Uruguay, no longer the Switzerland of South America

On March 1^st 2020, Luis Lacalle Pou started his five-year term as new President of Uruguay, bringing to an end 15 years of leftist government in what is Latin America’s smallest country. It has an estimated population of 3.4 million people. 500,000 citizens live aboard, mostly in the USA and Spain. Interestingly, the name can also refer to the river that partly marks the nation’s borders with Argentina and Brazil.

With a size of approximately 176,000 square kilometers, about 87% of the territory consists of arable land and permanent pasture. Despite diversification in the 21^st century, the economy remains very dependent on agricultural products like cellulose, beef, soybeans, rice, wheat, dairy products; fish; lumber, tobacco and wine, as well as the prices of these raw materials on the international markets. At the same time, traditional agro-exports are threatened by automatization. Last year, unemployment was close to 10%.

Lacalle Pou, from the center-right National Party, is the son of former President Luis Alberto Lacalle de Herrera. A 46-year-old lawyer and a former senator, he defeated governing Socialist Daniel Martínez in a much disputed runoff election in November 2019.

The new leader is currently under quarantine with other high-ranking officials as last week a minister tested positive for the coronavirus. After the first two cases where detected on March 13^th, Uruguay immediately closed it borders and cancelled flights, classes, religious services and mass events like football games and concerts. As a result, only 823 cases and 22 deaths have been registered so far.

In secular Uruguay, Christmas is officially known as “Family Day” and the Easter break is referred to as “Tourism Week.” In 1907, it was the first Latin American country to pass a divorce law. After Cuba and Guyana, elective abortion was legalized in 2012. Growing cannabis is legal since 2014 and since 2017, selected pharmacies are allowed to sell it. The State spends about 25% of its GDP on social security. Excellent health care is relatively affordable. Electricity generation based on wind is the best in the Americas and in third place worldwide, with 35% of the total generated.

On the other hand, the once lauded educational system has weakened over the last decades, as only 40% of all students finish secondary education. The emigration of young adults and a low birth rate of 1.7 are causing Uruguay’s population to age rapidly, only second to Cuba: 12% of the population is over 60.

Long considered to be the most European country in the whole of Latin America, it has experienced continuous economic growth for the last 16 years. With the highest income in the region for the last seven years, levels of poverty are comparable to those on the Old Continent. Having been spared the political instability that recently has affected Bolivia, Chile, Ecuador, and in particular Venezuela, Uruguay´s situation looks even more exceptional.

Still, just like Western Europeans, Uruguayans tend to despise the high standard of living they enjoy and wallow in memories of supposedly better times regarding culture, the economy and even football. Uruguay in 1930 won the First World Cup at home and again in 1954. At the same time, post-materialistic ideas are popular and local progressives prefer the term “republic” to “nation”. That might be the reason why in 2010 José Mujica, a professional guerrilla, was elected president. He is a former member of the notorious Tupamaros, a Marxist terrorist group operating from 1967 to 1972 that killed about 50 policemen, soldiers and civilians. Besides that, a son of Raúl Sendic, founder of the armed gang, was vice president from March 2015 to September 2017.

Nowadays, a new non-political lawlessness exists: compared to 2017, homicides in 2018 went up by 45%, violent robberies rose by 53% and non-violent cases by 23% due to widespread smuggling of firearms. Uruguay has become a hub for drugs from Colombia, which accounts for 70% of global cocaine production, as well as from Peru and Bolivia. In November 2019, six tons got confiscated in the harbor of Montevideo, and another three in December alone. Other considerable amounts of narcotics from Uruguay were seized abroad: in May 2019, police found 600 kilos on a plane that landed in Basel. Custom agents in Hamburg first discovered 440 kilos in April and then 4.5 tons in August. That seizure was the largest in Germany’s history.

There are multiple reasons why the Uruguay authorities seem overwhelmed by this steadily increasing problem: a lack of personnel, deficient training, and the absence of a special police force dealing with this kind of felonies result in a low rate of law enforcement and weak border controls. Money laundering is facilitated by strict banking secrecy laws. The lure of easy money encourages corruption. Last, but not least, local consumption keeps increasing.

Besides that, or related to it, Uruguay has the second highest suicide rate on the subcontinent behind Guyana, double the world´s average. The reputation of a place that used to be known as the “Switzerland of South America” obviously doesn’t reflect reality anymore. Lacalle Pou faces the challenge of trying to restore it.