Uruguay Presidential Campaign Programs Released

UNCLAS MONTEVIDEO 000572

DEPT FOR WHA/BSC MARY DASCHBACH

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV ECON UY
SUBJECT: Uruguay Presidential Campaign Programs Released

Summary
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1. After months of campaigning, in September, leading
Uruguayan presidential candidates Jose Mujica and Luis Alberto
Lacalle released their respective proposals for government.
As both documents make clear, the fight for votes continues to
be concentrated on the POLITICAL middle ground. Consequently,
there is a striking degree of overlap between the two
documents, although LacalleQs National (Blanco) Party document
is notable for setting its horizons beyond MERCOSUR while
MujicaQs ruling Frente Amplio (FA) proposal includes specific
targets for some aspects of economic and social development.
End Summary.

Two Documents, One Target
--------------

2. Weeks away from the October 25 national poll, analysts
continue to predict an exceptionally close election. With
the latest polls suggesting that the number of undecided
voters has risen to a record 12 percent, tension continues to
build in a race which, despite the polarized POLITICAL
profiles of the candidates, remains largely focused on
capturing voters in the center.


3. Both parties recently released extensive proposals for
government after months of campaigning. The Frente AmplioQs
QElectoral PlatformQ, published September 20, is structured
around the notion that the governmentQs initial five years has
been a success and that they would like to offer more of the
same. The document lists the governmentQs accomplishments in
the relevant area, then offers proposals to extend and deepen
these advances. Meanwhile, the BlancosQ QGovernment Program
2010-15Q, released August 27, faces the challenge of
presenting a distinct and credible program to set against a
popular administration. Over three times longer than the FA
document, the Blanco proposal arranges its conservative themes
of independence, justice and prosperity around more
traditional chapter headings such as economy, production and
social development. Both documents make bold but broad claims
for significant national investments, but the FA document
occasionally punctures the fuzziness of aspiration with
specific targets for training, housing and employment.

MERCOSUR and the Wider Region
--------------


4. Both parties argue for improvements in the regional
integration mechanism, Mercosur. The FA pushes for
consolidation and extension of the institution. In contrast,
while LacalleQs proposal acknowledges the importance of
regional trade and aims to deepen MERCOSUR as a trade body, it
is much more explicit in calling for commerce beyond the
bounds of the trading block, proposing, amongst other things,
to exploit commercial agreements with Mexico in order trade
with NAFTA. It emphatically rejects any POLITICAL role for
MERCOSUR and, furthermore, appears to set itself against the
recently created UNASUR (which the FA pledges to support),
declaring that a Lacalle government will actively oppose any
political organisms Qsuch as UNASURQ who Qwork against
regional unityQ and Qthreaten IndependenceQ.


Economic Policy
--------------

5. Both the FA and Blanco documents present variations of an
active, market-friendly economy with a social focus. MujicaQs
campaign, buoyed by the countryQs five years of economic
growth, stresses economic continuity with President VazquezQs
administration while pledging to deepen social support. The
FA program confidently projects an economic growth rate of 30
percent over the duration of their potential 2010-2015
administration. It also sets out a policy of national debt
reduction and an investment increase of 30 percent of GDP.
Tax-wise, a Mujica administration would look for ways to
ensure that Qthose who have more contribute moreQ, and
promises to knock two points off VAT. Tax breaks will also be
used to incentivize companies to train their staff.
Additionally, the FA document pledges the creation of 200,000
new jobs.


6. Despite the public objections to privatization plans
during LacalleQs 1990-95 administration, his pro-business
reputation and association with a time of relative prosperity
provide Lacalle with a firm footing from which to advocate
economic policy. However, he has been careful to declare that
he has pragmatically adjusted his polities to meet the
realities of Uruguay as it is today. The most obvious shifts
are seen in a higher profile for social programs, a focus on

Qde-monopolizationQ of state utilities rather than their
privatization, and the promise to uphold the current system of
tripartite wage negotiations between the government, business
leaders and unions. Note: Lacalle had an extremely fractious
relationship with the unions during his term in office. End
note. Macro-economically, the Blanco program sets no specific
targets but instead advocates growth though the maintenance of
stable prices and equilibrium in the balance of payments.
Arguably the most eye-catching element of the LacalleQs
proposals is the slow phasing out and eventual elimination of
the income tax established by MujicaQs running mate and ex-
finance minister Danilo Astori in 2007, which remains widely
reviled amongst the middle class.

