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A talk with Uruguay's president
The Miami Herald / July 20, 1998

By Larry Luxner

Julio Maria Sanguinetti, a former journalist, lawyer and historian who led his country as head of the Colorado Party from 1985 to 1990, returned to the presidency in 1995 -- becoming the first president in Uruguayan history to be re-elected, both times by direct popular vote.

The U.S. Embassy in Montevideo says in its latest Uruguay economic trends report that "during Sanguinetti's second administration, Uruguay has made significant, albeit gradual, progress in opening up its economy to private investment while maintaining social stability." Indeed, Sanguinetti has had the good fortune of presiding over an economy that expanded by 5% last year and will likely grow another 4% in 1998.

On July 23, Sanguinetti will meet with President Clinton in Washington, during which time the two leaders will discuss the Mercosur trade bloc and creation of a Free Trade Area of the Americas. Accompanying Sanguinetti will be Foreign Minister Didiet Opertti and Economy Minister Luis Mosca.

The 62-year-old president spoke to Larry Luxner, editor of South America Report newsletter and a frequent contributor to The Herald. Here are excerpts from that interview:

Q: Mr. President, how would you characterize your country's ties with Washington?

A: "Relations between Uruguay and the United States have always been good. They've never swung from left to right like a pendulum, as has been the case with other countries, and we've never had differences in our objectives. We believe in the same values: free-market economies and strong bilateral cooperation."

Q: Some of your political adversaries say your administration is moving too slowly on privatization and other economic initiatives, while others oppose privatization of any kind. Are you satisfied with the pace of Uruguay's economic reforms?

A: "It's been a gradual process, not dramatic like in Mexico or Argentina. In Uruguay, the situation was different, and in any case, this process has had its peculiar characteristics. In some cases, we've gone into joint ventures with other companies, for example [the Brazilian airline] Varig, and in others, we've given concessions to private companies, for example, cellular telephony. We have a state port system, but we've established private concessions in services. The largest privatization of all has occurred in the pension system.

"Some sectors won't be privatized at all. A [December 1992] plebiscite determined that Antel, the phone company, wouldn't be sold off. People voted that way because the service was good -- and cheaper than Argentina or Brazil."

Q: How do you feel about construction of the proposed $1 billion bridge linking Buenos Aires to Colonia, Uruguay?

A: "I'm 100% in favor of it. We hope it'll be approved by the Senate in October."

Q: How has the rise of the Southern Common Market (known as Mercosur) helped improve the Uruguayan economy?

A: "Mercosur came about much more rapidly than we expected. It has generated a great amount of work in the region. But our differences with our neighbors began long before Mercosur. Argentina and Brazil had very closed markets, and were under much more pressure to change than was Uruguay. Since the 1970s we've been bringing down tariffs, so for us, the change was not so brutal. In the past seven years, exports of Uruguayan products have increased 84%, and to other Mercosur countries, 100%."

Q: Could your country's special status within Mercosur eventually transform Montevideo into the Brussels of South America?

A: "Yes. In 10 years, Uruguay will be located in a dynamic region between Buenos Aires and Sao Paulo. Uruguay will be the great administrative center of that region."

Q: Your term expires in two years. What has been your biggest challenge as president of Uruguay?

A: "To succeed with integration while preserving Uruguay's classic social equilibrium. Uruguay has the fairest income distribution in Latin America. Our great challenge is to maintain this reformed welfare state while integrating economically with our bigger neighbors."

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