázquez won his presidency as a left-wing politician, not as a Colorado or Blanco. Nin Novoa even came to the defense of Venezuela after Macri questioned whether Venezuela should stay in Mercosur based on the country’s democratic problem. Furthermore, in response to the Brazilian crisis, Vázquez said Brazil’s laws should handle the political crisis instead of speculation from anyone outside the country.

At the same time, the writing is on the wall. Leftist politics did well in Latin America primarily because of a commodity boom that funded many of the policies that helped their base. But leaders were careful to walk a fair line with their policies.

Mujica, before the 2004 presidential elections, admitted FA could not “scare the bourgeoisie” with all of its ambitious proposals. His comment reflected the coalition’s fears of not obtaining the presidency despite the strong wave of leftism in Latin America. Of course, it won the presidency and achieved most of what it wanted. But now, this “new Latin America” cannot lead to the typical policies achieved in Vázquez’s first term as president. Simply, Vázquez must not “scare the bourgeoisie.”

Of course, Uruguay is still progressive. After all, what other Latin American country legalized marijuana, passed the region’s most liberal laws of abortion, is not religious as all its neighbors and allowed gay marriage? Its economy is relatively better compared to Brazil. Still, there are causes for concern considering the broader issues affecting Uruguay. The coalition is losing its base, and, if its political problems continue, its hold on the presidency may end after Vázquez leaves.

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Brandon Jordan is a freelance journalist. He can be reached at bjordan7474[at]gmail.com.

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