WHEN President Julio Mar'ia Sanguinetti of Uruguay and President Reagan toast each other at the White House tonight, the words will be positive and warm but will leave a lot of issues unsettled. Uruguay's citizens can be proud of their 15-month-old return to democracy and the cultured civility of their President. The United States has acted as a friend in its relations with Uruguay during this period, but there are harsh realities that will test the stability of Uruguay's democracy and the depth of US willingness to aid a good Latin ally. The 11-year dictatorship Uruguay's 3 million inhabitants endured from 1973 to 1984 put an end to that nation's richly deserved reputation as the ``Switzerland of Latin America.'' The legacy of that dictatorship, apart from the torture, the murders, and the emigration of 300,000 people, includes the near-destruction of the higher-education and health-care systems, an economy that contracted 16 percent from 1981 to 1984, and a $5 billion foreign debt. The country was left broken and bankrupt by the military.
The constitutional government has acted with moderation and skill in the face of this legacy. At home it released the remaining political prisoners, reinstated thousands of individuals fired for political reasons, improved the depressed wages of workers, and restored all political and civil liberties. Abroad, the government reinserted itself in the dialogues of international trade and diplomacy, benefiting greatly from the skills and energy of Foreign Minister Enrique Iglesias. Playing strictly by the rules, Uruguay imposed an economic adjustment package at home and renegotiated its debt with the international banking community. Clearly this policy has bought time, but the problems the government inherited are not going away. Real growth remains minuscule, unemployment is high, and new investment is at a trickle. Interest expense on the debt will require $450 million during 1986, representing some 50 percent of Uruguay's exports. Although fresh funds will cover part of this sum, the drain on resources is staggering.
Civil-military relations are another nettlesome area. Unlike their counterparts in Argentina, Uruguay's armed forces did not lose a war. They negotiated their exit from power and remain intact, unrepentant, and unpunished. Several major human rights cases, however, most especially the 1976 kidnapping and murder of two exiled Uruguayan legislators, Zelmar Michelini and Hector Guti'errez Ruiz, in Buenos Aires are increasingly capturing the imagination of the public. President Sanguinetti cannot just wish the cases away, but the generals and colonels have indicated that they themselves will not be judged. The civilian government's survival could hang in the balance. Let's be clear: At present the military does not want to take power. Yet it may be willing to see a civilian government fall, rather than accept a trial of their brothers for human rights abuses. The culture of fear the dictatorship produced during its reign has not been lost on politicians or workers, but President Sanguinetti must try to convince the military that their institutional integrity will not be destroyed by the resolution of human rights violations.
Uruguay's government has tackled more vigorously the question of economic development. There has been a concerted drive to find new markets for the country's textile, leather, and agricultural exports, as well as to attract foreign investment. It is here that US policy is crucial and presents a mixed record. Textile quotas are nothing new in the US, and Uruguay frequently gets caught by the moves taken against such major exporters as South Korea and Taiwan. Recent legislation for rice subsidies can hurt a successful effort by Uruguay to expand its commercial possibilities for this crop. The inclusion of Uruguay in Treasury Secretary James Baker's debt plan is a modest step in the right direction, but the US must play a more equitable game as it asks other nations to open their markets more widely to American products and corporations. Shortsighted protectionism should not be allowed to strangle fledgling democracies.
Uruguay and the US are, indeed, friends. They are extraordinarily unequal in power and resources, but they are equal in the quest for democracy and stability based on the fundamental belief in individual human dignity. Surely the US wants to strengthen such societies in Latin America. If it permits Uruguay to sell it more of Uruguay's competitive products and acts to reassure its contacts in the Uruguayan military that justice does not mean annihilation, then the friendship can produce healthier friends.
Martin Weinstein is professor of political science at the William Paterson College of New Jersey and author of a new book on Uruguay.