On the same day that more than 15.6 million Brazilian voters participate in the second round of municipal elections, another 2.7 million Uruguayan voters cast their votes to choose who will govern the neighboring country.
On Sunday (27) the general election in Uruguay will be held, with a dispute between the candidates Alvaro Delgado e Yamandu Orsi – political heirs of current president Luis Alberto Lacalle Pou and former Uruguayan president Pepe Mujica.
Center-left, Orsi leads the polls and announced that he plans to avoid unpopular tax increases, despite the increasing public deficit – 64.7% of GDP. Instead, it aims to stimulate economic growth.
In his first interview with the international press ahead of the Oct. 27 vote, Orsi, a 57-year-old former regional mayor, played down fears that his government would try to increase tax revenue by raising taxes on the rich or on corporations, which would would harm the country’s favorable reputation with investors.
“I don’t see the need to raise taxes,” the candidate from the left-wing Frente Amplio coalition told Reuters in the capital Montevideo. “What is needed is growth and making the economy grow.”
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Economic growth in the relatively rich agricultural nation of 3.4 million people slowed last year – GDP grew just 0.4% in 2023 – but is stronger this year. According to a forecast from the International Monetary Fund (IMF), the economy is expected to grow 3.2% in 2024.
The country has been running regular fiscal deficits, which analysts say any new government will need to address. Investment bank JP Morgan wrote in an October note that the new government will need to carry out “structural reforms” to prevent the fiscal deficit from widening.
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Uruguay in Mercosur
Yamandu Orsi also signaled that he could curb the current conservative government’s push for a free trade agreement with China, focusing more on agreements through the Mercosur regional trade bloc and neighboring giant Brazil.
“We must always work to be within the limit of what Mercosur allows us, without going beyond it,” he said, referring to the bloc that includes Argentina, Brazil and other nearby countries. He said breaking with the bloc would be “absurd” and “unrealistic”.
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Orsi added, however, that the door will always be open to investments from China, Uruguay’s largest trading partner. “Let’s not forget that the Chinese have the Belt and Road proposal, which is very useful for us,” he said, referring to China’s initiative to connect Asia with Europe and Africa through land and sea networks.
Uruguay’s current president, Luis Lacalle Pou, has fueled tensions with other Mercosur members with his plans for trade agreements outside the bloc. Critics of Mercosur say it prevents Uruguay from increasing its exports of products such as beef and soy. Lacalle Pou remains popular, but Uruguay’s Constitution does not allow leaders to run for immediate re-election.
“Economic collapse”
In recent weeks, the main discussion in Uruguayan newspapers has been economic. In addition to the presidential choice, the country needs to decide whether to approve a pension reform in a plebiscite to expand retirement rights, with an estimated cost of US$23 billion (around R$130.8 billion). For the government and conservative Delgado, approval of the proposal would lead to the country’s economic collapse.
Uruguay could join other Latin American countries that have abandoned or scaled back retirement systems based on individual savings accounts. Argentina nationalized its pension companies in 2008, while Chile and Peru allowed savers to withdraw billions of dollars in retirement savings.
In the final stretch
Today, both Delgado and Orsi ended their campaign commitments with messages to Uruguayan voters.
In his speech, Orsi said he would not make promises and would instead focus on five commitments, including: ensuring consensus, economic stability and social protection. Álvaro Delgado, in turn, sought to attract the undecided and those who do not believe in politics to gain votes in the final stretch of the campaign. “Don’t let others decide for you. Each of you has to be the protagonist of your own decision.”
*With information from news agencies
