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02/03/2005 | Leftist President Takes Office in Uruguay

WMRC Staff

Latin America will today receive yet another left-of-centre president with today's inauguration of Tabaré Vázquez as president of Uruguay.

 

Significance
Uruguay's first ever leftist president is inaugurated today.

Implications
The inauguration of Tabaré Vázquez marks an historic moment in Uruguayan history. His government looks set to take its cue from the left-of-centre governments of countries such as Brazil and Chile, stressing social issues but at the same time adopting a pragmatic economic policy.

Outlook
With a US$13-billion debt to contend with, the government is likely to struggle to achieve its social goals, notwithstanding a strengthening economy. However, fears that the Vázquez administration will look to follow the example of countries such as Cuba and Venezuela appear unfounded.

Vázquez and his Frente Amplio (FA - Broad Front) coalition won a convincing victory, with over 50% of the vote, to take the October 2004 presidential elections. He has already announced his new cabinet of 13 ministers and vice-ministers, which he says will be charged primarily with tackling social problems and poverty. The cabinet contains former armed left-wing Tupamaro guerrillas and trade unionists, and is Uruguay's first ever leftist government, ending the dominance of the two traditional parties, the National Party (PN) and the Colorado Party (PC).

A host of left-wing Latin American leaders will be in the capital, Montevideo, to celebrate his inauguration as Uruguay enters into the South American family of left-leaning nations. This family includes President Kirchner in Argentina, Lula in Brazil, Lagos in Chile, Castro in Cuba and Chavez in Venezuela. Castro is unable to attend for health reasons, but Felipe Pérez Roque, the Cuban foreign minister, will be present, as will Evo Morales, the Bolivian coca growers' leader. Both he and Castro are extremely unpopular with the US. One of Vázquez's first moves will no doubt be to restore relations with Castro's Cuba, frozen in 2002 when outgoing president Jorge Batlle slammed Cuba's human rights record, much to the chagrin of the Castro administration.

Outlook and Implications

The advent of yet another leftist leader in the region has raised eyebrows and even concerns in some corners. In reality, however, Vázquez is much more likely to take his cue from leaders such as Lula in Brazil and Lagos in Chile, than he is from Castro and Venezuela's Chavez, the US' regional pet hates. His administration is likely to be governed as much by pragmatic considerations as it is by social issues. Like many across the region, Uruguayans have also become wary of the kind of economic policies championed by the traditional political parties and international financial institutions (IFIs) such as the International Monetary Fund (IMF) and World Bank. In this context Tabaré Vázquez's criticisms of the pure neoliberal approach have struck a chord. That is not to say, however, that the country's economy is about to turn radically to the left. Having run for the presidency, and failed, twice before, Vázquez has moderated his leftist stance, focusing on change versus continuity, and promoting a leftward shift that is more of a change of emphasis than a radical break from the economic policies of the outgoing PN government.

The appointment of Danilo Astori as economy minister is evidence of this. Astori, whose appointment has been welcomed by the private sector, has promised to maintain debt repayments, clear rules for investors, fiscal discipline, a freely floating exchange rate and inflation targeted monetary policy. While he has been keen to stress that the FA would 'continue to be a party of the left', he has managed to avoid alienating the markets and his appointment has been welcomed by IFIs, satisfied by Astori's realistic monetary and fiscal policies and promises that repayments on Uruguay's US$13-billion debt will be kept up. Indeed, Astori faces opposition from some elements within the FA coalition who believe he will not take the economy far enough to the left. Very much a moderate, he will model economic management along the lines of the Worker's Party (PT) government in Brazil.

Having suffered economic crisis in 2001 and 2002, Uruguayans are now looking for change. Although the economy is now undeniably in a strong period of recovery, a third of Uruguayans still live below the poverty line and unemployment is running at almost 15%. By Latin American standards this is perhaps not so dramatic, but Uruguay is a country that has always considered itself wealthy and Uruguayans want to see action to restore living standards to what they have been in the past. Vázquez is in a strong position to deliver.

WMRC (Reino Unido)

 



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