The Political Economy of the Tourist Sector in Times of COVID-19: The Uruguayan Case

Abstract

With the outbreak of the pandemic, in the midst of the worst crisis in the tourist sector in Uruguay, and in a context of entrepreneurs’ general concurrence with government measures as opposed to marked worker dissatisfaction, the links of the center-right government headed by Luis Lacalle Pou with businessmen and tourism workers have been characterized by cooperation rather than conflict. This situation can be attributed to the preexistence of a social protection framework and solid labor institutionality, the country’s democratic strength and political culture favoring dialogue, and the instrumental business power compared with the weakness of the tourism workers’ collective action.

En medio de la peor crisis del sector turístico, y en un contexto de conformidad con las medidas gubernamentales por parte de los empresarios y de marcada disconformidad por parte de los trabajadores, el vínculo entre el gobierno de centroderecha de Luis Lacalle Pou y los empresarios y trabajadores del turismo se ha caracterizado por la cooperación más que por el conflicto. Esta situación puede atribuirse a la combinación de factores asociados a la preexistencia de una matriz de protección social y una sólida institucionalidad laboral; a la fortaleza democrática del país; a su cultura política favorecedora del diálogo y al poder instrumental del empresariado frente a la debilidad de la acción colectiva de los trabajadores del turismo.

Keywords

Tourism Uruguay Government Pressure groups COVID-19

On March 1, 2020, when Luis Lacalle Pou became president, Uruguay’s government shifted to the right, ending a 15-year-long progressive era (Garcé and Yaffé, 2014). After three center-left administrations with parliamentary majorities conducted by the Frente Amplio party (Broad Front-FA), the new government coalition that came to power was made up of five parties located between the center-right and the right of the ideological axis: the Partido Nacional or Blanco (National or White Party—PN), to which the president belonged, the Partido Colorado (Red Party), the Cabildo Abierto (Open Cabildo Party), the Partido Independiente (Independent Party), and the Partido de la Gente (People’s Party). This turning point was marked by the arrival of COVID-19 less than two weeks after the installation of the new officials. As in the rest of the world, in Uruguay the health emergency caused by the coronavirus made unprecedented demands on the health care system and was a severe blow to the economy, which had already been struggling since the end of the previous administration (following 15 years of boom). As 2020 approached, the gross domestic product (GDP) suffered a decline of 5.9 percent (BCU, 2021). One of the activities most affected was tourism, the country’s primary generator of foreign exchange (Uruguay XXI, 2017), and with the pandemic this provoked an unprecedented slowdown.

Rated as a high-income nation (World Bank, 2022) with a very high human development index (UNDP, 2020), Uruguay stands out in Latin America and the Caribbean not only for exhibiting the greatest degree of democracy in the region (IDEA Internacional, 2021; Economist, 2021) and the lowest levels of inequality on the subcontinent (ECLAC, 2021) but also for having an extensive system of social protection, outstanding labor institutionality (Marinakis, 2020), and a union movement that has been unified for over half a century in the Plenario Intersindical de Trabajadores–Convención Nacional de Trabajadores (Inter-Union Assembly of Workers–Workers’ National Convention—PIT-CNT). In light of these structural and institutional singularities and in the framework of the political change produced in the country, we believe it is important to analyze how Uruguay has handled the COVID-19 crisis in one of the most important sectors of its economy, tourism.

Although the government’s strategy regarding the health emergency called for what the authorities called “responsible freedom” rather than compulsory confinement, with initial urgings to “stay at home” and, later, “in your bubble” without stopping the “engines of the economy,” the majority of economic, social, cultural and sports activities found themselves somewhere between limited and paralyzed. The latter was the case for tourism and especially travel agencies and tourist guides, whose workers, faced with the dire situation, created the only union formed during the pandemic: the Sindicato Único de Trabajadores del Turismo del Uruguay (Union of Tourism Workers of Uruguay–—SUTTU) within the PIT-CNT. This was a historic act for a subsector with no history of collective organizing in the country.

Both SUTTU and the preexisting Sindicato Uruguayo Gastronómico y Hotelero del Uruguay (Food Service and Hotel Union of Uruguay—SUGHU) and other workers linked to the sector voiced their demands for economic assistance. The trade associations within the Cámara Uruguaya de Turismo (Uruguayan Chamber of Tourism—CAMTUR) also did so, with a much more direct link to the executive branch. This occurred in a climate of dialogue that did not result in any flare-up of conflict even though the workers, in contrast to the business owners, considered the government’s responses unsatisfactory.

In this context, the article poses two key questions: (1) What were the links like between the center-right/right wing and the business owners and tourism workers throughout nearly two years of health emergency in Uruguay (March 2020–December 2021)? and (2) In the midst of the sector’s worst crisis and in a setting of the tourism employers’ general concurrence with the governmental measures implemented versus the marked dissatisfaction of the workers, why did no conflict arise between the government and the tourism unions?

To craft this work, we used primary information sources (semistructured interviews with ministers, opposition parliamentarians, business and union leaders) and secondary sources (information gathered from public entities, partisan documentation, survey analyses, and press research). The article is structured as follows: (1) presentation of the importance of tourism in the Uruguayan economy and the impact of COVID-19; (2) presentation of the links between the government, business owners, and tourism workers; (3) analysis of the absence of conflict in the sector in the midst of its greatest crisis; (4) vaccination plans and the expectations of the actors; and (5) final reflections.

The Importance of Tourism in Uruguay’s Economy and the Impacts of COVID-19

Tourism involves a web of relations among various economic activities (transportation, lodging, food service, tourism operators, travel agencies, recreation and entertainment, organization of conventions and events, among others) with a spill-over effect on the entire economy. Prior to the pandemic, in 2019, this key industry, in both advanced and emerging economies, represented 10.3 percent of the global gross domestic product (GDP) (WTTC, 2020), while posting a decade of uninterrupted growth (UNWTO, 2020).

