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Basic Capabilities Index (BCI) 2010 gender equity Index (geI) 2009
National reports 178 Social Watch
Empowerment
EducationEconomic activity
Survival up to 5 Births attended by skilled health personnel
Children reaching 5th grade
UrUGUAY
Social policies need fine tuning
Like other countries in Latin America, Uruguay was in a relatively good situation when the financial crisis of 2008 struck. The country’s economy continued to grow and its poverty and indigence rates improved considerably thanks to social policies, which in the more prosperous years had been given priority over macroeconomic objectives. Nevertheless, there are still problems to be tackled, such as high poverty and indigence rates among people of African descent and the fact that more and more heads of households at the very poorest level are women. To remedy these situations, combating inequities of gender and/or race should be an integral part of economic policy.
Centro Interdisciplinarios de estudios sobre el desarrollo – Uruguay (CIedUr)Alma espino
If might seem obvious but perhaps the main ques-tions for economic policies ought to be: What is the aim of economic activity? Where do social and gender inequalities fit into the current growth model and pattern of consumption? If the purpose of the economy is to provide and maintain a decent level of life we are talking about the economy being at the service of the people, that development should be centred on people. It is very clear that the market is not capable of recognising or valuing the commu-nity’s great diversity of needs and interests or bridg-ing the gaps that are appearing in various aspects of society and life.1
Macroeconomic policies should be suitably integrated into social and economic politicies, they should be part of a wider development strategy and thus make a direct contribution to long term growth. Macroeconomics has social content, so this is a question of laying foundations that are solid from the point of view of human development, justice and equity.2 Therefore the decision-makers in economic policy should consider the social and gender implica-tions of their macro policies. This means not leaving subjects like gender and/or race inequality exclusive-ly in the field of social policies where the assistance effort amounts to just alleviating or compensating for the negative effects of economic policies.
The region and the crisisThere is a general feeling that Latin America was in bet-ter condition to cope with the 2008 crisis than in other periods of the recent past. And overall this is true, but while these countries are quite similar in many ways they all have their own individual characteristics, so
1 Alma Espino, Report of the Doha conference about finance for development and conclusions of the meeting about the world crisis convoked by the President of the General Assembly (26-29 May 2009). Presentation at the seminar to Analysis of the economic and financial crisis from the gender perspective: impact on women’s poverty and work. UNIFEM-CEPAL-INSTRAW-SER-Instituto de las mujeres. Mexico, July 2009.
2 José Antonio Ocampo and Rob Vos, “Policy space and the changing paradigm in conducting macroeconomic policies in developing countries” in New financing trends in Latin America: a bumpy road towards stability. BIS Papers, 36. February 2008.
there are big differences in the ways the crisis has af-fected them and what the impacts have been. In fact, like other economies in the region, Uruguay has been growing and its social indicators have improved.
Prior to 2008 the Uruguayan economy was on a growth path and this was reflected in the fact that the country’s GDP increased by 8.9% in that year. This growth was based on expanding domestic demand (consumption and investment) and foreign demand for exports. But when the international economic and financial crisis struck at the end of 2008 signs of a slowdown began to appear. In spite of this, growth continued and in 2009 GDP increased by 2.9%. Ac-cording to the Institute of Economics, from 2005 to 2009 the country enjoyed an average annual ac-cumulated growth rate of 6.1%.
The way the crisis exerted its effect on the econ-omies in the region was through falling external de-mand, which was expressed as a decrease in imports from the developed countries and tourism, a fall in prices for commodities, reduced remittances from Uruguayans living abroad and a reversion in foreign investment flows. The fall in international prices for Uruguay’s main export products had a severe im-pact, and although the country managed to diversify and find new clients for its exports the reduction in demand had a negative effect on that sector.
