Tabaré Vázquez and José Mujica. Flickr. Some rights reserved.
Part 1 of this overview set out how, just as the Left has hit the skids in Europe over the past 7 years; it's also running out of ideas and energy in South America, where it has dominated. Part 2 provides a detailed case study of a little country which often finds itself ignored in dispatches; but which now appears embarked on an all too dispiriting journey with familiar overtones for social democratic parties everywhere
A country tiny in population (just 3.4m, almost half of whom live in the capital, Montevideo), plentiful in water supplies and green spaces (geographically, it’s around the size of England and Wales), famous for its football and beef, and where welfarist traditions abound. A century ago, under the watch of celebrated President José Batlle y Ordóñez, Uruguay implemented one of the world’s first genuine welfare states: including unemployment benefit, eight-hour workdays, and huge government intervention in the economy. Many credit the socially cohesive, homogenous society which resulted with helping Uruguay, which became known as the Switzerland of South America, lift the football World Cup in 1930 and 1950.
But after the Second World War, in tandem with the rest of the South Cone, Uruguay fell into increasingly precipitous social and economic decline. The conditions triggering the dictatorship gradually fell into place as the country moved towards the extremes and Leftist activists, the Tupamaros (MLN-T) began robbing banks, gun clubs and other businesses, redistributing the proceeds to the poor. In 1968, faced with serious labour unrest, President Jorge Pacheco enforced a state of emergency and repealed all constitutional protections. Political dissidents were imprisoned and tortured; demonstrations were brutally repressed. The MLN-T responded by morphing into a fully-fledged urban guerilla movement, which engaged in political kidnappings, bombings and assassinations.
Among their number was one José Mujica. Apprehended by the authorities on no fewer than four occasions, he ultimately spent 13 years in captivity: including a two-year spell in solitary confinement at the bottom of a well, where his only friends were rats. The insurgency peaked in 1970, and the Tupamaros had collapsed by mid-1972. Combined with the rigging of the 1971 election in favour of Juan María Bordaberry’s Colorado Party, this paved the way for the military to confront the independence of first the judiciary, then the executive, then the legislative. The dictatorship was ushered in in 1973; and at one point, presided over more political prisoners per capita than anywhere else in the world.
Uruguay, though, has always been a curious, idiosyncratic sort of place. Few countries anywhere have been presented with a constitutional plebiscite designed to ratify a military junta, let alone had the courage to reject it: as to their rulers’ shock, the people did in 1980. Even fewer would, at a further referendum, then reject the chance to prosecute those responsible: yet Uruguay did in 2009, despite many of those who had been part of the MLN-T insurgency now being in power.
How had the latter come to pass? Uruguay returned to democracy in 1984; and in the 1990s, embarked on a series of privatisations. Its’ always important financial sector became alarmingly dependent on Argentinian depositors seeking to hide their savings from prying tax inspectors, and taking advantage of Uruguayan banking secrecy. Uruguay was increasingly economically reliant on its much larger neighbour: meaning when Argentina catastrophically defaulted in December 2001, Uruguay suffered its own enormous financial crash the following year.
The 2002 crisis remains the pivotal watershed in the country since the dictatorship. The banks were shut for a week; hundreds of thousands fell out of the middle class into serious poverty; a lost generation of children brought up in such conditions wasn’t the danger, but the likelihood. Something had to give.
Since the return to democracy, the Leftist Frente Amplio (FA) (Broad Front) had been making gradual progress – but was up against two political leviathans. Between them, the Partido Colorado and Partido Nacional (Blancos) had governed Uruguay ever since its formation in 1830: the former, the party of the cities; the latter, the party of the countryside.
No recognisably Leftist party ever usurped this duopoly: albeit the impact of Batlle’s reforms was such that both major parties tended, for the most part, to coalesce around the centre, and rarely attempt anything extreme. Other than the period around the dictatorship, democracy and pluralism (the latter, more than anything, is the cornerstone of Batllismo) were always respected.