Until the advent of the coronavirus, tourism in Uruguay had been the primary foreign-exchange-generating activity (Uruguay XXI, 2017). By 2019, income from this sector topped US$1.75 billion and had exceeded the traditional export categories in a historically agro-export nation. By 2019, Uruguay had the largest number of tourists in South America relative to its population. That year, 3,220,602 people visited the country, the equivalent of more than 90 percent of its total population (estimated at 3,518,552 persons).¹ Thus, tourism had slowly become an important contributor to the GDP. In 2019 it amounted to 7.5 percent of the GDP and generated close to 130,000 jobs, 7.2 percent of all job posts in the Uruguayan economy. Of the total jobs in the sector, more than 93,000 were employees and 34,000 independent workers; 76,000 positions were full-time and 51,000 part-time.

All of these figures suffered a shock with the outbreak of the pandemic. According to figures from the Banco de Previsión Social (Social Security Bank—BPS), more than 10,933 of the 79,355 requests for unemployment subsidies processed at the start of the pandemic came from accommodations and food service, and in 2020 CAMTUR estimated its losses at more than US$1.4 billion because of the almost total paralysis of its activity (Altmark, 2020: 7). A study by the Cámara de Comercio y Servicios del Uruguay (Uruguay Chamber of Commerce and Services) (CNCS, 2021) has outlined the sector’s situation and surveyed perceptions and prospects from the owners of travel agencies, hotels, and restaurants for the second quarter of 2021 (Table 1). In the travel agency category, the interannual variation in sales was confirmed at –4.0 percent, in line with the interannual declines observed since the first quarter of 2020 although significantly less than previous records. Profitability with reference to the previous year was judged much better by 33 percent of respondents, normal by 33 percent, and worse or much worse by 33 percent. Businesses in the sector were pessimistic about increasing the purchase of supplies, making new investments, and hiring personnel and neutral about increasing the number of locales over the subsequent 12 months. Expectations were high; 60 percent felt that future profitability would be better or much better, 20 percent that it would be average, and 20 percent that it would be worse or much worse. In addition, travel agencies expressed greater optimism about sales in the third quarter of 2021: 43 percent held that sales would increase, 57 percent felt that they would stay the same, and none believed that they would diminish.

Table 1

Tourism Services in a Pandemic Context: Perceptions of Current Situation and Prospects (% of Respondents), Second Quarter 2021 (data from CNCS, 2021)

	Real Interannual Variation in Sales (%)	Expected Periods Affecting Activity (Quarters)	Prospects for Increasing Billing in Next Quarter (%)	Prospects for Future Revenue Increases Better or Much Better (%)	Personal Increase (%)	Investment Increase (%)	Increase in Purchase of Supplies (%)	Increase in Number of Locales (%)
Travel agencies	–4	6	43	60	0	0	0	0
Hotels	26.6	4	57	73	14	14	14	0
Restaurants and coffee shops	8.8	4	65	87	18	29	42	11

Source: Data from CNCS (2021).

For the hotel sector, the interannual variation of hotel sales in the second quarter was positive, with an increase of 26.6 percent that managed to reverse the negative trend previously registered. Profits were judged better or much better than a year earlier by 56 percent, average by 38 percent, and worse or much worse by 6 percent. Of the hotel owners consulted, 73 percent perceived that future profits would be better or much better; they were neutral regarding the purchase of supplies, investment, an increase in locales over the following 12 months, and the possibility of hiring staff in the subsequent 3 months. Likewise, they expressed optimism about the level of sales approaching the third quarter of 2021: 57 percent maintained that sales would increase, 38 percent that they would remain the same, and 6 percent that they would decrease.

For food services, the interannual variation in sales was positive in the second quarter, with an expansion of 8.8 percent, which reversed the tendency previously seen and increased sales in real terms. As for the profitability of restaurants and coffee shops, the perception was quite optimistic: for 57 percent, profits with respect to a year prior were better or much better, while for 11 percent they were worse or much worse. At the same time, restaurant owners were optimistic about making investments and buying supplies, although they were neutral about hiring personnel over the next 3 months and regarding an increase in the number of locales in the subsequent 12 months. Regarding the future, there was significant optimism (87 percent). Restaurants and coffee shops were also optimistic about the level of sales for the third quarter of 2021: 65 percent felt that sales would increase, as opposed to 30 percent who thought they would remain the same and 4 percent who said that they would decrease.

In sum: profitability was affected in all the services of the tourism sector, but by the second quarter of 2021 the hope was to “return to normalcy” in the following year. There were hopes of higher profits when conditions improved.

A clarification is in order here. On the one hand, the structure of the Uruguayan labor market, in line with those of the rest of Latin America, has historically registered a significant number of informal workers. Nevertheless, recent figures demonstrate a decrease of 16 percent between 2004 and 2019, making Uruguay the most formal country in the region, according to the International Labor Organization (ILO) (De los Santos and Fynn, 2020).² In addition, the data on informality in the tourist sector gathered by the Instituto Nacional de Estadística (National Statistics Institute) show that prior to the pandemic, in 2019, 25.2 percent of workers whose primary job was in this sector did not contribute to social security. During coronavirus times, informality in workers linked to tourism increased from 26.2 percent in 2020 to 29.3 percent in July 2021. Travel agency and hotel workers have the most social protection, while tourist guides and food service attendants are in the worst condition (Table 2).

Table 2

Informality and Formality by Type of Activity (%), July 2021

	Travel Agencies	Hotel Industry	Tourist Guides	Gastronomy, Chefs	Gastronomy, Wait Persons, Support Staff
Formality	96	97	73	100	60
Informality	4	3	27	–	40
Total	100	100	100	100	100

Source: Data from INE (2021).

