Lacalle Pou's Government and Uruguay's 0-0

Ignacio de Posadas, Minister of Economy from 1992 to 1995 during Dr. Luis Alberto Lacalle's government, in reference to the increase in public spending promoted at that time by Dr. Julio María Sanguinetti, recounted in an interview that he went to talk to him to somehow stop it, as they were seeking fiscal order to lower high inflation. Dr. Sanguinetti's response was: "Only immature people like Lacalle and Batlle want to change Uruguay, Uruguay was, is, and will be like that." This period of Lacalle Pou's government can be said to be a true reflection of the "Uruguay that is, was, and will be like that" (1) and another expression of the country of the tie that Dr. Sanguinetti so praises. When history books about Uruguay are written many years from now, it will only remain on the pages for having been in power during the pandemic, not for reforms or significant historical events.

To analyze the reforms implemented and those that could have been carried out but were not, it is crucial to consider the political and economic context of Uruguay during his term, as well as the expectations caused during his electoral campaign.

Economic and Fiscal Reforms: Lacalle Pou took office with the promise of reducing the size of the State and promoting a more liberal approach to the economy. However, there was no significant reduction in public spending or a notable decrease in public debt. Gross debt as a percentage of GDP increased from 60 to 70% from 2019 to 2024 (2), suggesting that fiscal reforms were not implemented effectively or sufficiently.

Taxes and Free Market: There were expectations of reforms that would reduce the tax burden and promote the free market. However, not enough progress was made in these areas, which has caused discontent among entrepreneurs who expected a more favorable business environment.

Public Security Policies: This is an essential aspect for the Frente Amplio to lose in 2019. Although attempts were made to toughen the penal code and measures were introduced to combat crime, such as the security reform in the Law of Urgent Consideration (LUC), the results in terms of crime reduction were not as expected. There were criticisms about the lack of focus on the roots of crime and the effectiveness of punitive policies.

Educational Reforms: Lacalle Pou's educational reform was a cornerstone of his term, but it faced significant resistance from teacher unions. Despite being approved, the implementation has been controversial and there was no broad consensus on the proposed changes, which could be seen as an incomplete reform.

Labor and Social Reforms: The LUC introduced some labor reforms, but these were limited and not all the measures proposed during the campaign were implemented. There was an attempt to limit the right to strike and to make labor relations more flexible, but these changes faced opposition and were not as deep as some expected. In any case, cases like Yazaki show that there were no significant changes.

Social Security: Although a reform in social security was achieved, there were criticisms and plebiscites against it that indicated a lack of consensus on its effectiveness and fairness. The plebiscite promoted by the PIT-CNT against the pension reform, although it did not reach the minimum required to modify it, was an indicator of the resistance these reforms encountered. 

Lacalle Pou's term was characterized by attempts at reform in various areas, but the implementation of these reforms faced numerous obstacles, from union resistance to political and economic challenges stemming from the COVID-19 pandemic and other external factors. While progress was made in some aspects, the deep transformation that some sectors expected was not achieved, especially regarding a reduction of the State, free market reforms, and structural changes in education and security, and everything was very close to what we presumed in 2019 (3).

Of all these timidly addressed reforms, I focus for a moment on the issue of security, which was the flagship of the campaigns of Blancos and Colorados since 2009 given the growing insecurity in the Frente Amplio governments. Countless interpellations to Minister Bonomi and constant criticisms did not yield electoral results until 2019, when in Tabaré Vázquez's last term, insecurity seemed to have hit rock bottom, coupled with economic decline, which led to a certain percentage of Frente Amplio votes moving to Lacalle Pou from 2014 to 2019, allowing him to win by a narrow margin in the runoff. If we look at the votes obtained by the Multicolor Coalition added in the First Round of 2019, it obtained a comfortable parliamentary majority and, given the peculiarity of the Uruguayan electoral system, the House of Representatives is voted in the First Round and lasts 5 years, without midterm elections like in Argentina where the Legislative and Executive Powers are out of sync in terms of the majorities that people vote for over time. In Uruguay, the period of representation of majorities in terms of the Legislative and Executive is the same and, therefore, adding the allied seats, Lacalle had the possibility of having parliamentary majorities, an opportunity he took advantage of only for the LUC, Law of Urgent Consideration, although he had to make cuts to satisfy allies like with the issue of the de-monopolization of Ancap.