In a day of scorching heat, Luis Lacalle Pou became the eighth president of Uruguay since the return of democracy in 1985. In front of a right-wing coalition, the new president will initiate a series of ambitious reforms that will focus in fighting against public insecurity and changing the economic direction of the country.
Luis Lacalle Pou, son and great-grandson of presidents and leaders of the National Party, will have the challenge of maintaining a consolidated coalition of several parties that includes the extreme right-wing Cabildo Open, moving forward in Parliament a fast procedure law with more than 400 articles and facing opposition from the Broad Front, left-wing coalition that lost the elections last October by less than 40,000 votes after 15 uninterrupted years in the government.
Perhaps for this reason, Lacalle Pou dedicated his speech to Parliament (first protocol act of the day) to detail his government action for the next five years before the country and the numerous foreign guests, which included King Felipe VI and the presidents of Brazil, Paraguay, Chile, Colombia and Bolivia, among others. The president of Argentina, Alberto Fernández, did not travel to Montevideo because of the opening speech given in Parliament in his country.
Lacalle Pou explained Uruguay’s economic situation, warned about its deficit and announced austerity policies, the establishment of a fiscal rule and the opening of a debate on an urgent reform of the social security and pension system. On Monday, on his first day of government, the white leader (color that identifies the National Party) promised to bring together all members of the State security forces to take action against public insecurity, one of his priorities.
At half-time and with the legislative process concluded, the sun still gave no respite and for less than two hours Uruguay had two presidents. It was the period of the Republican liturgy in which Luis Lacalle Pou traveled the few kilometers that separated the Legislative Palace from the Plaza Independencia, where Tabaré Vázquez was waiting to give him the presidential band.
Lacalle Pou toured that final stretch in the Ford V8 Cabriolet club that belonged to his grandfather, Luis Alberto de Herrera, one of the founders of the National Party. He was escorted by dozens of gauchos on horseback with white and blue flags that symbolize the proximity of the PN with the countryside and the interior of Uruguay. In the square, Vázquez, the first left-wing president in the history of Uruguay, who at 16:24 took off his band, put it on his successor and walked to his house, becoming a citizen.
The main project of the “multicolored coalition” that already governs Uruguay is the processing of an Urgent Consideration Law (LUC) that consists of 457 articles on topics as varied as security, education reform, labor relations or politics economical The format of the processing means that if the parliament does not obtain its approval within the established deadlines (and that total about three months as a whole), the law is automatically approved. A mixture of emergency measures and omnibus laws, the opposition considers that the LUC violates the Constitution, since many of its measures are not urgent. As he has shown, in an ironic tone, one of his articles grants authorization for butchers to make artisanal sausages.
The broader chapter of the LUC has to do with the fight against public insecurity and includes the increase of penalties for juvenile offenders, the extension of the powers of police forces, the authorization of identity checks based on suspicion or the increase in penalties. The new Minister of the Interior, Jorge Larrañaga, has been clear about it: “The new government is going to repress” and who does not like that word “is going to have to swallow.”
Citizens expect much from the new administration, since insecurity was the favorite issue of the opposition during the three governments of the left. Although Uruguay is regularly classified as one of the quietest countries in the region, the increase in robberies and murders in recent years is intolerable for a citizenry that compares with Europe and not with its neighbors.
Economy and pensions
Undoubtedly, the economic issue will be one of the main political battles of the coming years, in a country with two large blocks of left and right, of similar weight and strength, but with very different views when assessing the country’s performance .
President Lacalle Pou has warned again about the serious situation in Uruguay due to the increase in unemployment (which is around 9%), the rise in inflation above 8%, the public deficit, which ended 2019 in 4.7% of GDP and the importance of external debt, of excellent credit quality but increasing if compared to GDP.
The outgoing administration sees the thing of a very different color: Uruguay has been escaping from the crisis and recession suffered by the countries of the region and registers 15 years of economic growth, the 2020 outlook tends to rise, the country has income highest per capita in Latin America, the lowest poverty rates in the region and the lowest social differences. Sure of his balance, the Government of Vázquez received the International Monetary Fund last February to do one of his periodic analyzes. The mission report noted Uruguay’s “enviable position” in the region, but warned of the importance of correcting the imbalances suffered by public accounts.
For the conservative coalition, the need for adjustment and austerity policies is pressing, and these reforms include changes in the pension system. And that will be, without a doubt, another of the great political battles of the next five years.
In the last legislature, the left-wing parliamentary majority reformed the retirements of the military, which represent a public deficit similar to that of the rest of the Uruguayan pension system. The reaction of the military was the creation of the Open Cabildo, a party that in less than six months took over 11% of the votes in the last elections and today, a member of the ruling coalition, has several deputies and two ministers . In this context, the changes made to the system will be controversial.