Informality in the sector is of concern to all the actors involved. In statements to the press, the president of CAMTUR, Marina Cantera, indicated that “the pandemic exposed the enormous informality existing in the tourist sector.”³ In the same vein, the president of SUGHU, Jorge González, has stated: “The BPS compliance checks are going to have to be strict, clarifying that they are afraid to register high levels of informality, given the workers’ need to have or improve their incomes. . . . We run the risk of having just as much informality as there was before.”⁴

Government, Business Owners, and Workers: Between Cooperation and the Absence of Conflict

The Health Emergency and the First Measures in Times of “Tourism without Tourists”

On March 13, 2020, after hearing of the first four cases of COVID-19 infections in the country, the administration of the self-proclaimed “multicolor coalition,” led by Lacalle Pou, decreed a state of national health emergency (Decree 93/020; IMPO, 2020). The content of this decree and of subsequent provisions in the framework of the pandemic were registered not as an obligatory quarantine mandate but rather as an effort to keep the economy functioning and were discursively based on what the government called “responsible [individual] freedom.” The first measures aimed at controlling the propagation of the virus included partial and total closures of borders; isolation of persons entering the country from high-risk areas; suspension of public events (cultural, sports, and others); closure of public and private tourist centers; urging the closure of shopping centers; an appeal to the population to suspend practices and events that could create crowds; suspension of in-person classes at all educational levels and a shift to virtual learning; and the implementation of telecommuting in the public sector and the recommendation that the private sector follow suit if possible.

In this way, three indispensable conditions for the development of tourism had been suspended: open borders and internal and in-person mobility. The immediacy of the shock was such that, on the same day that the presence of COVID-19 was announced, in a previously scheduled meeting with then-minister of tourism Germán Cardoso,⁵ the Asociación Uruguaya de Agencias de Viajes (Uruguayan Association of Travel Agencies—AUDAVI), a member of CAMTUR, asked the president to declare an emergency for tourism. In the face of the outbreak of the sector’s worst crisis in the country and the world, business people and workers requested urgent support from the government.

The first actions of the executive branch that included the tourist sector involved flexibilization in the use of the traditional unemployment subsidy for all sectors of the industry and authorization of a special partial unemployment subsidy system for all sectors of activity;⁶ offering loans for small and medium-sized businesses; postponements of due dates for payments to the BPS and the Dirección General Impositiva (General Taxation Directorate); postponements and benefits in the social security contributions for one-person enterprises and self-employed workers who contribute primarily through the single-tax regime, companies in the industry and trade with up to 10 employees; and flexible credit lines from the state bank and other credit programs with rates subsidized by the Ministerio de Economía y Finanzas (Ministry of Economy and Finances—MEF) for affected companies.⁷

On the one hand, these measures (as well as others beyond the tourist sector) contained a state intervention component made possible by the formalization of employment in the travel agency and hotel categories and solid labor institutions including a long tradition of tripartite collective bargaining (wage councils). Added to this was a system of social protection and accrued welfare benefits generated during 15 years of product growth and expansion of rights.⁸ On the other, although the government drew on the strength of social security and certain tax waivers for benefits, exemptions, postponements, and sectoral or general benefits, it was reluctant to implement a subsidy or temporary emergency basic income equivalent to the national minimum wage for freelance and informal workers. This proposal was made early on by both the FA and the PIT-CNT and taken up by tourism workers, who, while they earned good salaries as travel agents and tourist guides, have historically experienced high volatility and labor informality (lacking social security).

Lastly, the president and his economic team made it clear from the outset that large companies would not be obligated through taxation to redistribute resources and help mitigate the situation. In the words of Lacalle Pou; “Today, taxing capital would decapitate possibilities for those who will push hard to resolve the crisis. That is why we will not do it” (El Observador, April 9, 2020).⁹

Government and the Business Elite: A Bond of Cooperation

When the health emergency irrupted, in addition to the uncertainty, an atmosphere of social dialogue formed in which President Lacalle Pou held meetings with the opposition, the union federation and the business associations. While the mutual understanding between the FA and the PIT-CNT had been explicit during 15 years of progressive administrations,¹⁰ the rise of the multicolor coalition was very well received by business leaders. Historically, the president’s party, the PN, has been known for positions decidedly favorable to the free market and a withdrawal of the state. During the previous PN administration, in the 1990s, Luis Lacalle Herrera (1990–1995), Lacalle Pou’s father, had promoted an agenda of privatization and deregulation in line with the climate of the neoliberal era promoted by the Washington Consensus (Harvey, 2007). Hailed by the top business executives but in a country with a long tradition of state intervention, such an agenda could only be partially implemented, since it provoked fierce opposition from the union and political left and also by the Partido Colorado.

During the course of the pandemic, the affinity between the new administration and the business elite was evident, and the case of the tourist industry was no exception. Not all the demands of CAMTUR and its associates were fully granted, but the dialogue between the government and the trade associations has been constant and the recognition between the two actors reciprocal. Thus, in the midst of an unprecedented crisis, the link between political power and corporate power was marked by cooperation. The first sign of this occurred when, in March 2020, CAMTUR complied with the governmental appeal to remain at home and not vacation during “Tourism Week,” the most important time for tourism in the country after the summer season. At the same time, this association sent the MEF a set of demands for dealing with the total inactivity of the sector that included credit lines with conditions, special guarantees, and tax benefits. These and other requests were presented in a meeting between Lacalle Pou and the Confederación de Cámaras Empresariales (Confederation of Business Associations—CCE). There, the president of CAMTUR, Juan Martínez, raised as urgent issues “sustaining the tourism value chain”: the rescheduling of tickets and tourist packages (given the claims for the cost of trips not made because of the pandemic), adjustments in the cost of guarantees (insurance for consumers in case of nonfulfillment) demanded of the travel agencies, flexibilization of the unemployment subsidy, and the granting of soft lines of credit.¹¹

Some of these measures were aimed at accommodating the travel agencies,¹² where, in the words of a business owner in the category, “the stop order was total,” with 95 percent of their workers on unemployment payments (interview, Montevideo, May 27, 2021). From AUDAVI¹³ there was insistence on a declaration of a tourism emergency and on the passage of a law to reschedule travel, in addition to tax benefits, postponement of payment of taxes, and reductions in fixed tariffs.¹⁴ Following the session between AUDAVI and the Secretariat of the Presidency of the Republic, some of these demands were met through the application of temporary exemptions in electricity and water charges for travel agencies, hotels, real estate companies, restaurants, and party halls, among other sectors.

