Latin America Advisor

A Daily Publication of The Dialogue

What Does a Close Presidential Vote Mean for Uruguay?

Luis Lacalle Pou of the right-of-center National Party (or Blancos) is leading in the vote count in Uruguay’s presidential runoff. // File Photo: Lacalle Pou Campaign.

Former Senator Luis Lacalle Pou appeared to have edged out his rival, former Montevideo Mayor Daniel Martínez, in Sunday’s presidential election in Uruguay. Martínez has not conceded. A victory by Lacalle Pou, a  conservative and the son of a former president, would put an end to 15 years of rule by the leftist Broad Front coalition. What are the biggest takeaways from Uruguay’s election? What challenges will the eventual winner need to address first as Uruguay’s next president? What will the closer-than-expected election result mean for the next president’s ability to govern and set his own agenda?

David Nelson, CEO of Global Business Policy and former US ambassador to Uruguay: “Although the final results may not be available before Friday, Martínez would need to win 90 percent of the ballots left to count, but those are mostly from the interior of the country where Lacalle dominated. So it seems highly likely there will be a transition to the ‘traditional’ parties after 15 years of rule by the Frente Amplio. The close vote probably ensures that Lacalle will seek to unite the country, rather than pursue policies that would imply a ‘domination’ by the right. The non-Frente Amplio parties have a majority in Congress, but they are fragmented so it will be a challenge for Lacalle to maintain his coalition to pass laws—particularly with the new hard-right party led by General Manini Ríos. It may be time for Uruguayans to recognize a sea change in their traditional political structure—for many years the dominant parties, the Colorados and Blancos, were in fact each coalitions with diverse ideologies. Once again, Uruguay now has two major political coalitions—with the Blancos and Colorados united as one facing the Frente Amplio. Can the traditional parties overcome historical rivalries to make that work? Immediate policy issues the new government faces include improving personal security, education and the somewhat stagnant economy. In the regional context, dealing with the new government in Argentina could be a challenge, and it seems likely Uruguay could move toward the majority South American view of Venezuela. But the big story is that at a time of popular political upheavals throughout the region, Uruguay celebrated a democratic election in which the popular will is respected.”

Sergio Abreu, president of the Uruguayan Council for Foreign Affairs and former Uruguayan minister of foreign affairs: “Uruguay has held an exceptionally democratic event, in line with its mature institutional tradition. Lacalle Pou leads a coalition of five parties with majority in the Congress. The new government must reach macroeconomic stability due to the 5 percent fiscal deficit. Social programs will be maintained, although a strict evaluation of destined resources and results is needed. Dialogue will be key to governability because the country is divided. The new governments in Brazil, Paraguay and Uruguay will promote an open market within Mercosur, a new strategy which could affect Argentina’s protectionist model. They will consolidate the European Union-Mercosur Treaty and other free-market agreements, including one with the United States. Uruguay is a hinge in the Southern Cone and is also part of the agriculture business chain. Multimodal transport plays an important role in terms of infrastructure, mainly the Paraná-Paraguay waterway, which is vital for Uruguayan ports. The Guarani Aquifer is the second-largest water reservoir in the world and became a priority in ecological policies; its one million square kilometers are shared by Brazil, Argentina, Paraguay and Uruguay. The new government will carry out audits, mainly regarding Venezuelan business related to several frustrated projects. The current Uruguayan government defends Maduro’s regime and maintains a solid relationship with the Foro de São Paulo. Lacalle Pou will revise these links without being involved in any interventions in third countries’ domestic issues.”

Charles H. Blake, professor of political science at James Madison University’s School of Public & International Affairs: “The Broad Front (FA) enjoyed successes in economic growth and poverty reduction, but it is difficult within a competitive democracy to govern without interruption for much more than a decade. The various opposition candidates who emphasized perceived shortcomings in the FA’s anti-crime and pro-growth policies will now face the task of trying to meet the expectations they fanned during the campaign. While the FA is a center-left coalition with nearly five decades in existence, Luis Lacalle Pou’s ‘multicolor’ center-right coalition did not emerge until after the October 2019 legislative elections. If this week’s electoral recount confirms Lacalle Pou’s victory, his presidency’s dynamics will be shaped by his ability to retain majority support in the legislature. In the Senate, Lacalle Pou’s National Party needs the support of the Colorado Party and of retired General Guido Manini Ríos’ brand-new ‘Open Town Hall’ (Cabildo Abierto) movement to mobilize a maximum of 17 votes in that 30-seat chamber. In the Chamber of Deputies, the legislators from the National, Colorado, and Cabildo Abierto parties will hold 54 of the 99 seats. In contrast, although voters from the Independent Party and from the Party of the People were important to Sunday’s narrow victory, those two parties’ tiny legislative presence likely gives them less influence moving forward. Given that Manini Ríos ran a more successful presidential campaign that had been envisioned and that he likely plans to run again in 2024, it will be interesting to see whether his knack for seeking publicity disrupts this legislative coalition.”

Patricio Zamorano, co-director of the Council on Hemispheric Affairs: “The recent presidential election in Uruguay shows, once again, the high level of polarization that characterizes several democracies in the hemisphere. Again, neither presidential candidate garnered an absolute majority, with only a narrow margin between Luis Lacalle Pou and Daniel Martínez so far. A relevant takeaway is how close this race turned out, considering that most pre-election polls showed a comfortable advantage for the conservative Lacalle Pou and electoral fatigue of the left, which has been in power for 15 years. Most polling companies projected a six-point, plus or minus, difference in favor of Lacalle Pou, but the election has ended up in a technical tie. Although Uruguay has shown great progress in decreasing poverty, maintaining a stable middle class, and implementing broad state-run programs, the electoral campaign was held in a context of high unemployment, low agricultural commodity prices and slow GDP growth. These factors help explain the decline in support for President Tabaré Vázquez’s party. However, Sunday’s results should create a sense of moderation for the incoming right-wing government. Voting is obligatory in Uruguay, so the virtual tie closely reflects the polarization of the electorate. This polarization ought to be considered as a base for permanent negotiation and the continuation of social policies that work for most of the population. The same tie emerged in recent legislative elections, reinforcing the need to find consensus and avoid acute social confrontations such as the ones seen in Ecuador, Chile, Bolivia and Colombia.”

Francisco Panizza, associate professor of Latin American Politics in the Department of Government at the London School of Economics and Political Science: “If confirmed by the Electoral Court, Lacalle Pou’s victory will put an end to 15 years of rule by the center-left Frente Amplio. But the narrow victory and the composition of the winning coalition will present significant challenges for the new president. On the plus side for the new president, the ruling coalition will enjoy a parliamentary majority. There is also a common program that sets the basis for the legislative agenda. But questions remain about political differences within the government coalition, particularly concerning the far-right Cabildo Abierto party. A number of issues are set to get priority in the new administration. High among these is the fiscal deficit, which currently hovers around 5 percent of GDP. A pension reform will have to be an important part of the deficit reduction package in the medium term, but as shown almost everywhere, pension reforms tend to be politically conflictive. Together with the economy, education and crime, two issues on which the outgoing government fared badly, are likely to be at top of the reform agenda. The reforms, however, are likely to face strong opposition from the unions and other social movements. As for the Frente Amplio, it will remain by far the largest party in parliament. Together with the narrow nature of its defeat in the presidential runoff and its close links with social movements, it will be a strong opposition force and remain a key factor in Uruguayan politics.”

The Latin America Advisor features Q&A from leaders in politics, economics, and finance every business day. It is available to members of the Dialogue’s Corporate Program and others by subscription.