The impact of the crash, though, completed the Frente Amplio‘s rise; and for that matter, squared the circle for many involved with the Tupamaros over 30 years earlier. The old politics had failed. Now, by putting together a coalition which encompassed communists, socialists, social democrats, social liberals, centrists and independents all under one banner – uniting the entire Left in a manner which, unfathomably, has still not been attempted in Britain – the ancien régime was swept aside, and Tabaré Vázquez returned as President, with a huge mandate. Vázquez and the FA won 51.7% of the vote, eliminating the need for a Presidential run-off. The governing Colorados were obliterated: collapsing from 32.8% at the 1999 first round to just 10.6%. Usurped in the cities by the FA, in a manner not unlike New Labour’s surge across London and the south-east in 1997, for the Colorados – historically, by far Uruguay’s most successful party – there was no way back.
Vázquez now commenced a comprehensive wave of reforms. Income tax was introduced for the first time; $100m was invested in emergency food and health programmes; the healthcare system itself was turned into an insurance-based scheme accessible to all Uruguayans. Poverty was slashed from 32% to 20%; extreme poverty from 4% to 1.5%. Notably, the government also presided over the One Laptop Per Child (Plan Ceibal) scheme, the first of its kind in the world, which provided every grade school student and teacher in Uruguay with a laptop connected to the internet.
The President further endeared himself to his compatriots by standing up to Argentina during a bizarre dispute over a pulp mill in Fray Bentos. His counterpart, Nestor Kirchner, complained that its construction would contaminate the Uruguay River, which separates the two countries. Bridges over the River were blockaded by enraged locals in Argentina; Kirchner took Uruguay to the International Court of Justice (ICJ); Uruguay threatened to resort to the World Trade Organisation.
The dispute lasted fully 7 years – and was ended by the ICJ ruling that the plant could keep operating, and both governments agreeing to the creation of a bi-national commission which would monitor river pollution. Vázquez later revealed he’d even considered the possibility of a military conflict: and sought the backing of his friend, George W. Bush, and Condoleezza Rice, Bush’s Secretary of State. Just in case.
Ultimately though, what made Vázquez’ success possible was sustained economic growth. GDP rocketed by 10.5% in 2005, and growth averaged 7% over subsequent years. Moreover, what separated the FA from so many Leftist governments across the continent was its pragmatism: cautious, even neoliberal economic policies were pursued, with foreign investment encouraged and inflation controlled. Most of the credit for this was due to the brilliant Danilo Astori, leader of the centrist Asamblea Uruguay and Vázquez’ indispensable finance minister.
Before being swept from power, the old parties had warned that the Left would turn the country into Cuba. Quite the opposite. Looking back, what’s remarkable was how well a coalition of such diverse political positions held; all those within the FA who’d fought for so long to achieve power and change Uruguay never lost sight of the bigger picture. The President, meanwhile, was in his element: an oncologist by profession, he’d been entrusted with a patient in near terminal condition, successfully removed the tumour and given it a new lease of life.
Uruguay’s constitution does not allow a President to serve two consecutive terms. So Vázquez, who basked in extraordinary approval ratings of 80%, departed; and the overwhelming success of his government made Mujica, his very different successor, a virtual shoo-in. This was indeed quite a story. 25 years earlier, Mujica had been in captivity; 39 years earlier, after being shot six times by police, the then guerilla had been fighting for his life in a Montevideo hospital. Now, Uruguay’s answer to Nelson Mandela became its unique, truly one-of-a-kind head of state.
When they travel to other continents, Uruguayans are used to being asked just where their country is. “Is it in Africa?”, enquire some. “Part of Argentina?”, wonder others. Two men have done a huge amount to change this and put the place on the map. Footballing icon Luis Suárez; and Pepe Mujica. The world’s humblest President: who lives on a farm, grows his own food, gave 90% of his salary to charity, never wears a tie in any circumstances, and whose sole, cherished possession is a 1987 Volkswagen Beetle.
