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Uruguay THE NEW COUNTRY, 1903-33
http://www.photius.com/countries/uruguay/economy/uruguay_economy_the_new_country_190~1683.html
Sources: The Library of Congress Country Studies; CIA World Factbook
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    Contrasting buildings in Montevideo's Old City
    Courtesy Edmundo Fores

    Batlle y Ordóñez and the Modern State

    The election of José Batlle y Ordóñez as the first Uruguayan president in the twentieth century (1903-07, 1911-15) marked the beginning of a period of extraordinary change in the country. The son of former President Lorenzo Batlle y Grau, Batlle y Ordóñez was a member of the Colorado Party, founder of the newspaper El Día (in 1886), and an active opponent of militarism.

    The dominant political event during the first administration of Batlle y Ordóñez was another National Party insurrection in 1904, led by Saravia. After nine months of fierce fighting and Saravia's death, it ended with the Treaty of Aceguá (1904). The civil war triumph of Batlle y Ordóñez and the Colorados meant the end of the coparticipation politics that began in 1872, the political and administrative unification of the country, the consolidation of the state, and, most profoundly, the end of the cycle of civil wars that had persisted throughout the nineteenth century.

    The period's most significant economic change occurred in meat processing. In 1905 the first shipment of frozen beef, produced by a refrigeration plant (frigorífico) established by local investors two years before, was exported to London in a refrigerated ship. Uruguay now entered the age of refrigeration, making possible the diversification of one of its main export items and giving the country access to new markets. With the inauguration of the modernized port of Montevideo in 1909, Uruguay could compete with Buenos Aires as a regional trade center.

    Claudio Williman (1907-11), the president's handpicked candidate, succeeded Batlle y Ordóñez, who sailed for Europe, where he spent the next four years studying governmental systems. In some respects, Williman's administration was considered more conservative than that of Batlle y Ordóñez, although Batllists maintained their political influence. Williman tried to ensure political peace by enacting electoral laws in 1907 and 1910 that increased political representation of minority opposition parties. Williman also ensured peace with Uruguay's northern neighbor by signing a border treaty with Brazil, thereby putting an end to pending litigation and disputes dating back half a century.

    The National Party, disappointed with Williman's electoral laws and with the announcement that Batlle y Ordóñez would once again run for president, did not participate in the elections held in 1910. This helped foster the emergence of two new political parties: the Catholic-oriented Civic Union of Uruguay (Unión Cívica del Uruguay--UCU) and the Marxist-inspired Socialist Party of Uruguay (Partido Socialista del Uruguay--PSU). Church and state relations also underwent changes. The government passed a divorce law in 1907, and in 1909 it eliminated religious education in public schools.

    In 1911 Batlle y Ordóñez was reelected to the presidency. A non-Marxist social democrat, he set about modernizing the country, taking into account the aspirations of emerging social groups, including industrialists, workers, and the middle class. Writing and promoting progressive social legislation, Batlle y Ordóñez fought for the eight-hour workday (enacted in 1915 under the administration of his successor), unemployment compensation (1914), and numerous pieces of social legislation. Some of these would be approved years later, such as retirement pensions (1919) and occupational safety (1920) (see Batllism , ch. 3).

    Batlle y Ordóñez firmly believed that the principal public services had to be in the hands of the state to avoid foreign remittances that weakened the balance of payments and to facilitate domestic capital accumulation. In a relatively short period of time, his administration established a significant number of autonomous entities. In 1911 it nationalized BROU, a savings and loan institution that monopolized the printing of money. In 1912 the government created the State Electric Power Company, monopolizing electric power generation and distribution in the country; it nationalized the Mortgage Bank of Uruguay; and it founded three industrial institutes for geology and drilling (coal and hydrocarbon explorations), industrial chemistry, and fisheries. In 1914 it purchased the North Tramway and Railway Company, later to become the State Railways Administration.

    Attempts to change the agrarian productive structure were not as successful. Influenced by United States economist Henry George, Batlle y Ordóñez thought that he could combat extensive landholdings by applying a progressive tax on land use and a surcharge on inheritance taxes. The agrarian reform plan also contemplated promoting colonization and farming. Very little was accomplished in this regard, however, partly because of the opposition of large landowners who created a pressure group, the Rural Federation (Federación Rural), to fight Batlle y Ordóñez's policies. The government did make one important accomplishment with regard to agriculture, namely, the creation of a series of government institutes dedicated to technological research and development in the fields of livestock raising, dairying, horticulture, forestation, seeds, and fodder.

