President in the Ring

Several months after he took over as President last December, Jorge Pacheco Areco started remarking, only half-jokingly, that Uruguay's problems were such that he needed "a little help from heaven" to solve them. Someone up there must like him. Last week torrential rains ended a six-month drought that had ravaged Uruguay's cattle and sheep, a chief source of income, and badly damaged the economy. Rebellious students who had seized the University of Montevideo and held it for four days finally agreed to leave peacefully. And Uruguay's third general strike in a month ended without Pacheco Areco's having had to use emergency measures. The President still needs, however, all the help he can get: he has set out to tighten the belt of a country that is used to wearing it very loose.

After more than half a century of prosperity and welfare-statism, South America's smallest republic had grown increasingly noncompetitive in world markets with its two main exports: beef and wool. State-owned enterprises, which employ a quarter of the labor force, had grown to what Pacheco calls a "three-bodies-for-every-job bureaucracy." Pensions, which working mothers, for example, can start collecting after ten years on the job, had become a way of life. Huge, Communist-backed unions were constantly on strike.

Violent Protests. Pacheco, 48, inherited this situation when he was elevated to his post from the vice-presidency by the sudden death of President Oscar Gestido. A former newspaper editor who relaxes by dropping in on his favorite gym to box, Pacheco opened his campaign for national discipline in a gloves-off spirit. He fired six members of his own Colorado Par ty from their ministerial jobs. Since then, he has replaced all but one man in the twelve-member Cabinet with "good technicians." To halt inflation, which had boosted prices 200% in 18 months and forced five devaluations of the peso, he decreed a total wage and price freeze. The government encouraged housewives to call special telephone numbers to report price rises, took to closing down the violators for ten-day periods and trotting store managers off to jail.

Uruguay's workers, who are used to winning paycheck increases every six months or so, violently protested against the wage decree. When the government work force joined in two strikes, Pacheco decided to make an example of traditionally lackadaisical clerks in the state-owned banks. Instead of being allowed to clock in at their jobs at noon, when their work day usually begins, they were ordered to take turns reporting to army garrisons for four hours a day of marching. Some also got trips to the army barber and showed up for their regular jobs with considerably shorter hair. Pacheco's point was to "militarize" the clerks, a status that could make their next strike tantamount to desertion, or at the very least cost them their treasured pension rights. They were not among last week's strikers.

No Self-immolation. Surprisingly, a poll released last week showed that 77% of the population supports Pacheco's actions, and he is showing no signs of letting up. "Our goals must be containment of expenses, austerity by everybody," he says. "The self-immolation of a society because of passivity is a philosophy that we will never accept. I'm in the ring and I'm fighting as hard as I can."

The wage and price controls, he hopes, are temporary measures, but he fully intends to keep the reins tight on the unions. He plans to start taxing unused land on Uruguay's huge ranches and to attract new capital with a stable peso. He also threatens to fire unnecessary bureaucrats, but in Uruguay no step involving jobs is quite that easy. There is, however, a measure before Congress that would give superfluous federal employees a year's salary just to quit.

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