I moved to Uruguay in February 2012. When I arrived, people I spoke with were embarrassed by Mujica. “We can’t have a President who behaves like this!”, they wailed. “It looks terrible for us!” I thought it was wonderful, and told them as much: “We’d go crazy for someone like him in Europe!” For Mujica then, read Corbyn now? There are parallels: not only in their politics and peculiar appeal, but their humility.
That very humility, indeed, was why contrary to what might’ve been expected, Mujica initially consolidated his predecessor’s moderation and good sense. Astori was now Vice-President: under his watch, growth and stability continued, while the President kept those on the far Left of the coalition at bay. In the meantime, the FA married social liberalism with social democracy: passing legislation allowing abortion, equal marriage, and proposing that the sale of cannabis be regulated.
This latter idea was what sprung Mujica into global prominence. What’s rather less known, though, is that next to nothing has actually happened. Cannabis is the perfect example of how Mujica’s image is not matched by the reality: many Uruguayans believe he was much more concerned with how he appeared overseas than making a substantive difference at home; some, of the more cynical variety, even think that where Pepe’s concerned, it’s mostly all an act.
In 2013, Mujica gave a celebrated speech to the UN General Assembly, where he fulminated against the world’s obsession with consumption. He urged a return to simplicity: family, love, free time, a planet based not on markets but on conservation and fraternity. Free time, indeed, is a favourite theme of his; but with the cost of living in Uruguay prohibitively high, it’s not a luxury enjoyed by anything like enough of his people. Dirty, litter-strewn streets and lack of recycling (if you try to recycle things in Uruguay, they’re often taken to the same place as the rubbish!) also sit at odds with the romanticised rhetoric.
Throughout my time in the country, I was always aware of its constant contrasts and contradictions. Of high quality, high speed internet – but which took a month of pleading phone calls and a dozen cancelled appointments for the state owned monopoly, Antel, to finally install. Of buses which are cheap and reliable enough, but on which there isn’t enough room to swing a cat: if you have any luggage, whatever you do, take a taxi. Of taxis which, unlike in Buenos Aires, are safe: it’s just that the drivers fancy themselves as the next Lewis Hamilton and take you halfway round Montevideo first. Of a locale which always, to me, felt safe; but only because of porters in every apartment block, security guards outside every bank… and which was punctuated intermittently by news of a particularly shocking murder.
Most Uruguayans believe the country has never been less safe. Guns are readily available; murder and violent crime has risen alarmingly. Compounding this has been the rather ambiguous view of the government, many of whose members have a pathological distrust of the police thanks to their own awful experiences under the dictatorship. There aren’t many societies where the Interior Minister will blame a murder or robbery on ‘the consumer society… poor people want things too’, but it happens in Uruguay. Similarly, not many countries would, with football hooliganism rife, withdraw the police from a big match not to protect them (as was assumed around the world), but actually to protect football fans (and, it might be added, FA voters) from alleged police brutality. Last year, that happened too.
Again and again, what I noted was an extremely well-meaning government full of Leftist thinkers and academics, but which too often did not fully understand either the consequences of their policies, or the reality on the ground. A reality which, in cost of living, is so grim that the refugees Uruguay took in from Syria amid a huge fanfare last year recently asked to return home.
There were plenty of signs, then, that the FA was tiring during its second term – but as the economy continued to grow, poverty and inequality kept falling (reaching, in both cases, the lowest levels anywhere in Latin America: a fantastic achievement), and services by and large continued to deliver, nowhere near enough reason to kick the government out. In the middle of last year, the youthful, optimistic Luis Lacalle Pou, candidate for the centre-right Blancos, who seemed for all the world to have modelled his campaign on that which thrust David Cameron to prominence in 2005, briefly threatened a huge electoral shock. But as his policies came under scrutiny, his momentum fell away: under the marketing gloss lay not much by way of substance.