Security
--------------


7. Public security, long a source of mounting concern amongst
Uruguayans, has flowered into a hot topic for the 2009
elections. In broad figures, crime has been on the rise since
the countryQs return to democracy in 1985, but, according to
Ministry of the Interior, the increase has been less
precipitous in recent years, with sexual assaults and thefts
actually declining since 2005. Nevertheless, in the mind of
much of the public, not only is the general trend up but it is
rising sharply. Having loudly identified security as the
Qprincipal problem currently facing the countryQ, LacalleQs
promise of a Qfirm handQ is clearly visible in his proposal
for government. The program offers a package of measures that
include reducing the age to be tried as a juvenile from 18 to
16; creating a National Juvenile Rehabilitation centre;
expanding the existing National Guard to create a National
Republican Guard with national jurisdiction; creating a
National Prisons Institute; improving rehabilitation
facilities in the prison system; increasing police wages;
improving police procedures and instituting a National
Rehabilitation Centre for drug addicts. The measures also
include transferring 200 positions connected to public
security from the Ministry of Defense to the Ministry of the
Interior.


8. Meanwhile, Mujica has had the difficult task of balancing
the FA security record with the need to reassure the
electorate that the FA is aware that more could be done.
MujicaQs initial engagement with the theme was bullish,
declaring that tourists are drawn to Uruguay because the
streets are safe and that the Blanco PartyQs comments to the
contrary were an act of QsabotageQ. Nevertheless, following a
poll that found that just under half the electorate felt the
government had done nothing to address public security, the FA
conceded that improvements had been QmodestQ and went on to
present a range of compensatory measures as part their
Electoral Platform. These include: doubling the public
security budget; increasing the numbers of police officers;
improving police training; community participation in citizen
security round tables; deploying the National Guard to combat
serious crime; and developing a national policy on social
violence. Causal factors are addressed with the promise that,
of the 200,000 new jobs to be created, 40,000 will be for
young adults between the ages of 18 and 29. The FA also vows
to continue the struggle against drugs.

Social Support and Development
--------------


9. On July 28, Enrique Rubio the director of the Office of
Budget and Planning (OPP) announced that some 400,000
Uruguayans had been lifted out of poverty between 2005 and
2008, an achievement he attributed to the FAQs tax reforms and
family government benefits. These seemingly impressive
statistics combined with the high profile success story of the
governmentQs QPlan CeibalQ (in which every school-age child
was presented with a laptop) have strengthened the FAQs image
as a socially conscious party and make gaining ground in this
area a challenge for Lacalle. An early Lacalle promise to
Qtake a buzzsawQ to public spending did little to aid his new
socially conscious image, but the Blanco campaign declares
that a credible program of social support plays a key role in
their electoral chances.


10. The National Party document promises focused social
support for families, women, the poor, adults, children and
adolescents, some of which appears to consist of updating or
adjusting current programs. The most notable different is
LacalleQs proposal to require the planQs beneficiaries to
participate in public works in exchange for state support.
Otherwise, the aspirations of both sets of proposals are more
or less the same. Both parties aim to reduce poverty: the
BlancosQ announced a goal of Qzero povertyQ while the FA set a

slightly more modest target of ending poverty for 350,000
people. As part of this drive, both parties focus on housing.
Mujica had already stated that his government would begin the
construction of homes in at least 15 locations within the
first 15 days of his presidency. His proposal for government
expands on this with the more ample promise of 70,000-80,000
homes for young families. The Blancos pledge to replace poor
quality or unhealthy housing with pre-fabricated homes, but,
in contrast to the FA, plan to redirect funds to providing
affordable credit rather than direct construction. Both
campaigns offer to improve health care, with Mujica aiming to
ensure a universal standard of provision and Lacalle proposing
the creation of National Institute for Trauma and
Rehabilitation as well as the construction of two new
hospitals, one of which would be located in the relatively
impoverished El Cerro district of the city.


11. Both programs make broad assertions about the need to
improve the quality of basic education and extend support for
the countryQs youth in particular by creating full-time
schools. The FA program promises 10,000 courses and some
25,000 education grants)while the Blanco proposals include
promises to help find work for those who abandon formal
education, providing incentives to companies offering
employment for the young and start a program to support
teenage mothers. LacalleQs government plan places a clear
emphasis on training and commerce centered on information
technology and proposes the establishment of a polytechnic
system to support this aim. He also promises to build 300,000
schools.

Comment
--------------

12. Because the differences in the two programs are fairly
subtle in many cases, the electorate appears to be judging the
candidates on their values and personal qualities. The voters
continue to try to sort out who will best be suited to meet
these challenges. End comment.