Thus the dialogue between trade associations and government flowed and assistance was enacted. Nevertheless, the measures announced were usually presented with limited implementation time frames and sectoral scopes in an extremely uncertain context and in the midst of a sharp economic contraction. By then, what did seem to be under control, at the national level, was the health situation. By July 2020, this was reflected in an 83 percent approval rating for the president’s and his administration’s performance regarding the coronavirus (Factum, 2021). It was also reflected in the international recognition of the country for its “successful” handling of the pandemic, which included the opening of borders by the European Union for travelers coming from Uruguay.

However, by October 2020, as the summer season approached in the Southern Hemisphere, the epidemiological situation was moving toward an exponential deterioration. Therefore, the executive branch decided to keep borders closed to foreign tourists and to establish strict entry protocols for persons coming into the country. The president of AUDAVI, Carlos Pera, considered this closure “to be expected” but expressed concern over the lack of other action. Although he was grateful for the support received and the “open door” position of the Ministerio de Turismo (Ministry of Tourism—MINTUR), conscious of the fact that the decisions were not made at that level he asked Lacalle Pou to get out his “little tool kit” to prevent the disappearance of the tourist sector (Radio Universal, October 26, 2020). When the executive branch communicated new measures for travel agencies, hotels, and tourist transportation as part of a summer plan (exceptions and tax reductions, access to credit guarantees, benefits in contracts for new or reinstated workers, financing of rentals), Pera voiced a “huge and vigorous apology” to the president for the metaphor used and expressed appreciation of the announcements. Nevertheless, he felt that they were basically aimed at the domestic tourist industry and repeated the request for a law on the rescheduling of travel, among other measures (Radio Universal, March 10, 2020). Meanwhile, the CAMTUR leadership “welcomed” the announcements even though they did not include all of its requests (El Observador, March 10, 2021).

Around March 2021, after a summer season geared toward domestic tourism that, as then-minister Cardoso acknowledged, was “far below the previous one” (Radio Uruguay, March 2, 2021), CAMTUR clamored for an extension of the summer plan benefits and presented MINTUR with a set of proposals to alleviate the situation of the sector (reduction in contributions to social security, the broadening of unemployment insurance, and tax deductions for tourist consumption). Lacking the authority to decide on distributions, the former minister, Cardoso, included those proposals in a 21-measure “rescue plan” for the support and stimulation of tourism, which he submitted to Lacalle Pou for consideration in April 2021.¹⁵

In a setting of a worsening epidemiological situation and after receiving requests from other partners in the coalition to tackle the widespread health, social, and economic crisis,¹⁶ the executive branch announced a package of measures that, on a sectoral level, reflected a large part of Cardoso’s plan. The former minister expressed his satisfaction with his effort and pointed out that “more than 90 percent of the measures we proposed have been accepted” (Germán Cardoso, interview, June 16, 2021). The notice was welcomed by the business associations and well-received by the tourism associations but with qualifications. The former president of CAMTUR and the new president of the CCE saw that the government had focused “on the right sectors” and had heard their demands. Meanwhile, the Asociación de Hoteles y Restaurantes del Uruguay (Association of Hotels and Restaurants of Uruguay—AHRU) judged the announcement positive, although it emphasized that greater reductions in the cost of public services could have been made. In turn, AUDAVI maintained that these measures had been “long awaited” and were now “very welcome,” even though they did not include travel rescheduling (La Diaria, April 20, 2021). Other trade associations, such as the Cámara Hotelera y Turística de Colonia (Colonia Hotel and Tourist Chamber),¹⁷ were more critical, regretting the short-term nature of the support implemented (two or three months) (La Diaria, April 27, 2021), and said that, although the measures represented “an assist,” they were enacted “a year late” (Radio M24, April 27, 2021).

According to Marina Cantera of CAMTUR “a great number of demands made by the association . . . were not accepted. They were heard, but, in the end, drew no response.” Nonetheless, she acknowledged that “many of the things we presented were . . . translated into measures” and “there have been measures for the various sectors [of tourism].” In a context of great adversity, Cantera’s assessment was that they had been injecting “oxygen” into the sector. In her judgment, government actions “are never sufficient, with such a complex situation as this, but they have been able to mitigate it to some degree or at least provide small breathers for the companies at different points” (interview, Montevideo, June 1, 2021).

Toward the second semester of 2021, that “oxygen” appeared with the approach of the 2022 summer season, with new government measures that combined the extension of the exemptions for the sector with the easing of requirements for entering the country and finally opening the borders with an eye to Tourism Week 2022. This, in the context of a successful vaccination plan against COVID-19 (by January 2022 half of Uruguayans had already received three inoculations),¹⁸ even when the infections curve rose from a flattening in June–December 2021 to a peak in January-February 2022).

Thus, the tourism industry’s trade associations have managed to translate their “direct line” to the executive branch into the fulfillment of a good number of their many demands. Meanwhile, the workers of the sector, with a weak union organization and extremely limited collective action, found themselves very far from such a capacity to influence.