Luis Lacalle Pou
In any case, Uruguayans resist change like almost no other people anywhere; and Vázquez, the archetypal safe pair of hands, was back. Plenty of people were disenchanted with the government: but Vázquez is not of the Left, and his was a deeply reassuring presence. So much so that against all predictions, the FA actually improved its position – and in 10 years, almost nothing had changed. It still commanded around a half of the electorate; the Blancos remained stranded in the low 30s, the Colorados in the low teens. Another decade in government suddenly seemed inevitable.
But there was a problem. A large one. Vázquez is now 75, and will be 79 by the time of the 2019 election. Astori, now back to being finance minister, is also 75. Mujica is 80. And while the FA commands huge, vibrant support among young people, beneath these three political giants lies a lost generation: an extraordinary dearth not only of new ideas, but immediate future options. The individuals behind the FA’s rise were all radicalised by the 1970s: but memories of that time are fading, and almost nobody politicised during the 1980s or 1990s is ready to step into the breach.
Not only that, but the FA’s victory was so decisive that now, with their leaders old and tired, the far Left began to demand more. Much more. Fear of electoral defeat had gone; complacency and hubris set in instead. The consequences have eroded the government’s position at an increasingly disorienting pace.
Early this year, Uruguay’s public sector deficit was revealed to be much larger than expected: in fact, at 3.5% of GDP, the figure was almost identical to that during and after the 2002 crash. This owed to wild over-expenditure under Mujica (at whom fingers have been pointed with increasing fury); lower than expected tax revenues; and in particular, an enormous loss made by Antel. 2014 was the fourth consecutive year in which the country’s seven state-owned utilities had made an overall loss. Serious irregularities have since been alleged at Ancap, the state oil company; and gross managerial incompetence at OSE, the state water company.
Source: El Observador
During my time in Uruguay, there was always this worry in my head. With the unions becoming increasingly powerful but the state-owned companies inefficient and uncompetitive, was I watching some South American version of 1970s Britain slowly playing out before me? By way of warning, together with my students, I used to discuss how Margaret Thatcher had come to power: just as the British unions had rejected In Place Of Strife and paralysed the Callaghan government, would their Uruguayan counterparts end up bringing something similar upon them?
The alarming economic figures – in tandem with significantly slowing growth, inflation threatening to spiral out of control, and the peso dramatically depreciating against the dollar – called for immediate belt-tightening. Unhappily, the unions – and in Parliament, the far Left – saw it rather differently. On August 6, after a whole series of labour disputes, the first general strike in 7 years took place; followed by an ongoing education strike which has crippled the country.
In Uruguay, salaries for teachers are low – yet they’ve risen by 65% since the FA came to power. As well as mammoth pay rises (demands were for starting salaries to increase from $727/month to $1040/month, and an offer of $865/month was rejected), unions insisted that the education budget be ring fenced at 6% of GDP. The context of the country’s overall situation was treated as irrelevant.
In August, teachers walked out of primary, secondary schools and universities. After around a fortnight of this, the government had had enough: issuing, for the first time since Uruguay returned to democracy, an emergency decree. Vázquez declared that education was an essential public service, and effectively banned teachers from striking for 30 days. This amounted to a declaration of war; the unions certainly took it as such. Many teachers simply ignored it. The FA had entirely lost control of its own members.
Officially, with students facing having to work right up to Christmas (the school year usually ends in November) in order to catch up and take their exams, the strike ended without agreement on 3 September: the government stating that if teachers did not agree to an offer of $860/month, the extra money would be invested in school infrastructure. In practice, especially in Montevideo, industrial action continued: culminating in shambolic scenes on 22 September.
A group of high school students, demanding that the 6% of GDP threshold be met, occupied the Codicen building in the city centre. After several days of fruitless negotiations, a police tactical unit cleared the building – and were attacked outside by members of the Taxicab Drivers and Telephone Workers Union (SUATT); the Memory and Justice organisation; as well as what we might euphemistically term, hangers-on looking for trouble.