Weaknesses and strengthsIn the last two months of 2008, the export growth trend was reversed and imports were rising more than exports, although these too slowed down to-wards the end of that year. This made for a current account deficit of 3.5% of GDP in 2008, which was mainly due to the big trade deficit.3 In 2009, exports
3 Instituto de Economía (Institute of Economics), 2009.
measured in dollars shrank by 8% even though in terms of physical volume they increased. In any case, the export situation was the factor that had the big-gest impact on growth, but private investment was pulling in the opposite direction and the public sector remained stable. Income from tourism had been falling for several years but in 2008 it increased; and in 2009 foreign currency from this source came to USD 1,300 million, 19% more than the previous year when the sector yielded USD 1,053 million.4
Foreign indebtedness continued to come down; in 2008 it amounted to 37.3% gross and 14.1% net of GDP. This was a consequence of the country’s con-tinued accumulation of reserves, which increased by USD 2,208 million in that year.5
In 2009, the overall behaviour of the labour market was basically positive. Jobs were generated and the unemployment rate went down while the number of people who were economically active remained about the same as the previous year. These results show that in 2008 and 2009 the international crisis did not have a direct impact on the Uruguayan labour market as a whole. However, a somewhat more detailed analysis shows that some sectors of economic activity – like those most dependent on foreign markets – did find it difficult to keep their workers employed around the end of 2008 and the beginning of 2009. This can be seen in the fact that, towards the end of 2008, the number of workers in industry fell and the number of people signing on for unemployment benefit at the social security organi-zation (the Banco de Previsión Social) increased.6
4 Instituto de Economía, 2010.
5 Instituto de Economía, 2009.
6 Instituto de Seguridad Social (Institute of Social Security).
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BCI of Afghanistan = 0 INGLES BCI of Afghanistan = 0
BCI of Argentina = 98 BCI of Armenia = 94 BCI of Bangladesh = 61 BCI of Benin = 85 BCI of Bolivia = 83 BCI of Bulgaria = 98BCI of Brazil = 96 BCI of Cameroon = 75
BCI of Central African Republic = 65 BCI of Chile = 98 BCI of Colombia = 94 BCI of Croatia = 98 BCI of Czech Republic = 98 BCI of Egypt, Arab Rep. = 91
BCI of Finland = 99 BCI of Germany = 99 BCI of Ghana = 77 BCI of Hungary = 98 BCI of India = 73 BCI of Indonesia = 90 BCI of Kenya = 71
BCI of Mexico = 96 BCI of Nigeria = 61 BCI of Paraguay = 89 BCI of Poland = 99BCI of Malta = 97 BCI of Peru = 88
BCI of Senegal = 71BCI of Slovenia = 98
BCI of spain = 99
BCI of Suriname = 91BCI of Switzerland = 98
BCI of Tanzania = 75
BCI of Uganda = 69 BCI of Uruguay = 98
BCI of Yemen, Rep. = 67 BCI of Zambia = 75IEG of Yemen = 67
IEG of Senegal = 55
IEG of Malta = 58
IEG of Cameroon = 51
IEG of Finland = 84
IEG of Uruguay = 69
IEG of Zambia = 56
IEG of Uganda = 67
IEG of Poland = 70
IEG of Portugal = 73 IEG of Slovenia = 65
IEG of Spain = 77 BCI of france= 99 IEG of france 72 BCI of USA 97 IEG of USA 74 BCI of nicaracgua = 81 IEG of nicaragua BCI of costa rica = 97 IEG of costa rica 67
BCI of malaysia = 97 IEG of Malaysia 58
IEG of Suriname = 56IEG of Switzerland = 62
IEG of Tanzania = 72 BCI of palestina IEG of palestina
IEG of Kenya = 59
IEG of Mexico = 61 IEG of Nigeria = 44 IEG of Paraguay = 67 IEG of Peru = 70
IEG of Germany = 78 IEG of Ghana = 58 IEG of Hungary = 70 IEG of India = 41 IEG of Indonesia = 55
IEG of Central African Republic = 46IEG of Chile = 62 IEG of Colombia = 75 IEG of Croatia = 75 IEG of Czech Republic = 68 IEG of Egypt = 44
IEG of Argentina = 72 IEG of Armenia = 58 IEG of Bangladesh = 53 IEG of Benin = 42 IEG of Bolivia = 66 IEG of Brazil = 68 IEG of Bulgaria = 73
BCI of Portugal = 99
