URUGUAY: Frente Amplio readies for government

March 2, 2005

Raul Bassi

On March 1, a new government takes power in Uruguay. But what can the Uruguayan people hope for from it?

Uruguay was badly hit by the economic crisis that spread through Latin America after 1999. In particular, the country was badly hit by the 2002 meltdown of the Argentine economy.

A country with a low level of industrialisation, with some rural production, where the tourism and services make up the bulk of the gross domestic product, Uruguay was almost defenseless when the crisis came about. The economy could only survive with financial help from other countries, and particularly from the International Monetary Fund. The bridge loan organised by the IMF kept the country going, and since then Uruguay has slowly recuperated.

On October 31, a groundswell of confidence from the Uruguayan people led the left-wing coalition Frente Amplio (Broad Front) to win the country's general election. The election of former Montevideo mayor Tabare Vazquez as president opened a great wave of hope in Uruguay's people, and people are watching closely to see what Vazquez will do after his inauguration.

What economic situation will Vazquez face? Uruguay has had GDP growth, because of the economic activity generated by the bridge loan and a moratorium on the payment of Uruguay's external debt. However, according to Uruguayan daily Brecha, economic activity remains 20% behind what it was in 1990, unemployment is at 15%, underemployment is almost 30% and in 2004, real wages fell by 3% (in the last five years, real wages have fallen by 30%).

While all the groups in Frente Amplio will be represented in the new government, it is interesting who got what. The head of the treasury will be the IMF-approved Danilo Astori, and all the main economy officials come from the more moderate political parties in Frente Amplio. The more leftist groups — socialists, communists and the Popular Participation Movement (MPP) of the former Tupamaros guerrillas, were excluded with the excuse that they didn't have previous experience.

The other noticeable feature of the government is the fact that the incoming minister for industry, energy and mines is the only non-Frente Amplio member nominated for the cabinet. The incoming minister has been a manager for Texaco, and was a member of the US-Uruguay Chamber of Commerce.

In contrast, members of the MPP were appointed as ministers reponsible for: rural areas and the fishery industry; industrial relations; and social security. A member of the Socialist Party is the new foreign affairs minister. Members of the Communist Party will administrate the "Emergency Plan" to alleviate the plight of 100,000 homeless people and 200,000 living in poverty.

But how much these ministers can achieve may be limited by the funds available from the finance and treasury sectors. There are also rumours of a revision of the structure in 14 months.

Trying to judge what Vazquez's first steps will be is very difficult. The outgoing government had begun to partially privatise some areas, such as the mobile phone network and the railways, and the president-elect has said he will respect these decisions, in the face of protests by union leaders.

This may indicate that Vazquez is willing to compromise on workers' interests, but it is too early to tell. If the left organisations in Uruguay mobilise in opposition to this road, Vazquez could move closer to being a radical president.

Uruguay is still in a deep crisis, which the poor are paying heavily for. A government like that of Venezuela's Hugo Chavez, which prioritises the needs of the poor, would help the country significantly. Popular pressure for a hopeful, and expectant, population could push Vazquez further towards the Chavez route, or, if he will not play that role, another leader could emerge. After all, Uruguay is still part of a radicalising Latin America.

[Raul Bassi is a member of the Australian Socialist Alliance.]

From Green Left Weekly, March 2, 2005.
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