Government and Workers: Unsatisfied Demands and the Creation of a Union during the Pandemic

Throughout the health crisis, the PIT-CNT was in dialogue with the executive branch in tripartite meetings with the business owners. In fact, the ILO has referred to the Uruguayan case as paradigmatic, noting that the operation of its labor institutions in a setting of tripartite social dialogue and a moderate level of informality was key to its dealing with the coronavirus crisis.¹⁹ In the concrete case of the tourism workers, with their higher levels of informality and lower levels of unionization, communication with the government in times of COVID-19 occurred in tripartite settings created for this purpose²⁰ and in other specific formal spaces but lacked access to the upper-level decision-making circles (the presidency and the MEF).

Among these workers hard-hit by the pandemic, the situation of the employees of travel agencies and tourist guides was especially critical because it is the only way not to fight alone. After March 2020 the vast majority of them found themselves either on total or partial unemployment insurance or completely disconnected. Faced with the crisis, they had to organize in pursuit of their common interests. Therefore, in an act that was unique in the sector, in the throes of the health emergency a union of travel agency workers and tourist guides was formed. Incorporated into the Federación Uruguaya de Empleados del Comercio y Servicios (Uruguayan Federation of Business and Service Workers—FUECYS) and the PIT-CNT, SUTTU was created on August 26, 2020, in a context of extreme hardship and with members with practically no experience in union or any other type of activism. As indicated by its steering committee, SUTTU “was not born out of the bonanza of tourism . . . . We found ourselves united by the adversity [with] people who were not used to or had no experience as activists, [who] had no labor union history, who perhaps were never part of any group or [had engaged in] neighborhood activism” (leader of SUTTU #1, interview, Montevideo, May 31, 2021). The main concerns of these workers go back to their critical job situation, their current low wages, and future instability. The irruption of the coronavirus became a factor in motivating the unionization of workers who until then had been rather reluctant to participate in this type of organization. Both the travel agency workers and the tourist guides interviewed recognized that the pandemic was the driving force in the creation of SUTTU. In the words of one of its members: “Because of the pandemic, people got together We guides came together around this. This union is the result of a crisis, made up of people who had never thought about being in a union before” (leader of SUTTU #2, interview, Montevideo, May 24, 2021).

SUTTU has a low affiliation rate, with difficulties in organization and mobilization that have been even more complex because of the context and the scarcity of human and financial resources. Among the tourist guides, there are also few members, but the number has grown, partly because of the subsidy granted them of US$155 monthly for three months. The reality of these workers is even more precarious than that of the travel agents: the majority are freelance and informal, and since they are not covered by social security they have no right to an unemployment subsidy.

Since its creation, SUTTU has presented its demands to various institutional entities. It has appeared before the General Assembly and has met with MINTUR, the Ministerio de Trabajo y Seguridad Social (Ministry of Labor and Social Security—MTSS), and the BPS. It has also met with AUDAVI and has shared tripartites with CAMTUR. It held two demonstrations to demand economic support from the government. In November 2020, after the first of them,²¹ its leader, Javier Mossi, told the press that close to 95 percent of some 3,000 travel agency workers and tourist guides were on total or partial unemployment insurance, with incomes under US$310 per month. In view of this situation, SUTTU was requesting a national tourism emergency law to maintain the job posts,²² the authorization of multiemployment regulation without losing the ongoing unemployment insurance, a special subsidy to be paid as compensation for the income already received until the reactivation of the sector, and the creation of a registry or “job bank” of workers in the sector who had been dismissed in order to hire personnel from them when the situation allowed it (Radio En Perspectiva, November 27, 2020).

On repeated occasions, SUTTU asked to meet directly with Lacalle Pou, with no reply. In February 2021, after the executive branch announced new actions, the tourism unions organized in the PIT-CNT²³ released a joint declaration in which they expressed appreciation for the measures but judged them “frankly insufficient.” They stated that, of the requests made in the tripartite venue, very few had been considered and only partially (extension of unemployment insurance, easing of the multiemployment regulation, and subsidy for tourist guides). Furthermore, they pointed out that the workers not covered by social security were not able to access emergency income or subsidies in essential public services, “having to settle for only the benefits of the Ministry of Social Development, or directly resorting to soup kitchens [ollas populares].”²⁴

The union demanded consideration of unitax or self-employed workers whose activity was reduced to a minimum (e.g., tourist guides and all workers involved in tourism), extension of unemployment subsidies throughout 2020 with no reduction of the amounts granted, streamlined mechanisms for their receipt, and avoidance of delays; and activation of the multiemployment regulation without loss of unemployment insurance. The government responded to these demands with a three-month subsidy to tourist guides of US$150 nine months after the start of the health emergency, partial or total unemployment payments granted and successively extended for dependent employees but no assurance that the amounts would not be reduced, and the possibility of applying the multiemployment regulation.

At the same time, other demands received no response, among them an increase in unemployment payments according to the consumer price index, payment of a complement for workers on unemployment insurance with incomes below the national minimum wage, an increase in the percentage of the unemployment subsidy (payment of 80 percent of income vs. 50 percent), a basket for public services (electricity, water, telephone) or reduction in rates for workers on unemployment insurance and informal workers with partial or total loss of income, mechanisms to avoid lay-offs in companies in operation and increased protection for terminated workers, and the creation of a registry or job bank for tourist subsectors.

Despite the creation of a new union and the dissatisfaction of the remainder of the tourist sector workers with the measures implemented during COVID-19, the relations between the government and the tourism unions have not led to conflict.

Political Economy of a Crisis without Conflict

The power of the business elite and its influence on public policy is long-standing issue in political science. The academy has conceptualized two types of power associated with different types of influence: “structural” (Poulantzas, 1973; Block, 1987; Lindblom, 1977) and “instrumental” (Mills, 1956; Miliband, 1969). The former rests on the perception of a threat of divestment faced by the leaders of market democracies insofar as they are dependents of the capitalists. The second refers to deliberate action by business owners (through lobbying, funding of political campaigns, or privileged access) on the decision makers with the aim of influencing the outcomes in public policy to their advantage. The structural-power approach underscores the business elite’s ability to constrain the political agenda of governmental agents, while the instrumentalist approach focuses on the capacity of the business elite to reduce the array of possible issues included on the political agenda (Fairfield, 2010).