BCI of Bahrain = 95 IEG of Bahrain = 46 INGLES BCI of Bahrain = 95 IEG of Bahrain = 46 BCI of Eritrea = 76 IEG of Eritrea = 47 INGLES BCI of Eritrea = 76 IEG of Eritrea = 47 BCI of El Salvador = 91 IEG of El Salvador = 68 INGLES BCI of El Salvador = 91 IEG of El Salvador = 68 BCI of Cyprus = 96 IEG of Cyprus = 65 INGLES BCI of Cyprus = 96 IEG of Cyprus = 65
BCI of Canada = 100 IEG of Canada = 74 INGLES BCI of Canada = 100 IEG of Canada = 74 BCI of Guatemala = 87 IEG of Guatemala = 51 INGLES BCI of Guatemala = 87 IEG of Guatemala = 51 BCI of Iraq = 88 INGLES BCI of Iraq = 88 BCI of Myanmar = 77 INGLES BCI of Myanmar = 77 BCI of Italy = 96 IEG of Italy = 64 INGLES BCI of Italy = 96 IEG of Italy = 64
BCI of Lebanon = 92 IEG of Lebanon = 47 INGLES BCI of Lebanon = 92 IEG of Lebanon = 47 BCI of Morocco = 88 IEG of Morocco = 45 INGLES BCI of Morocco = 88 IEG of Morocco = 45 BCI of Nepal = 58 IEG of Nepal = 51 INGLES BCI of Nepal = 58 IEG of Nepal = 51 BCI of Somalia = 57 INGLES BCI of Somalia = 57
BCI of Serbia = 98 BCI of Slovak Republic = 98 IEG of Slovakia = 69INGLES BCI of Serbia = 98 INGLES BCI of Slovak Republic = 98 IEG of Slovakia = 69 BCI of Thailand= 96 BCI of Venezuela, RB = 91 IEG of Venezuela = 68IEG of Thailand = 70 INGLES BCI of Thailand= 96 INGLES BCI of Venezuela, RB = 91 IEG of Venezuela = 68IEG of Thailand = 70
91
99100
95
9871
72
8952
96
100100
100
10099
85
9790
93
99100
93
9043
78
8742
96
99100
73
9336
93
8547
74 74
97
9899
86
98100
71
9518
93
88
74
88
9566
94
9999
93
9897
76
8763
59
83
53
95
99100
89
9896
95
99100
95
100100
95
9879
98
100100
97
100100
81
92
57
94
99100
78
9347
94
9679
82
8744
96
9893
61
8139
87
9782
97
99100
45
9764
4934
26
7964
37
8381
45
9669
53
9869
27
7661
43
8271
74
9858
99
100100
48
9772
93
99100
52
9772
72
9774
20
99
36
94
9999
48
9854
95
9998
30
9947
24
9746
23
9271
51
8184
93
9043
51
8184
11
8581
29
9750
38
9944
9
7747
47
9856
47
9963
76
9979
73
9468
11
7983
45
9668
8
7837
16
9753
11
70
56
43
9746
56
9970
56
99
71
43
9764
15
9125
56
99
62
5
9771
19
8653
18
5455
38
95
66
44
9665
53
9672
14
8057
99
10099
98
99
6
9834
98
99
6
9834
56 56
7878
94
25
6254 94
25
6254
87 87
9887 87
52
9951 98
52
9951
99
10090 90
29
9868
99
100
29
9868
100
99
54
96
74
100
99
54
96
74
83 83
83 8397
23
9437 97
23
9437
87
9680
87
9680 90 90
99
100
42
9755
99
100
42
9755
99
90
6
9836
99
90
6
9836
86 86
96
21
8429 96
21
8429 9519
22
7457
9519
22
7457
8033 8033
9999 9999
97
9999
42
9767
97
9999
42
9767
9997
87 87
98
41
9872
44
9861
9997 98
41
9872
44
9861
6
s/d
s/d
s/d
s/ds/d
n/d
n/d
n/d
n/dn/d
88 88
100100
s/d
s/ds/d
n/d
n/dn/d
73
69 69
s/d
s/ds/d
73
n/d
n/dn/d99 99
88 88 83 83
62 62 s/d
s/ds/d
59 59n/d
n/dn/d
s/d
s/ds/d
n/d
94 94
n/dn/d
93 93
87 87
BCI = 98 GEI = 69
179Social Watch Uruguay
government measuresIn the last 4 months of 2008, in an initiative to re-spond to the changes taking place in the world, the Government made adjustments to its economic policy. In particular it temporarily stopped interven-ing to manage interest rates as an operational tool in monetary policy, and it put more emphasis on controlling currency exchange rates in line with the idea that this would become the “automatic stabiliz-ing mechanism” of the system and would help to alleviate the effects of the external shock.7
In December 2008, as was happening all over the region, the Government took action to respond to the crisis. They implemented a package of measures to designed to provide liquidity for enterprises, im-prove their export capabilities and make new invest-ment more viable. This meant increased public ex-penditure which, in combination with slower growth in income, caused the fiscal deficit to increase to 1.7% of GDP in 2009. In 2010, however, results be-gan to improve.8 As happened in most economies, the public sector has played a dominant role in rais-ing investment and consumption. Even though the Uruguayan Government’s income was increasing at a slower rate, it maintained the same rate of increase in its public spending.