Images of what happened, and the all too familiar disarray of the police, can be seen here. Codicen is only a few blocks from Uruguay’s Parliament building: onto which, anti-government graffiti was scrawled. It’s difficult to recall another teachers’ strike anywhere which ended in such chaos.
Typically, much of the focus since has been on alleged police brutality: a running theme in Uruguay. The Left is so focused on human rights, and references the 1970s so often, that the police lack the stalwart government backing which is automatic in almost any other democracy. This leaves the police – who are underfunded, under-prepared, and in many cases, have to live in the same areas as criminals liable to threaten them and their families – frightened of taking decisive action for fear of themselves ending up in court; and plays an obvious part in the country’s growing insecurity. Indeed, over three-and-a-half years in what remains a very macho society, I scarcely met a woman who, if I asked them (which spotting a dispiriting theme, I very often did), hadn’t been robbed or mugged at one point or another.
Adding insult to injury, hugely depressing second quarter economic figures were revealed a fortnight ago. Wholly unexpectedly, GDP actually fell 0.1% compared with Q2 2014, compounding a 1.8% contraction over the first quarter of 2015. Now, not only slowdown, but recession seems increasingly possible: for reasons which are part internal, part external.
Uruguay is particularly dependent on Brazil and China, both of which are in trouble. It will not escape the impact of probable Brazilian and Argentinian devaluations next year; serious problems affecting Russia and the eurozone hardly help either. And as the economist, Pablo Rosselli, has highlighted, the government faces three awful dilemmas: between competitiveness and inflation (the latter is nearing the psychologically critical 10%); real wage growth and employment; public spending and deficit reduction. On each of these, the Left of the Frente Amplio is pulling the wearied administration in a direction it neither wants nor can afford to travel in.
If, as seems inevitable given the rapidly strengthening dollar, inflation does go over 10%, those hit most will be the poorest: those the government is most charged with helping. But of course, continued spending is only feasible if the economy grows in tandem. It’s stopped doing so; Astori and his colleagues are trapped.
Can Uruguay navigate a way out of this? It seems doubtful, not least because those charged with doing so are so old, so tired. For the first time in 11 years in power, the Left has taken a good look at Vázquez and realised, to put it bluntly: “He’s not one of us!” So when earlier this month and to the shock of observers, Uruguay walked out of negotiations over the Trade in Services Agreement (TiSA) – which has proven every bit as controversial as its more famous big brother, the Transatlantic Trade and Investment Partnership (TTIP) – this was a clear case of the tail wagging the dog. The government did so under pressure from the unions; and that Vázquez made such a move well before it was clear what the agreement would actually involve underscored a loss of authority already apparent during last year’s election campaign, which could also be seen in stark terms during the education dispute.
Meanwhile, Mujica, probably the only man who could bring the Left to heel, has lamentably failed to do so, and continues to wax lyrical about some fantasy world unrecognisable to almost all Uruguayans. It’s not been lost on this observer that things started to go wrong domestically almost the moment that Pepe was discovered on the world stage, and began preoccupying himself with his image further afield.
Pulled between Left and Right, the Frente Amplio is as good as broken – but given it’s always been such a loose coalition, perhaps the only surprise should be that it’s taken so long. If you imagine a governing bloc whose two most important, powerful figures are 75-year-old Tony Blair and 80-year-old Jeremy Corbyn, you get a sense of how impossible this conundrum is to solve. The administration has faced more difficulty in six months than over the preceding 10 years; but those problems seem likely to only worsen.
Perhaps much of this is natural. Governments always tire after more than a decade in office; economics are always cyclical too. But there is in all of this a parable. As long as we live in a world of globalised free markets and interdependence – as long as corporations can up and leave if governments seek to put their taxes up – there will only ever be so much that any social democratic party anywhere can achieve. More than that, the moment it becomes too ideological, or frustrated supporters who don’t appreciate what they have drag it away from the centre, it hits more and more trouble. This was Labour’s sad experience after it removed Blair; and for all its considerable achievements, it appears increasingly likely to be the fate of Uruguay’s first ever genuine government of the Left too.