Voters reject privatization
International Viewpoint #242 February 1993
ON December 13, 1992, 72% of Uruguay's voters rejected a referendum in favour of a privatization programme (euphemistically called "the law on public enterprises") proposed by President Lacalle's government. ERNESTO HERRERA -Montevideo, December 27, 1992
T HE scale of the govern-
ment's defeat represents a major victory for the left, organized in the Broad Front (Frente Amplio - FA) coalition, even if the victory was "shared" with a faction of the one of Uruguay's two traditional bourgeois parties, the Colorado Party, headed by former president Sanguinetti.
The significance of the result was explained by a leading spokesman of finance capital on December 13. "Uruguayans have said 'no' to a reform of the state which would modernize it and privatize part of its activities... The electorate has clearly expressed its rejection of any continuation with privatization, turning its back on the lessons from
Consistent mass activity, mainly by the Frente Amplio, and in particular the Movement for Popular Participation (MPP) inside it, and by the unions in the PIT-CNT confederation, was needed to get round the obstacles to the holding of
First of all 15,000 signatures had to be submitted to win the right to petition the whole electorate for or against the holding of a referendum. Then 25% of the electorate had to vote yes for the referendum to take place. This succeeded on the second attempt; on June only some 20% voted for a referendum, but in October the figure reached 32%.
The government had argued that its programme of economic "disengagewould open the way to development, in particular through an influx of foreign capital. Finance and Economy Minister De Posadas read the list of the government's achievements: a
### URUGUAY yearly growth rate of 7.3%, a fall in the budget deficit to 0.5%, a reduction in the foreign debt to 20.5% of GDP an inflation rate of 1.9% in November.
However, the population experiences another economy to the one they describe
- a growth of unemployment and informal working, a fall in real wages of 7% in the past year and enterprise closures as a result of the changes made to prepare entry into Mercosur - the free trade zone including Brazil, Argentina, Uruguay and Paraguay.
Some 700,000 people have no access to healthcare, more people are dropping out of school and university, there is a shortage of 100,000 homes and permanent youth emigration as a result of a lack of opportunities in the country, 41% of Uruguayan children live in poverty and 29% of households lack basic necessities all underpinned by the constant haemorrhage of the national wealth represented by interest payments on the foreign debt.
This lived economy was the cause of the rise of social struggles in the pre-referendum period. Almost every sector has taken part, including doctors, magistrates, police and football players. It is clear that very few people believe in the promised benefits of Mercosur. A recent survey found that 31% had a negative view of the integration process, 35% were more or less unfavourable and 19% had a positive assessment.
### Crisis of institutions
The referendum has also revealed the crisis of the country's institutions and the fragmentation of its political parties. The two big parties, the Blancos and the Colorados, split wide open over the privatization and state reform issues.
While the current Blanco government and its Colorado ally Jorge Battile want to prioritze finance capital and the service sector with the idea of turning the country into a tax paradise in the framework of integration with Brazil, Argentina and Paraguay, the Colorado faction headed by Sanguinetti has a far more gradualist approach to privatization, favouring support for industry and agriculture aimed at export and maintaining a role for the state and a much more critical attitude
Apart from the internal crisis in the two traditional parties there is also a crisis of the two-party system as such after the creation of the FA in 1971. The two traditional parties had 77% of the vote in 1971 and 66.3% in 1989. Polls suggest that the Frente Amplio would now challenge the Colorados for second place in an election.
The Argentine review Clarín has outlined the post-referendum panorama from the government's vantage point: "Lacalle is seem as a man at the mercy of a compact if not homogeneous opposition, and this requires a degree of complicity to guarantee the governability of the country in a period of strong social conflict"
"Governability" has turned into the main preoccupation of those — including the reformist wing of FA - who want to avoid any change of government. In the same optic, the demand for new elections is of crucial importance for the radical forces if they want to make a leap forward along democratic and anti-imperialist lines.
• The Broad Left debates
The debate was opened inside the FA's National Plenum on December 26, 1992. Here the reformist bloc attempted to indicate a way forward that would head off social polarization.
The Secretary General of the Socialist Party was explicit: "The people have not questioned this government's legitimacy... the government should finish the term of office for which it was elected." The referendum result is said to have proven correct the "policy of alliances" -and perhaps also the formation of a "grand national agreement".
However the plenum did not go the way the reformists wanted. A motion calling for immediate elections proposed by the left, which enjoys the support of the bulk of the rank-and-file bodies was narrowly passed.
With the aim of building on the left's success, the Popular Participation Movement (MPP) issued a statement on December 22 containing proposals such as a new minimum wage, tax and rent reforms, a moratorium on foreign debt repayments and the use of the resources thus saved for healthcare, education and housing and a revision of the Mercosur agreement. *
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