During the health emergency, the tourism elites resorted to their instrumental power to counteract the effects of an unprecedented crisis. The nexus with the government has unfolded in terms that both the union leadership and the executive branch have described as “listening” and a “direct line.” The former tourism minister has called the relationship “excellent, a constant back-and-forth” (Germán Cardoso, interview, Montevideo, June 16, 2021), while the head of the MTSS has underscored the “fluid dialogue” and “good spirit” among the parties (Pablo Mieres, interview, Montevideo, June 10, 2021). Similarly, the president, referring to the attitude assumed by tourism business owners in the face of the pandemic, has indicated that “the organized actors of the tourist sector, in their manner, in their tenor, in the moment and in their attitude, deserve praise” (La República, December 1, 2020).

One of the resources identified in the literature as essential to the deployment of instrumental power is the employers’ ability to optimize their position in negotiations with the government and coordinate their opposition in light of possible reforms considered unfavorable to their interests (Fairfield, 2020). The tourism business elite is not homogeneous. Its ability to deal with a crisis of the magnitude imposed by the coronavirus has varied with the activities of the sector. Furthermore, although the government has not met all the demands of business, a tone of cooperation has prevailed in the context of a governmental attitude favorable to the business elite, given that tourism had been the number-one foreign-exchange-generating activity in the country.

The situation of the tourism workers was quite different. Although the state granted them a certain support through the preexisting network of welfare and labor institutions, the majority of their demands went unheard. To mitigate the effects of the crisis, some of the workers most affected by the pandemic organized as SUTTU, but, as Olson (1985) has pointed out, they have failed to convince the great majority of their potential members of the benefits of joining them. This reflects a certain negative feeling toward unions (leader of SUTTU #2, interview, Montevideo, May 31, 2021):

There are not very many of us, and it is hard to attract new members because there are persons who are not used to it. . . . Some say, “I don’t want to go against my company, which has been good to me, has subsidized me, is going to give me work again in the future.” . . . People’s fear is that “union” may be a bad word to the business owner, despite the fact that AUDAVI is in agreement with the union and that we have shown that we are not against the employers. . . . What we want is to go back to work.

The creation of SUTTU has not meant conflict either with the employers or with the government. Moreover, the organized tourism workers have participated in the tripartite channels of dialogue enabled by the government. However, they feel not only that the majority of the demands have remained unresolved but that they have been unable to present them more directly to the upper-level decision makers.

The asymmetry of influence among pressure groups is notorious. SUTTU is still waiting for a response to its repeated requests for an audience with the president. Meanwhile, CAMTUR has had continual meetings with him as well as with the highest-ranking officials of the MEF, the MTSS, and MINTUR. While the association has managed to have MINTUR deliver its proposals to Lacalle Pou and the economic team, the workers have not had that opportunity. According to SUTTU (leader of SUTTU #3, interview, Montevideo, May 31, 2021),

We propose things, . . . but there are never concrete answers. In the MTSS, they tell us that issues having to do with economic matters must be presented to the MEF, but the MEF does not respond. We do not know if the MTSS passes them on to the MEF. And in MINTUR, the former minister, Cardoso, himself told us that he had nothing to do with money issues and washed his hands of the matter.

In this context, the government ruled out providing the emergency payments equivalent to the minimum wage advocated by the tourism workers in the tripartite arena. The PIT-CNT and the FA had made a similar proposal for workers lacking social security, but there were no coordinated actions among the tourism unions, the union federation, and the center-left political party either to promote this initiative or to jointly advance others.²⁵

In summary, the absence of conflict corresponds to the combination of four factors: (1) the preexistence of a system of social protection and strong labor institutionality, from which the state offered minimal social, economic, and health care support to the most affected workers; (2) the country’s institutional strength and the dialogic and republican political culture of the primary actors in its political system, over and above ideological differences or conflicting interests; (3) the deployment of instrumental power by the tourism business elite in a framework of fluid connections between the center-right government and business power; and (4) the weakness of the collective action of workers from a sector with little or no experience in union organizing and greater affinity with their employers than with the PIT-CNT.

Vaccination, Tourism, and Prospects

Delayed but Successful Vaccination

Uruguay went through most of 2020 with very low registries of COVID-19 cases. This sparked praise in the international press²⁶ and translated into high approval levels for the government. However, toward the end of that year, the wave of infections began to skyrocket. In March 2021, the country entered the red zone of risk, according to the Harvard University index, when vaccination of the population against the coronavirus was just beginning; by the end of April 2021, it led the world in per capita deaths, with an ever more overstressed health system^27,²⁸—this in the midst of the health emergency and the corresponding health protocols (use of masks, alcohol gels, physical distancing, etc.) but against a backdrop of the influx and expansion of the P-1 variant originating in Brazil, whose land border with Uruguay was scantly monitored by the authorities.

The dire situation created public alarm. The medical and scientific community, including the prestigious specialists of the honorary scientific advisory group that had been advising the government since the start of the pandemic, clamored for a reduction in mobility to secure the health situation while inoculation proceeded.²⁹ The political opposition supported the demand while criticizing the government’s delay in negotiating for the vaccines to be administered. President Lacalle Pou, in turn, continued calling for responsible freedom with the assurance that all possible measures were being implemented.

