Last week, Uruguay’s central bank reported that the country’s economy grew by 7.7 percent in the second quarter of this year, compared to the same period last year. The news confirmed that the South American country has returned to its spectacular pattern of 17 consecutive years of economic growth, after a brief interruption caused by the coronavirus pandemic.
As in much of the world, Uruguay’s growth is likely to slow amid efforts to tame inflation. But the small Southern Cone country, tucked away on the Atlantic coast and wedged between neighboring giants Brazil and Argentina, remains a remarkable success story in areas that go way beyond the economy.
We don’t hear much about Uruguay. It stays out of the headlines precisely because just about everything is going so well.
At a time when Latin America, and many other regions, are struggling with populism, government dysfunction and social polarization, Uruguay is not just functioning well, it is a welcome reminder that democracy can work.
It’s hardly Nirvana, of course. The country faces many of the same economic challenges afflicting the globe. But as the credit ratings agency Fitch put it, Uruguay remains “resilient in the face of headwinds.”
Uruguay’s success in achieving economic growth and political stability merits more than plaudits. It should be studied and, where possible, replicated.
Thanks to its secret sauce—more on that in a moment—Uruguay has succeeded in virtually eliminating extreme poverty, producing the highest per capita income and the lowest inequality in South America.
But it’s not just the economy.
Uruguay has the longest, most stable democracy in Latin America, one that traces its origins to the early 19th century. It was ruled by a military dictatorship from 1973 to 1985, but returned to a democratic model immediately after.
In the early years of the 20th century, the country built a multiparty consensus and enacted institutional measures to protect democracy, defend workers rights and raise living standards. That model now functions so well and delivers so successfully for the country’s population, that polls consistently show strong satisfaction with presidents of all political persuasions.
The current president, right-of-center Luis Lacalle, has the highest approval rating in Latin America, at 74 percent, according to a recent Ipsos poll. That’s impressive, but it’s lower than his predecessor’s, Tavare Vazquez, the left-of-center president who left office with a record 80 percent approval.
They’re not perfect, but the Uruguayan government, state and institutions function so well that during the worst of the pandemic they won praise from the world’s top scientists for their handling of one of the most complicated challenges of recent times. In August 2021, within a few months of the arrival of vaccines, 70 percent of the population had received two doses, nearly triple Brazil’s level. The overall response was impressive.
Most remarkable is the country’s political stability. In a region where democracy is faltering dangerously, Uruguay’s is a beacon of stability. The watch group Freedom House ranked it “Free” with a score of 97. Only five countries in the entire world scored higher: Norway, Finland, Sweden, New Zealand and Canada.
Not surprisingly, Uruguay is also a standout in resisting corruption. In a region where graft is the crippling infection of poor governance, Uruguay’s performance rivals the world’s most respected, least corrupt countries.
Last year, Transparency International called Latin America “a region in crisis,” pointing to “serious attacks on freedoms of speech, the press and association,” all indispensable to a healthy democracy. By contrast, Uruguay showed, “strong and stable democratic institutions, an independent judiciary and the protection of basic rights.” It was not only No. 1 in Latin America for the eighth consecutive year, but actually improved its score.
In Transparency’s most recent Corruptions Perceptions Index, it ranked 18th, tied with Australia, Japan and Belgium, just below Japan, and better than many European countries. The U.S., incidentally, ranked 27th.
This level of success merits more than plaudits. It should be studied and, where possible, replicated.
Some of the sources of Uruguay’s good fortune cannot be copied. Its history, geography, demographics and natural resources are unique in the region, and they combined, sometimes in a paradoxical way, to help bring the country where it is today.
Unlike its neighbors, Uruguay has no massive deposits of minable mineral or energy wealth. Ironically, it has benefitted from a reverse resource curse, avoiding the dynamics that distort the economies and political environment of resource-rich countries. In countries with abundant extractable wealth, the large quantities of cash that flow to government coffers often breed corruption and repression, while the availability of easy money discourages entrepreneurship, drives up the currency and makes other exports less competitive.
By contrast, Uruguay’s economy is diversified between agriculture, manufacturing, tourism and other services.
Another aspect of Uruguay’s makeup that cannot be replicated is its social composition. The country has very little ethnic diversity, with the overwhelming majority of the population—close to 90 percent—descendants of white European settlers. That has minimized the racism and subsequent ethnic tensions that add to social and political divisions.
But its political structure, which can be reproduced, may be a more important factor. The constitution limits the president’s powers and all but forces him to cooperate with opposition parties. Presidents are not allowed to seek consecutive reelection, and cooperation, negotiation and compromise with Congress are all but routine.
One notable social difference between Uruguay and its neighbors is the lack of power exercised by the Catholic Church. From the days of the Spanish conquest, the church had trouble making inroads. Over the years, Uruguay became one of the most secular countries on Earth, certainly the least religious in overwhelmingly Catholic Latin America.
While the Catholic Church played a major role in other places, sometimes glorifying poverty and excusing inequality, it never gained influence in Uruguay, which emerged as a bastion of liberalism in a deeply conservative region. Divorce was legalized more than a century ago, and Uruguay became the first country in the world to legalize recreational marijuana back in 2014, making headlines around the world long before the policy became commonplace.
At the same time, Uruguayan leaders of all stripes appear to be firmly committed to a pro-business economic model, one that engenders less controversy for operating in a society where, unlike many of its neighbors, misery is not an ever-present reality.
The result has been a strong democracy that delivers for its people. In a time of growing political polarization and authoritarianism, it’s a good reminder that democracy can work.
Frida Ghitis is a world affairs columnist and a regular contributor to CNN and The Washington Post. Her WPR column appears every Thursday. You can follow her on Twitter at @fridaghitis.