Uruguay - a happy country?

A Happy Country

We think Uruguay is getting plenty of things right

"On bad mornings," Nobel-laureate and newspaper columnist Paul Krugman remarked recently, "I wake up and think we are turning into a Latin American country".

Dr Kruger was talking about inequality and social mobility, but it's our guess that Uruguay wasn't at the top of his mind when he appeared on an American talkshow and made that – now much reported – comment.

Uruguay certainly shares a history of unequal income distribution with other Latin American countries. According to the World Bank, the richest one-tenth of the population in Latin America and the Caribbean (LAC) earn 48 percent of total income, while the poorest one-tenth earn only 1.6 percent. Inequality in the least unequal LAC country – Uruguay – is higher than that of the most unequal country in Eastern Europe and the industrialized countries, the Bank found.

But can the case be made that structural problems are being met with practical solutions? According to research from the University of Montevideo, the Uruguayan government increased the minimum wage by 56% in real terms over the period 1998 – 2007. Since the presidential elections that brought the left-leaning Frente Amplio party to power in 2004 (for the first time in Uruguay's history) the tax code has been reformed, a comprehensive system of cash payments to poor families has been rolled out, and every child in state education has the right to a laptop.

Uruguay was the first country in the world to implement a "one laptop per child" scheme, which according to the BBC cost US$260 per pupil. Thanks to the initiative, many children – particularly those in rural areas – gained access to computers and the internet for the first time.

None of this has prevented the appearance of high fences and electric gates in middle-class districts of Montevideo. Rubbish collectors riding horses and carts still rummage through the city's dustbins while BMWs and SUVs speed by. Montevideo's northern suburbs contain shanty towns with inadequate facilities. Uruguay has received a hugely favourable international press in recent years (your correspondent was responsible for some of it) but anyone flying south with the intention of putting down roots should be aware that though the country may offer heavenly beaches, life remains a struggle for many folk.

Perhaps a little surprisingly, Uruguay introduced a very early version of a progressive, modern state at the start of the twentieth century. Surprisingly, because this followed hard on the heels of a period of bloody civil war between the supporters (and their foreign allies) of Uruguay's two "traditional" political parties: the Colorados and the Blancos. Known as the Guerra Grande, this was essentially a long and hugely destructive squabble between the country's leading families (think the English Wars of the Roses rather that the American Civil War). It left the country looking for a new direction. This was provided by Colorado president José Batlle y Ordóńez, who took advantage of the country's growing prosperity to institute major reforms: he ushered in an 8-hour working day and other labour rights, women were now able to initiate divorce proceedings, the influence of the Roman Catholic Church was reduced, and the death penalty was abolished.

UruguayNow is optimistic about today's Uruguay because – at the risk of gross generalization – the country displays an inherent sense of reasonableness and a respect for the rule of law. The new tax code is far from perfect and the state payroll is still bloated, but this is a good country to do business in – so good that the economy grew by 2.5% in 2009 while the world was mired in recession. The previous year Uruguay managed to export more meat than mighty Argentina (thanks, it must be said, to its neighbour's idiosyncratic economic policy). The country would do even better if more Uruguayans could be encouraged to set up their own businesses.

Meanwhile violent crime, though less rare than in the past, is still relatively uncommon. No metal detectors stand at the entrance of secondary schools. Private cars are not kitted out with bullet-proof windows.

According to a recent Latinobarómetro survey, Uruguayans are much more likely than any other Latin Americans to be satisfied, or very satisfied, with the way that democracy works in their country. They are more likely than any other Latin Americans to support parliamentary democracy and political parties. And when asked the question: “Do you consider your country is governed for the benefit of a few powerful cliques, or the benefit of everyone?" Uruguayans were those most likely to reply “for the benefit of everyone" (58% of the total versus 7% of Argentines polled when asked the same question). A return to the military dictatorship of 1973–1985 seems out of the question.

Graft is not a significant problem: According to the pressure group Transparency International, Uruguay and Chile currently vie for the title of the least corrupt state in Latin America, and are rated on a par with France. Traffic police won’t demand money from you for imagined infringements. And although there is some evidence that the bronca (sharp temper) said to be characteristic of nearby Buenos Aires is gaining ground on these shores, British novelist Martin Amis told local paper El Pais that the Uruguayans are "the most charming and civilized" people he'd ever met.

We’ll give the last word to a group of academics from the University of Texas at Austin. They looked into the likelihood that a policeman would be convicted for killing a fellow citizen. The result was not just that Uruguay consistently outperformed its neighbours (there was a 50% chance of conviction in Uruguay, compared to 20% in Buenos Aires and just 5% in Brazil) but that the Uruguayan criminal justice system “responds equally well, if not better, to the claims of the underprivileged as it does to the claims of those with more resources".

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