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Montevideo, August 15th 2018 - 16:38 UTC

A long announced summer surprise for the Uruguayan government of Vazquez and Mujica

Tuesday, January 23rd 2018 - 07:10 UTC
Full article 2 comments
Following the meeting with president Vazquez, farmers doubled their marches and anticipated the huge meeting scheduled for Tuesday in Durazno. Following the meeting with president Vazquez, farmers doubled their marches and anticipated the huge meeting scheduled for Tuesday in Durazno.
Mujica said the problem was not small farmers unable to make ends meet, but rather land ownership, since this is highly concentrated in few hands Mujica said the problem was not small farmers unable to make ends meet, but rather land ownership, since this is highly concentrated in few hands
The Uruguayan government needs to sustain the “investment grade” to have easy and cheap access to funds to meet its ongoing budget deficit. The Uruguayan government needs to sustain the “investment grade” to have easy and cheap access to funds to meet its ongoing budget deficit.
A policy of a “cheap” dollar promotes imports, such as new cars, overseas travels, but is contrary to the farming sector which faces a significant increase in costs A policy of a “cheap” dollar promotes imports, such as new cars, overseas travels, but is contrary to the farming sector which faces a significant increase in costs

Anywhere between 8.000 and 50.000 people are expected to convene on Tuesday to Durazno, central Uruguay, to protest and demand solutions to what is seen as an over bloated government, fiscal strangling, incompetent management of government companies and an overall dissatisfaction with the results of these policies and deaf political ears to the ongoing complaints.

 The protest originally was speared headed by the farming sector, almost spontaneously, who now for several days have been marching with their tractors, harvesters, trucks, vans and on horseback, along Uruguay's main highways in an attempt to have president Tabare Vazquez, --enjoying summer holidays--, to grant them an audience to put on the table and discuss the issues with the intention of finding a solution or palliatives.

The spontaneity and intensity of the marches and their display on live television surprised and scared the Uruguayan government with president Vazquez advancing the date of the meeting originally scheduled for late February, with some conditions: he only met with the different farming sectors organized groupings, (receiving spontaneous non institutional groupings would be equivalent to 'chaos'), the government will not turn back on its current economic policy, and last but not least, the delay was understandable since the president also has the right to enjoy summer holidays.

The meeting with the institutional representatives from the different farming sectors did not advance much be it not for the promise of sector discussion tables, underlining that the situation was not homogeneous.

As can be expected such an autocratic reply from Vazquez, who again gave evidence of his supine ignorance of farming affairs (he demanded that the rice sector must increase its productivity, when it is world known that Uruguay's rice planters are among the most efficient, competing in grain quality only with the United States), farmers doubled their marches and anticipated this huge meeting scheduled for Tuesday in Durazno.

But not only did the fiscal issue and mismanagement of government companies, which in Uruguay work on a monopoly status, trigger immediate support from other sectors of the economy, industry, exporters, retailers, wineries, even real estate operators, but they also publicly aired their long standing similar complaints and promised to be present this Tuesday in support of the major demonstration.

The government's surprise and slow reaction rapidly picked up speed and coalition members of Congress and the trade unions umbrella organization, under Communist control, attacked the farmers' movement and claimed it was a political opposition ploy in anticipation of the 2019 elections, and also showed how greedy landowners in Uruguay were for ignoring the plight of urban workers.

Ex president “sloppy Joe”, Jose Mujica also joined the public debate and said the problem was not the small farmers unable to meet ends, but that most of the land in Uruguay was in the hand of a very few landowners, a statement with no evidence to support it, according to official stats.

Marchers in Durazno are expected to read a statement with their demands, which they pointed out are not in a protest spirit but with the purpose of contributing to find a way out to the situation. Among them are significant reductions in the price of fuel and power; soft credits for the most vulnerable sectors such as dairy farming; an end to the increase of the government payroll (since the current coalition of Vazquez and Mujica have been in office, the number of government staff has increased by 70.000) and a most controversial proposal to take the price of the US dollar from the current 29 Pesos to 36 Pesos, which supposedly will boost the income of commodities exports in Pesos.

The fact is that under the administrations of Vazquez and Mujica, political patronizing and cronyism have been rampant and despite almost fifteen years of economic success, tail winds with high prices for commodities, the government has been unable to control the budget deficit that ranges between 3.3% and 4% of GDP. Uruguay thus needs of global markets to borrow and cover the deficit, and for this the investment grade from the credit agencies is crucial since it makes access easier and cheaper.

Thus a cheap US dollar in Pesos, makes Uruguay a very expensive costly country to produce while there is a flood of imports and a consumers' boom: new cars, overseas travel, sumptuary goods, but mainly for urban population with well paid jobs mostly in the government and private sectors. This contrasts with costs for farming and as a matter of fact for setting up any business. Government desperately needs revenue to lower the deficit and retain the investment grade: so far it has been done mainly by increasing taxes directly or indirectly through the goods and services provided by government monopolies managed by incompetent political appointees.

Thus Durazno will prove to be a well announced and anticipated summer surprise. Organizers have anticipated that only Uruguayan flags will be flown and if any politicians from government or opposition turn up, this will be considered as personal participations, no colors or parties involved.

 

Top Comments

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  • aedi

    Well, no more than 2800 turned up !!. Hardly a concern for the government.

    Jan 25th, 2018 - 03:47 am +1
  • British_Kirchnerist

    “As can be expected such an autocratic reply from Vazquez...Ex president “sloppy Joe”, Jose Mujica also joined the public debate”

    More nice unbiased reporting I see ;)

    Jan 23rd, 2018 - 09:33 am 0
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