Uruguay was one of the last countries in South America to receive vaccines against the coronavirus but proceeded firmly in its immunization campaign. The strategy for acquisition of the vaccines was unconventional: in its public discourse, the executive branch did not rule out any option and ended up negotiating access to doses from various sources—Pfizer (United States), Coronavac (China), and AstraZeneca (through the Covax mechanism of the World Health Organization). In the context of a strong health system and a long tradition of vaccination, inoculation against COVID-19 was successful in the reduction of infections and deaths. The country went from being among those with the most registered deaths per million inhabitants between April and June 2021 to being the second-highest in vaccinations delivered to its population (following the United Arab Emirates) by August 2021, according to monitoring by Oxford University’s Our World in Data, with 144 doses per every 100 inhabitants.³⁰ By July 2021, the phased administration of a third Pfizer dose had been announced for those who had previously received Coronavac, and the purchase of a fourth booster with that pharmaceutical company was being arranged.³¹ This took place while the country was slowly returning to a certain normality, and the health emergency was finally lifted in April 2022.³²

Preparations for Postvaccination Tourism

During the vaccination process, prior to winter vacation, a series of governmental measures was implemented in an attempt to stimulate tourism. By May 2021 persons arriving in the country with complete vaccinations or having recovered from COVID-19 were no longer required to quarantine, and children under eight were exempted from quarantine. Entry restrictions for immunized foreign nationals were adjusted; foreigners with property in Uruguay were allowed to enter as of September 2021 and any foreign tourist with a vaccination certificate as of November 2021. It was decided to accept the arrival of tourists who had received different vaccines, including Sputnik V, of Russian origin and widely used in Argentina—a country that, along with Brazil, constitutes Uruguay’s main market for inbound tourism.

Thus, a phased reopening of international tourism was begun, to the satisfaction of the tourism operators who were demanding it. Even in a climate of uncertainty, with immunization advancing and border reopening under way, hopes for a summer 2022 season, which President Lacalle Pou predicted to be a tourism “recovery,” grew.³³

At CAMTUR, although the sector’s situation was still considered “fragile,” the sense was that “people want to travel, either within or beyond the borders,” making prospects very encouraging (Marina Cantera, interview, Montevideo, September 22, 2021). Within SUTTU, it was understood that, for travel agencies engaged in outbound tourism, the improvement in the internal health situation had had no effect on the sector’s reactivation, although it was affected by “improvement in pandemic control in the countries that receive Uruguayan tourists” (leader of SUTTU #1, interview, Montevideo, September 21, 2021). The union suggested that the scenario had worsened, since the price of the consumer basket had risen and until right before the summer season most workers still had unemployment insurance as their only income. In this context, the union met with FA legislators, but without parliamentary majorities this political opposition party lacked the capacity to change the situation. SUTTU saw the border openings, the country’s greater connectivity, and the increase in frequency of flights as promising, although it did not see as equally positive the outlook for local tourist guides, whose situation among the sector’s workers was the most pressing and precarious.

Consistent with this perspective, a tourism adviser of Montevideo’s subnational government pointed out that “progress in vaccination benefited internal tourism, allowed for the return of activities (cultural ones, for example), and also created a sense of security in some of the public.” However, in line with SUTTU, the specialist moderated his expectations by taking into account other variables such as purchasing power (tourism specialist, Montevideo City Hall, interview, September 22, 2021). In this respect, we should keep in mind the increase in unemployment (which averaged 9.4 percent in 2021) and the loss in real wages with respect to the precoronavirus situation (UCU, 2022).³⁴ The socioeconomic indicators show that the effects of the pandemic will take time to recede for both workers and business owners. In fact, AUDAVI signaled the need to extend partial unemployment payments beyond March 2022 and warned that without them more than one-third of the travel agencies that had remained open would close.³⁵

In summary, it was reasonable to expect that with progress in vaccination and the borders reopening to international tourism, the prospects for both the summer and Tourism Week were improved. With the health emergency ended, Deputy Minister of Tourism Remo Monzeglio ventured to say that “Uruguay’s tourism will recover sooner than in other countries,”³⁶ but the situation for both workers and business people continued to be very difficult, and both actors needed government action to avoid collapse.

Final Reflections

As in the rest of the world, Uruguayan tourism suffered its worst crisis following the irruption of the pandemic. In this context, the connection between government, business people, and workers occurred in a climate more of cooperation and pursuit of dialogue than of conflict. On one hand, we should highlight the display of instrumental power of the business leadership and the ideological harmony between the latter and the center-right government of the multicolor coalition. On the other, despite the dramatic situation of the workers, who in the best of cases were subsidized by social security with their incomes reduced by half, the relationship between tourism unions and government did not result in overt conflict. Although a new union for travel agents and tourist guides has emerged, its very recent creation and its weaknesses in collective action to date have not allowed it to exert real pressure on the government and obtain many responses to its demands. In this sense, it will be important to continue analyzing the development of this union and its connections to the government and the business elite in postpandemic times.

The pandemic continues, and if its successive waves and strains around the world have demonstrated anything it is that caution in drawing certain inferences must prevail. Nevertheless, currently the health situation is no longer critical, and the government has declared an end to the health emergency, thus inaugurating the return to “normality.” At the time of writing of this article, autumn 2022 has begun in the Southern Hemisphere, and Uruguay is moving toward the second highlight of its annual tourist season, Tourism Week. While numbers from the summer were irregular (promising in the first half of January but discouraging from then till March because of the wave of infections from the Omicron variant, the rains, and temperature drops), the operators and tourism workers and the government are waiting until the end of the Easter holidays to take stock after two years of closed borders. In this sense, the temporality places limits on arriving at definitive conclusions. There is a need to continue analyzing the relationships between the government and the pressure groups linked to tourism from a political economy standpoint in a postemergency context. One day the pandemic will be over, and it will be essential to discuss new constructions and theoretical approaches based on the lessons arising from this critical time.

Footnotes

Notes

Alexandra Lizbona and Andrea Delbono are both adjunct professors in the School of Law and assistant professors in the School of Social Sciences at the Universidad de la República in Uruguay and doctoral candidates in political science at the Universidad Nacional de San Martín in Argentina. Victoria Furio is a translator and conference interpreter residing in Yonkers, NY.

