Uruguay’s Encouraging Economic & Social Progress
My good friend and CAW brother Paul Pugh (President of CAW Local 1075 in Thunder Bay) has brought to my attention recent economic and political developments in Uruguay, the little nation of 4 million people squashed between Argentina and Brazil.Â Paul has family connections to Uruguay and follows developments there closely.Â While not as well-covered in the media as developments elsewhere in Latin America (like Brazil or Venezuela), what’s been happening in Uruguay is important – and highly encouraging.
In March a new President was sworn in, following elections at the end of 2009.Â The President is Jose Mujica, who was a leader of the guerilla movement that opposed Uruguay’s military dictatorship during the 1970s and 1980s.Â He spent 15 years in jail, and yet now is the country’s new President – talk about poetic justice!Â Mujica was the candidate of the Frente Amplio (or “Broad Front”), a very diverse coalition of left and centre parties (everything from Communists to Christian Democrats).Â The FA was formed in 1971, maintained its cohesiveness through the dictatorship, and won the national election in 2004 (including the presidency and majorities in both houses of parliament).Â The first FA President was Tabara Vasquez.Â Mujica has pledged to maintain the same incrementalist approach as Vasquez, but he is widely seen as being somewhat more to the left.Â The 2009 results (in which the FA once again won the presidency and a majority of both houses) was a clear popular endorsement of the direction the government has followed – although conservative forces continue to energetically oppose the government.
Like many of the new left governments in Latin America, Uruguay’s needs to negotiate many internal tensions regarding how quickly to “push the envelope.”Â The FA government has clearly made substantial progress in enhancing social security and improving the living conditions of the majority of the people (through job-creation and industrial policy initiatives combined with major expansion in education and social programs – all financed with higher taxes).Â But it has also worked to stimulate private sector investment.Â Its approach has been compared to Lula’s in neighbouring Brazil, although my review suggests the Uruguayans have perhaps been more ambitious in their social initiatives.
Many progressive forces want to see the government move faster, including unions which have organized strikes and other protests.Â In general I think this tension is healthy.Â The government will do better if it is constructively pushed from the left.Â That’s certainly better than sitting back and waiting for an elected government to “deliver the goods,” and then complaining bitterly when they “sell out.”Â We’ve learned the hard way, over and over again, that “winning” an election is only the opening shot in a much larger and harder political struggle over the direction of society.Â At the same time, all sides have to be respectful of the fragility of the coalition, and realize that if itÂ falls apart then the hope for progress is lostÂ – and hence those internal tensions need to be handled maturely and carefully.
On the hole, the proof is in the pudding: Uruguay’s economy has done well (like some others in South America, GDP growth continued, albeit more slowly, in 2009 despite the global crisis), and social conditions have improved.Â Poverty rates have declined markedly.Â In the 2009 election campaign, Mujica campaigned explicitly on the importance of social consumption (rather than private consumerism).Â He travelled to his campaign events on Uruguay’s refurbished public transit system.
One indicator of Uruguay’s success: Uruguay now ranks 50th in the world on the UNDP’s Human Development Index, even though it has only the 70th highest GDP.Â That gap between the GDP ranking and the HDI ranking is one of the largest in the world – and is evidence that the country is doing a good job (through these interventionist measures) at translating economic growth into genuine human progress.
The following are some of the achievements of the first (2004 – 2009) FA government in Uruguay.Â It’s very encouraging to see what even a small country can do to improve the human condition, when the people are ambitious and organized enough to demand progressive change.Â Paul has also suggested the following web site (in Spanish) as a useful reference on developments in Uruguay:
- re-opening of several industries that had been closed down under the former neoliberal government, including meatpackers, glass manufacturing, tire manufacture, aluminumextrusions, and value-added forest products (not just paper)
- 25% increase in social spending
- opening of a new eye hospital (with Cuban assistance), free surgeries
- unemployment rate declines from 14% to 7.5% (lowest since the country began measuring)
- over one million inscribed in government pension system, replacing private pensions
- 25% increase in real wages, 23% increase in pensions
- freeing up of collective bargaining
- growth in union coverage, including police, agricultural workers, domestics, soldiers
- the highest ever affiliation to PIT-CNT (central labour body)
- 4.5% of GDP devoted to education
- free student transit within 60 km radius of home
- free mandatory education from age 4
- tax reform, including income tax for higher incomes and reduction of value added tax
- elimination of IMF debt, no more need to adhere to “conditions”
- 350,000 children enrolled in government health care
- a laptop for every primary school student (not including private schools – about 10%)
- in 2004, when FA took office, 50% of families in poverty, and 15% in extreme poverty; by the middle of 2009, 21.7% were in poverty, and 1.7% in extreme poverty
- 8 hr workday for agricultural workers