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Uruguay ECONOMIC CRISIS AND DECLINE
The Blanco Administrations, 1959-67
From March 1959 to February 1967, eight National Party
governments ruled Uruguay. The death of Herrera (1959)
aggravated
divisions in the National Party and demonstrated the
fragility of
the electoral accords that had led to its victory. The
economic
crisis and social unrest that had beset Uruguay from the
mid1950s continued, and the 1960s opened with gloom and
sadness for
the country. At the time of the 1962 elections, inflation
was
running at a historically high 35 percent. The Colorado
Party was
defeated once again, although by a much smaller margin of
votes
(24,000 as compared with 120,000 in 1958). The National
Party
split. The UBD joined a splinter faction of Herrerism, the
Orthodox faction, led by Eduardo Víctor Haedo. Another
faction of
Herrerism, led by Martín R. Echegoyen (1959-60), kept its
alliance with Nardone's Ruralists. At the same time,
divisions
between the List 14 faction and Unity and Reform were
intensified
in the Colorado Party.
Important changes also took place in the minor parties.
Catholics formed the Christian Democratic Party (Partido
Demócrata Cristiano--PDC). Communists formed a coalition
with
other minor parties, the Leftist Liberty Front (Frente
Izquierda
de Liberdad--Fidel). The PSU joined with intellectuals and
dissidents from traditional parties and formed the Popular
Union
(Unión Popular).
The thin majority of the governing party, as well as
its
internal divisions, hindered the administration of the
National
Council of Government during the 1963-67 period. In 1964
the
political scene was further affected by the death of two
important leaders: Batlle Berres and Nardone. That same
year, the
workers movement formed a single centralized union, the
National
Convention of Workers (Convención Nacional de
Trabajadores--CNT).
In addition, a new political protagonist appeared. In 1962
Raúl
Antonaccio Sendic, head of the sugarcane workers from the
north
of the country, formed, together with other leftist
leaders, the
National Liberation Movement-Tupamaros (Movimiento de
Liberación
Nacional-Tupamaros--MLN-T), a clandestine urban guerrilla
movement.
Economically, the 1958 Blanco victory brought ranching
and
agricultural forces to power. This led to the
implementation of
liberal (free-market) economic policies aimed at
eliminating the
protectionist-interventionist model that had fostered
industrial
development. In 1960 Uruguay agreed to sign its first
letter of
intent with the IMF. The Blanco government devalued the
currency
and established a single, free monetary exchange market
(while
maintaining the interventionist role of BROU), as well as
the
free import and export of goods and services. The
reorientation
of economic policy tended to favor the agro-exporting
sector.
However, the model could not be applied fully, nor in an
orthodox
manner. Inflation increased to more than 50 percent per
year
between 1963 and 1967, and in 1965 an overstretched
financial
system and massive speculation produced a banking crisis.
Labor
and social conflict increased as well, and a state of
siege was
imposed in 1965.
To try to solve the problem of economic stagnation, the
government complied with one of the principal
recommendations of
the Alliance for Progress (a United States program to help
develop and modernize Latin American states) by preparing
a tenyear development plan. However, virtually none of the
plan's
recommendations were ever put into practice.
During the Blanco era, sectors from both traditional
parties
had begun blaming the country's difficulties on the
collegial
constitutional arrangement of executive power. In the 1966
elections, three constitutional amendments were submitted.
The
approved changes, supported by Blancos and Colorados, were
incorporated in the 1967 constitution, which put an end to
the
collegial executive, thereby returning the country to a
presidential regime; granted increased powers to the
executive;
and extended the presidential term to five years. They
also
eliminated the three-and-two (coparticipation) system for
appointing heads of autonomous entities and ministries and
created new state agencies to modernize government: the
Office of
Planning and Budget; the Social Welfare Bank; and the
Central
Bank of Uruguay. High school education became compulsory.
Data as of December 1990
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