References

Altmark

Silvia

2020 “El turismo en Uruguay en tiempos de coronavirus.” Working Paper, FCEA-UDELAR. Colibri.udelar.edu.uy/jspui/handle/20.500.12008/25614 (accessed April 2022).

BCU (Banco Central del Uruguay) 2021

“Cuentas nacionales: cuarto trimestre 2020 y año 2020, estadísticas y estudios.”

https://www.bcu.gub.uy/Estadisticas-e-Indicadores/Cuentas%20Nacionales/Informe%20de%20Cuentas%20Nacionales%20Trimestrales_2020_IV.pdf.

Block

Fred

1987 Revising State Theory: Essays on Politics and Postindustrialism. Philadelphia: Temple University Press.

BPS (Banco de Previsión Social) 2020 “Evolucion de los cotizantes.” https://www.bps.gub.uy/.

Carneiro

Fabricio

, et al. 2020

“Mercado de trabajo, cambio de gobierno y COVID-19 en Uruguay: un balance preliminar.”

Trabajo y Sociedad, no. 35, 119–146.

CINVE (Centro de Investigaciones Económicas) 2020 “Monitor mensual de seguridad social.” Observatorio de Seguridad Social. file:///Users/andreadelbono/Downloads/02_2020_Monitor_SS.pdf.

CNCS (Cámara de Comercio y Servicios del Uruguay) 2021 “Actividad comercio y servicios segundo trimestre 2021.” https://www.cncs.com.uy/uploads/informe/40a781511c27ab512143212cbe4a95ed3214b954.pdf.

De los Santos

Daniela

Fynn

Inés

2020 “COVID-19: los límites a la informalidad en tiempos de distancia social.” Razones y Personas. https://ciedur.org.uy/wp-content/uploads/2020/12/Razones-y-personas-repensando-Uruguay-COVID-19-Los-li%CC%81mites-a-la-informalidad-en-tiempos-de-distancia-social.pdf (accessed April 2022).

ECLAC (Economic Commission for Latin America and the Caribbean) 2021 Panorama social de América Latina 2020. Santiago: ECLAC.

10.

Economist 2021 “Democracy index 2020: In sickness and in health?” Intelligence Unit. https://pages.eiu.com/rs/753-RIQ-438/images/democracy-index-2020.pdf (accessed April 2022).

11.

Factum 2021 Encuesta nacional Factum: Evaluación del desempeño del presidente y del gobierno en coronavirus, Mayo 2021. Montevideo: Factum.

12.

Fairfield

Tasha

2010

“Business power and tax reform.”

Latin American Politics and Society 52 (2): 51–71.

13.

Garcé

Adolfo

Yaffé

Jaime

2014 La era progresista, hacia un nuevo modelo de desarrollo: Tercer acto. Montevideo: Editorial Fin de Siglo.

14.

Harvey

David

2007 A Brief History of Neoliberalism. Oxford: Oxford University Press.

15.

IDEA Internacional 2021

“El estado de la democracia en las Américas 2021: democracia en tiempos de crisis.”

https://www.idea.int/es/publications/catalogue/state-democracy-americas-2021?lang-es.

16.

IMPO (Dirección Nacional de Impresiones y Publicaciones Oficiales) 2020 Decreto N° 93/020: Declaración de Estado de Emergencia Nacional Sanitaria como consecuencia de la pandemia originada por el virus COVID-19 (Coronavirus). Montevideo. IMPO.

17.

INE (Instituto Nacional de Estadística) 2021 Encuesta continua de hogares. Montevideo: INE.

18.

Lindblom

Charles

1977 Politics and Markets: The World’s Political-Economic Systems. New York: Basic Books.

19.

Andrés

Marinakis

(ed.) 2020 Uruguay: Impacto de la COVID-19 sobre el mercado de trabajo y la generación de ingresos. Santiago: International Labor Organization.

20.

Miliband

Ralph

1969 The State and Capitalist Society. New York: Basic Books.

21.

Mills

C. Wright

1956 The Power Elite. New York: Oxford University Press.

22.

Olson

Mancur

1985 “La lógica de la acción colectiva,” pp. 32–55 in Auge y decadencia de las naciones. Barcelona: Ariel.

23.

Porrini

Rodolfo

2008

“Síntesis histórica del PIT-CNT.”

https://www.pitcnt.uy/el-pit-cnt/histori/item/6-breve-historia-del-pit-cnt (accessed April 2022).

24.

Poulantzas

Nicos

1973 Political Power and Social Classes. London: NLB.

25.

Rossel

Cecilia

Monestier

Felipe

2021

“Uruguay 2020: el despliegue de la agenda de centro derecha en contexto de pandemia.”

Revista de Ciencia Política 41: 401–424.

26.

UCU (Universidad Católica del Uruguay) 2021

“Observatorio económico 2021.”

https://www.ucu.edu.uy/.

27.

UCU (Universidad Católica del Uruguay) 2022 “Indicadores de coyuntura.” Observatorio de la Coyuntura Económica. February. https://www.ucu.edu.uy/.

28.

UNDP (United Nations Development Program) 2021 Documento del programa para Uruguay (2021–2025). New York: UNDP.

29.

Uruguay XXI 2017 “Oportunidades de inversión: turismo, Uruguay.” https://www.investinuruguay.uy/uploads/documento/921df05c99e07425c64da231bdc67b136f633ad4.pdf.

30.

UNWTO (World Tourism Organization) 2020 “World tourism barometer.” Vol. 18, Issue 1. https://www.unwto.org/world-tourism-barometer-n18-january-2020.

31.

World Bank 2022 “Open data.” https://datos.bancomundial.org/pais/uruguay (accessed April 2022).

32.

WTTC (World Travel and Tourism Council) 2020

“Travel & tourism: global economic impact & trends 2020.”

https://wttc.org/Portals/0/Documents/Reports/2020/Global%20Economic%20Impact%20Trends%202020.pdf?ver=2021-02-25-183118-360.