The commitment to eradicate povertyIn this period some other indicators improved, such as those measuring the evolution of poverty in terms of income. In 2008, the rate of indigence or extreme poverty decreased from 1.2% of all households in the country to 0.8%,9 and this rate held steady in 2009.10 Nevertheless, it is interesting to note that in 2009 indigent households in which a woman was the head came to 1% while the figure for male heads of households in this situation was an estimated 0.7%. Although these average figures do reflect an improvement, we should bear in mind that they also confirm a trend that has been evident since 2005,
7 Instituto de Economía, 2009.
8 Instituto de Economía, 2010.
9 The poverty line in 2002 was set by the National Statistics Institute (INE–Instituto Nacional de Estadística) based on the Encuesta Nacional de Gastos e Ingresos de los Hogares (National Household Expenditure and Income Survey) 2005-2006.
10 The data for 2009 are from estimations by the Institute of Economics, FCEyA, UDELAR, based on processing micro-data from the 2009 Encuesta Continua de Hogares (Continuous Household Survey).
which is that there are more indigent households headed by women. We ought to remember that indigent households are usually associated with a single-parent family structure, they usually have large numbers of children (the initial stages of the family life cycle) and a low number of breadwinners. As a consequence, these households form a vulner-able socio-demographic sector in which there are many dependents, few earners, and in most cases a woman at the head.11
Poverty has been decreasing in all parts of the country, not only in terms of people but in terms of households. According to the Institute of Econom-ics and taking the country as a whole, in 2009 the number of poor households amounted to 14.3%, which was 3.6 points below the 2006 figure.12 As regards numbers of people, in 2009 the poverty rate for the country as a whole was 20.9%.13
The situation of living in poverty or indigence affects people in different ways depending on their age, sex and ethnic origin. The poverty rate by age brackets shows that the greatest concentration is still among minors, mainly children under six years old.14
The trend is for poverty to decrease in all house-holds, those headed by men as well as those with a woman in charge. From 2003 to 2008 the poverty rate in households with a man at the head fell from 23.3% to 13.2%, and in households with a woman head from 17.2% to 14.5%. Note that the rate for women is higher, but what is important here is that yet again we have a reversal of the trend: in the 2003 to 2006 period the rate was higher for households with men at the head, and in 2007 the figures were almost the same (16.9% and 16.6% respectively), but in 2008 the situation was reversed (13.2% and 14.5% respectively) and the rate for women heads of households was higher.15 In 2009, according to the Institute of Economics, the figures were 13.9% for men and 14.8% for women.
11 INE, 2009.
12 Ibid.
13 Instituto de Economía, 2010.
14 INE, 2009.
15 Ibid.
It is also noteworthy that the biggest gaps are among the population of African descent: every-where in the country the poverty rate for this group is almost double that of whites. In 2008, some 19.4% of whites were living in poverty but among people of African descent the rate was 43.1%. This means that nearly half the people who define themselves as being of African descent are living below the poverty line. It is clear that ethnic origin is one of the factors behind social inequality.
The trend to poverty reduction is due to more jobs being generated and thus more income in house-holds, and in addition, in 2008, income in the coun-try was better distributed. The falling indigence rate would seem to be linked to social policies, in particular those that involve family allowances, which have been focalized specifically on this population group.
macroeconomics and inequalitiesIt is clear from this brief overview of some aspects of the country’s social and economic situation that a close watch should be kept on problematic areas when the time comes for the Government to deliver on its commitments. It is true there has been a great effort to develop social policies to promote equality and fight poverty, and to a degree these have been successful, but the results raise certain important questions.
Various indicators show that progress has been made in the field of gender equity but there are still big problems and perhaps the most seri-ous is that women are under-represented in political and economic decision-making positions.16 In fact, the country has regressed in this respect when we consider that today there are fewer women at the ministerial level of Government – which took office in March 2010 – than there were during the previous administration. In addition to this we have the begin-nings of the unfortunate trend towards more and more women being the heads of poor and indigent households. n
16 United Nations Development Program, 2008.