    The government adopted a protectionist policy for industry, imposing tariffs on foreign products, favoring machinery and raw materials imports, and granting exclusive licensing privileges to those who started a new industry. Indigenous companies sprang up, but foreign capital--especially from the United States and Britain--also took advantage of the legislation and came to control the meat industry. The growth of the frigorífico meat-processing industry also stimulated the interbreeding of livestock, Uruguay's main source of wealth.

    Education policy was designed to take into account the continuous inflow of European migrants. Although it fluctuated, immigration was significant until 1930. Furthermore, education was a key to mobility for the middle classes. The state actively sought to expand education to the greatest number of people by approving free high school education in 1916 and creating departmental high schools throughout the country in 1912. A "feminine section" was created to foster mass attendance of women at the University of the Republic, where the number of departments continued to expand.

    The secularization process, initiated during the second half of the nineteenth century, was accelerated by Batlle y Ordóñez's anticlericalism. Uruguay banned crucifixes in state hospitals by 1906 and eliminated references to God and the Gospel in public oaths in 1907. Divorce laws caused a confrontation between church and state. In addition to the 1907 and 1910 laws (divorce with cause and by mutual agreement), a law was passed in 1912 allowing women to file for divorce without a specific cause, simply because they wanted to.

    Batlle y Ordóñez also proposed the institutional reorganization of government in 1913. Essentially, he wanted to replace the presidency with a nine-member collegial executive (colegiado) inspired by the Swiss model (see Constitutional Background , ch. 4). This proposal caused an immediate split in the Colorado Party. One sector opposed the political reform and also feared some of Batlle y Ordóñez's economic and social changes. Subsequently, these dissidents, led by Carlos Manini Ríos, founded a faction known as the Colorado Party-General Rivera (Riverism). The National Party, under Luis Alberto de Herrera, the leading opposition figure from 1920 to his death in 1959, did not back Batlle y Ordóñez's proposal either.

    Feliciano Viera (1915-19), a Colorado who was more conservative than Batlle y Ordóñez, became president at the time of the debate between "collegialists" and "anticollegialists." During his mandate, elections were held for a constituent assembly (July 30, 1916). The rules for this election enabled the National Party to ensure incorporation of many of the principles it advocated, such as the secret ballot, partial proportional representation, and universal male suffrage.

    Batlle y Ordóñez and his political faction of the Colorados lost these first popular elections, but the Colorados continued to be the majority party, and the 1917 constitution, the country's second, reflected many of the changes that had taken place under Batlle y Ordóñez. It separated church and state, expanded citizens' rights, established the secret ballot and proportional representation, and banned the death penalty. It also created autonomous state enterprises in the areas of industry, education, and health. But in a bitter compromise for Batlle y Ordóñez, the executive was divided between the president, who appointed the ministers of foreign affairs, war, and interior, and the nine-member colegiado, the National Council of Administration (Consejo Nacional de Administración). The latter, which included representatives from the party that received the second highest number of votes, the Blancos, was placed in charge of the ministries dealing with economic, educational, and social policy.

    President Viera, like many of Batlle y Ordóñez's followers, interpreted the 1916 electoral defeat as a direct consequence of previous policy. He thus announced a halt to economic and social reforms. Some of the old projects as well as some new proposals were approved, however, such as restrictions on night work in 1918 and the creation in 1916 of a new autonomous entity, the Montevideo Port Authority, as known as the National Administration of Ports (Administración Nacional de Puertos-- ANP). Workers' strikes, however, were repressed severely. Finally, in 1919 Viera, in disagreement with Batlle y Ordóñez, founded a dissident Colorado Party faction known as Vierism.

    Data as of December 1990


    NOTE: The information regarding Uruguay on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of Uruguay THE NEW COUNTRY, 1903-33 information contained here. All suggestions for corrections of any errors about Uruguay THE NEW COUNTRY, 1903-33 should be addressed to the Library of Congress and the CIA.

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