Another Power Shift Looms in Latin America
Another Power Shift Looms in Latin America
(Bloomberg) -- Uruguayans will elect their president Sunday with polls suggesting the center-right National Party is on course to end 15 years of left-wing rule in yet another power shift in Latin America.
Ex-senator Luis Lacalle Pou, the son of a former president, is currently favorite to become Uruguay’s next leader. A career politician with almost two decades in Congress, and a failed bid for the presidency in 2014, Lacalle Pou has made restoring investor confidence via spending cuts a key policy proposal. Advisers to the opposition candidate promise to reduce wasteful spending by $900 million in 2020 alone.
With incumbents struggling across Latin America, Uruguay’s shift to the right became clear in the general election on Oct. 27. A reinvigorated opposition tapped into voter discontent over a stagnant economy, rising unemployment and crime to end the ruling Broad Front’s control of Congress.
Uruguay’s economy hasn’t stopped growing since 2003, allowing the Broad Front to splurge on social programs, pensions and health care. However, fiscal largess has led to unsustainable deficits that not even repeated tax hikes have managed to plug.
While the Broad Front’s presidential candidate, Daniel Martinez, a former governor of Montevideo, beat Lacalle Pou in the first round of the presidential race on Oct. 27, other opposition candidates have since rallied round the National Party candidate, pushing him into the lead.
With Uruguay’s access to cheap credit threatened by an overall public sector deficit running close to 5% of GDP, Lacalle Pou has vowed to restore order to the nation’s finances.
Deficit fighting measures in other South American countries have triggered a backlash from powerful special interest groups and voters in recent months.
The social discontent sweeping the region has filtered into Uruguay’s presidential campaign with Martinez warning voters that that an opposition victory would mean years of “savage” austerity that could destabilize the country.
“Believing that shrinking the state can be done without a social cost for the majority is at the very least delusional. You know how this ends? Like in Argentina, Brazil; like what is happening in our beloved Latin America,” Martinez, 62, told supporters in the closing speech of his campaign Wednesday.
Lacalle Pou, meanwhile, has told voters that the Broad Front’s policies have led to high taxes, rising unemployment and bankruptcies.
‘Team Builder’
The opposition candidate doesn’t carry the ideological baggage of older Uruguayan politicians who came of age during the Cold War nor does he embrace their rigid, top down leadership style, according to Pablo da Silveira, a member of Lacalle Pou’s inner circle who oversaw the drafting of his policy proposals.
“He’s a team builder. He delegates a lot,” said Da Silveira, who the candidate has tapped to be his education minister.
Born into the nation’s political elite, Lacalle Pou makes no secret of his privileged background. But his affluent lifestyle -- including a home in a gated community and a passion for surfing -- hasn’t proven a political liability in a country largely skeptical of the trappings of wealth.
Just days after last month’s vote, he announced a five-party coalition spanning the center left to the hard right that would give his presidency 17 of the 30 seats in the Senate and 56 of the 99 seats in the lower house.
If Lacalle Pou wins Sunday, the coalition’s lifespan will depend to a large degree on his performance as president, political scientist and consultant Fernanda Boidi said.
“If the government doesn’t do well there are incentives to leave earlier,” she said. “As we approach the next election cycle coalition leaders would have more of an incentive to break away from Lacalle Pou.”
The National Party candidate’s leadership skills and the coalition’s cohesion will likely be put to the test if as president he tries to make good on his campaign promises to eliminate wasteful spending and overhaul the pension and public education systems.
“Next year is going to be a very turbulent year because decisions are going to have to be taken if we want to change things,” National Party lawmaker Jorge Gandini said in an interview. He warned that there was likely to be “push back” from the left.
Policy Proposals
Martinez
- Create 90,000 new jobs; retrain at least 400,000 people
- Government support for fast growing sectors
- Cut the deficit through social security reform, faster growth
- More effective policing, rehabilitate convicted criminals
Lacalle Pou
- Social security, public education reforms
- Lower fuel, power prices to make companies more competitive
- Attack the deficit by cutting wasteful spending; no tax increases
- More effective policing, rehabilitate convicted criminals
Voting is obligatory for Uruguay’s 2.7 million registered voters. Voting stations open from 8:00 a.m. to 7:30 p.m. local time with the Electoral Court expected to publish the preliminary results later that evening. The winner will start his five-year term March 1, 2020.
To contact the reporter on this story: Ken Parks in Montevideo at kparks8@bloomberg.net
To contact the editors responsible for this story: Daniel Cancel at dcancel@bloomberg.net, Bruce Douglas, Juan Pablo Spinetto
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