The 2024 election campaign in Uruguay is coming to an end as people get ready to vote on Sunday. Reelection is not allowed in Uruguay, which means President Luis Lacalle Pou cannot run and a new president will be tasked with helming the country for the next five years. All 99 seats in the chamber of deputies and 30 seats in the senate are up for renewal. The population is also voting on a referendum to reform the country’s social security system that critics say could put institutional and economic stability at risk. 

Who are the presidential candidates?

Although there are 11 presidential candidates in total, there are three main contenders: Yamandú Orsi, from the center-left Frente Amplio (Broad Front), Álvaro Delgado, representing the incumbent Partido Nacional (National Party), and Andrés Ojeda, from the Partido Colorado (Red Party).

All polls show that no one will get the simple majority of votes required to win and there will be a run-off on November 24. Orsi has been leading the polls since before he even became the official candidate of his coalition. And although this support has had its ups and downs, he will enter Sunday’s contest projected to get close to 40% of the vote, which is close to what the coalition has traditionally obtained.

A former teacher and mayor of Canelones, Uruguay’s second largest region, Orsi beat Montevideo mayor Carolina Cosse to win the presidential nomination. Analysts say that his experience and the public endorsement he got from former president José “Pepe” Mujica, an icon of the Latin American left, were crucial. 

The road for Álvaro Delgado, the candidate representing current President Lacalle Pou’s party, has not been the same. Although he got over 60% of the vote in the party primaries, his polling numbers have been consistently falling throughout his campaign. Some analysts attribute this to government members accused of political espionage and corruption, as well as his choice of running mate, Valeria Ripoll, who was in the Uruguayan Communist Party before joining the PN.

Delgado has pitched himself as the continuity and stability candidate, having served as cabinet chief to the president. He has pledged to continue with government initiatives aimed at pursuing free-trade agreements, keeping taxes down, and fighting organized crime. 

Delgado’s drop in the polls has translated into increased support for Andrés Ojeda. The PC candidate is the only one whose support has grown throughout the campaign. All eyes will be on him on Sunday to see if he can make second place, earning himself a spot in the November run-off. This would be a major upset, as it would knock current Lacalle Pou’s party out of the running. 

Ojeda has fashioned himself the representative of “new politics” in Uruguay. He has used social media as his main conduit of promotion through a more relaxed messaging style.

Polls show that undecided voters hover around 11% of the electorate and gaining their support will be crucial for everyone’s aspirations. Frente Amplio is trying to win them over to obtain a majority in parliament, while Ojeda is making overtures towards them in order to pull off the upset. Delgado needs them. 

What are the referendums?

Another key aspect of Sunday’s vote will be the two referendums on constitutional reforms. One is a proposal to allow police raids at night. This would require reforming Article 11, which mandates that they can only take place during the day as it strictly forbids entering another person’s house at night without their consent. 

Although the initiative is viewed favorably in a country where polls show that safety is the top concern (53%), early estimates suggest that it won’t pass. 

The second referendum is on a proposal to change Uruguay’s social security system. The government has been a fierce critic of the proposal and the issue has been a major point of contention during the campaign. Backed by the country’s sole trade union federation, PIT-CNT, the measure seeks to lower retirement age to 60, establish that no pension can be below the monthly minimum wage, and eliminate private pension companies by turning pension management over to the state.

The PIT-CNT union federation has heavily promoted the social security reform during the four-month campaign. Presidential candidates, economists, and businesspeople have warned that it risks the country’s economic stability. Despite the noise, the issue has not gained traction among the general public.

Uruguayan society seems to be split evenly among supporters, opponents, and people who don’t know anything about it. 

“Apathy is what will save us from its approval,” Ojeda told Herald sister publication Ámbito a few days ago. Business chambers and public opinion analysts also share this opinion. However, its mere presence among the available ballots on Sunday and the however distant possibility it may be approved caused unprecedented movements in the Uruguayan market a month ago.

The exchange rate took a jump (over 42 pesos per U.S. dollar) and foreign investors dumped at least US$700 million worth of peso-denominated sovereign bonds.

This was sparked by concerns that the worst omens might come true. Studies conducted by independent analysts and government agencies agree that the approval of the social security reform would increase the fiscal deficit by 4%, raise the country risk, force the government to increase taxes, and unleash millionaire lawsuits against the state due to the confiscation of savings and the breach of contracts with private pension managers. 

At the beginning of September, JP Morgan sent a report warning its clients that even if the referendum was not approved (it needs a simple majority to pass) but gets a high level of support, it will leave the pension issue on the political agenda and condition the next government.

The political debate over the issue seems to have already started. Senator and Broad Front campaign manager Alejandro Sanchez spoke of nationalizing private pension funds — which manage close to US$23 billion and purchase state bonds — and unleashed a storm.

Although he later clarified that his remarks were out of context and meant to be ironic, Delgado and Ojeda did not let them slide. They pointed out the different positions within the center-left coalition are a problem that would limit Orsi’s decision-making power.

A social security reform was approved by Parliament last year but economic advisors and experts agree that it is only a matter of time before the system will have to be tweaked again. An aging population and less young people with formal employments able to contribute means that the math simply does not work. 

The important question will be under what conditions the country’s political actors engage in this debate.

Originally published in Ámbito