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Uruguay Batllism
The government's protectionist policies--in the form of
tariffs on imported manufactured goods, first imposed
during the
late 1800s--encouraged these light industries. However, it
was
Uruguay's most significant political figure, José Batlle y
Ordóñez (1903-07, 1911-15), who devised an overarching
government
strategy that took into account the growing urban
population and
set the tone for the nation's economic development for
much of
the 1900s.
Two aspects of Batlle y Ordóñez's sophisticated
political
program were most relevant for the long-term development
of the
economy. First, the social components of Batllism raised
the
standing of the average laborer. The government enacted
legislation that was unprecedented in Latin America: a
minimum
wage, a day of rest after six workdays, workmen's
compensation,
and old-age pensions. Second, and more significant over
the long
term, however, were Batlle y Ordóñez's efforts to give the
state
a multifaceted role in the economy. The state was to
regulate the
economy, perform key activities, protect laborers from
unfair
working conditions, and minimize the influence that
foreign-owned
companies would have in Uruguay
(see
Batlle y Ordóñez and the Modern State, ch. 1).
Under Batlle y Ordóñez's leadership, the state created
or
nationalized a wide range of service enterprises,
officially
known as autonomous entities
(
autonomous agencies or state
enterprises; see Glossary), including an insurance
company,
public utilities, and mortgage banks. Later, the
government
became deeply involved in the production of goods,
operating over
twenty state enterprises, including the giant National
Administration of Fuels, Alcohol, and Portland Cement
(Administración Nacional de Combustibles, Alcohol, y
Portland--
ANCAP). By 1931 these state enterprises employed 9 percent
of the
nation's work force, including 16 percent of the workers
in
Montevideo.
Uruguay's novel economic policies bore fruit. Incomes
rose on
the strength of impressive export earnings. The value of
exports
doubled between 1900 and the onset of World War I, when
beef
exports, for example, reached 130,000 tons per year.
Between 1926
and 1930, beef shipments continued to increase at a rapid
rate,
averaging 206,000 tons per year, a record that has not
been
equaled since then. During the same period, the Batlle y
Ordóñez
initiatives improved the lot of the worker, helped create
a large
middle class, and added to the productive capacity of the
economy. The fact that all three developments--increased
export
earnings, improved conditions for labor, and successful
state
enterprises--occurred simultaneously helped Uruguayans to
associate state intervention with prosperity.
The success of the export model, because of rising
world
demand and prices, was seen as the success of Batllism.
However,
as many observers have pointed out, the restructuring of
the
economy that occurred under Batlle y Ordóñez and his
successors
did not extend to the roots of that economy, the livestock
sector. Because his political base did not reach beyond
Montevideo into the countryside, and because he believed
that
market forces and property taxes would lead livestock
producers
to become more efficient, Batlle y Ordóñez essentially
left the
rural sector to its own devices. In doing so, he limited
the
extent to which his own bold reforms could transform the
economy.
Data as of December 1990
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