MercoPress. South Atlantic News Agency

Left wing coalition poised to win Uruguayan election.

Tabaré Vázquez a 64-year-old doctor, former mayor of the capital Montevideo and leader of a left wing coalition with more than 50% of vote intention seems poised to become Uruguay's next president in Sunday's general election with out the need of a run-off at the end of November.

If successful it will be the first time that the so called "historic political parties", Colorado and Nacional, whose existence can be tracked back to the foundation of independent Uruguay in 1830, are defeated and will not be in office.

The left wing Broad Front or Progressive Encounter, is a 1971 born coalition of left wing parties from former guerrillas of the seventies, Soviet style Communists, traditional Socialists to Social democrats and Christian democrats, permitted under Uruguayan electoral rules favoring catch all parties, who have steadily and successfully harvested growing discontent with the two parties system that have dominated Uruguayan politics for over a century and a half.

Mr. Vázquez's pro-social welfare policies appeal to an electorate seeking an alternative to the free-market politics of the past decade that ended in deep financial crises in Argentina, Brazil and Uruguay.

In July 2002, following Brazil's drastic devaluation of its currency in 1999 and the melting of the Argentine economy in 2001, Uruguay which until then was a reliable offshore financial haven suffered a bank run which cost the country half its bank deposits plunging it into a dramatic downturn, only reverted with a direct bridge loan from the United States Treasury.

IMF officials insisted Uruguay follow Argentina's steps and default but current President Jorge Batlle and his cabinet rejected point blank the suggestion and appealed directly to the Bush administration. However the economy contracted violently, unemployment soared and thousands of young people migrated to their roots in Spain, Italy and other attractive destinations such as the US, Canada, Australia while a general feeling of frustration invaded the country.

Mr. Vázquez's closest challenger is the centre-right National Party or Blanco candidate Jorge Larrañaga, a young politician from the Uruguayan pampas who often dresses as a traditional gaucho and organizes political rallies on horse back appealing to the more traditional vote in the farmland. Opinion polls indicate he has 32/35% of vote intention. Mr. Larrañaga's strategy of privileging the left wing of his party in an attempt to combat Mr. Vazquez helped him almost double his support in a few months but since reaching above 30% of the electorate, his message seems to have lost its attraction and his right wing is weary of some of his proposals.

Meantime Vázquez and his coalition, extending from the centre-left to the far left, don't seem to concern foreign investors holding a big portion of Uruguay's US$11 billion debt in a country whose GDP almost overnight collapsed from 21 to 13 billion US dollars.

"Over the last year, Vázquez has sent many good signals to the market including the anticipated announcement of Danilo Astori as his Finance minister" said Arturo Porcekansky, a respected Wall Street analyst and expert in emerging markets.

Mr. Astori is a former Dean of Uruguay's renowned Economics School, originally a radical Marxist, who has become an orthodox, balanced budget preacher who insists foreign commitments must be honoured in spite of some proposals form inside the coalition insisting in neighboring Argentine president Kirchner confrontation attitude.

Mr. Astori has made it a point to praise Brazil's president Lula da Silva, a leader who has won over investors with market-pleasing policies despite his historic opposition to international capitalism.

Mr. Vázquez and Mr. Astori have already visited the United States on several occasions to tell bondholders and multilateral lenders he will respect Uruguay's commitments, including the terms of last year's successful voluntary debt restructuring.

"He will try to emphasize macroeconomic stability with a tinge of social justice," said Rebecca Evans, senior research fellow at the Washington-based Council on Hemispheric Affairs.

Although the economy is roaring back from the crippling 1999/2002 recession with double-digit growth forecast for 2004, 14% of the workforce remains unemployed and one-third of Uruguayans live below the poverty line.

"Uruguayans know where there is continuity and where there is change" Vázquez said at the final campaign rally. "People will ask what the traditional parties can do for them and why they haven't done that already", adding that finally "illusion has defeated fear".

Even if the election went to a runoff at the end of November which seems most unlikely, pollsters predict Mr. Vázquez would win this time.

In 1999 Colorado candidate Jorge Battle joined the Blancos in the runoff to defeat Mr. Vázquez.

The Colorado party candidate is Guillermo Stirling, for two consecutive periods Minister of Interior but he has proven to be an unconvincing candidate even for Colorado followers and trails with 12,5% of vote intention.